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Morosi Zian
Former minister Keketso Sello and his brother Katiso Sello are locked in a dispute over the family’s multi-million dollar business, Lesotho Funeral Services (LFS).
Katiso, who owns 67 per cent, has filed a petition in the commercial division of the High Court seeking to compel Keketso to sell his 33 per cent stake to him.
LFS was founded by his late father, Louis Joas Sello.
Katiso accused Kekso of sabotaging the company by refusing to approve business deals until his personal debts were paid.AlAfter the equity transfer negotiations broke down, the dispute escalated to the court.
Keketso demanded control of the company’s northern region assets in exchange for his shares, but Katiso refused.
Katiso, who initially held a 34% stake and later acquired the other 33% from his brother Kutloano, claims LFS operates across three regions: north, centre and south. Kutloano manages the southern region in Maseru, Kekso the northern region and Katiso the central region.
Katiso claimed that after acquiring Kutloano’s shares, Keketso began disrupting LFS’ operations.
“After I acquired Kutloano’s shares, Keketso began to exhibit behavior that one could reasonably interpret as hindering the day-to-day operations of LFS, thereby negatively impacting its operations. For example, he would demand that LFS pay off his personal debts before he would approve a business transaction that required him to serve as a director,” Katiso said in court documents.
He recalled a meeting in January where Keketso expressed his desire to exit the business and proposed exchanging his 33% stake for LFS’ northern assets, a move Katiso said violatedIRSshareholderAagree.
“In a meeting between myself and my legal adviser, Attorney Tlhoeli, and Keketso and his legal adviser, Adv Sepiriti, on January 10, 2024, Keketso indicated that he was no longer interested in being part of LFS as it currently is. In light of the above, Keketso proposed to sell his 33% stake to LFS but not for cash. He proposed that since he had been managing the northern operations, his shares should be northern assets.
“He subsequently wrote a letter indicating his intention to divest his shares in LFS. He went on to state in the letter that he did not require cash in exchange for his shares and instead requested that all business assets of LFS Northern Region be assigned to him. The disposal of the shares was subject to, among other things, the Shareholders’ Agreement, which Keketso signed and was aware of. Despite my letter requesting him to comply, he failed to comply and/or neglected to comply with the Shareholders’ Agreement.
“It is important to note that under the Shareholders’ Agreement, shareholders who wish to sell their shares in LFS are obliged to sell their shares to existing shareholders and such sale should be accompanied by a monetary value. Therefore, the defendant’s sale was not in compliance with the provisions of the Shareholders’ Agreement.
“His proposal for LFS to distribute to him assets currently belonging to its Northern Region is flawed and undermines the shareholders’ agreement. The assets he wishes to receive in exchange for his shares cannot be equivalent to the value of his shares in the company,” said Cartiso.
Katiso also claimed that Keketso’s actions were detrimental to the company, including meetings with business partners and LFS suppliers that resulted in negative feedback.
In his statement of defence, Keketso refuted the characterisation of himself as a shareholder of LFS, claiming that they were merely managers of the Sello Trust managed by his late parents under their wills. He argued that the shares belonged to the Sello Trust or the estate and any restructuring of the shares would be illegal under the Companies Act 2011.
“I sincerely declare that LFS and its shares belong to the Sello Trust or estate and we are its administrators and executors. My brother Kutloano cannot sell the property of the trust or estate as if he were its owner. Under the will, all descendants of my parents are entitled to periodic payments of various expenditures stipulated therein, including a lifelong pardon. But I did not insist on signing any document before I could get the payment, although I could,” Keketso claimed.
Keketso also denied claims that he refused to approve payments from customers and said his actions were aimed at holding the LFS management entity accountable for mismanagement. He insisted that his refusal to sign bank documents was because no meeting had been held to resolve management issues.
“The fact is that the entity we hired to manage LFS favoured the witness (Katiso). They refused to hold a meeting and I tried to ask them to explain their mismanagement. As the administrator, I have the power to do so under the will. I refused to sign the bank documents authorising the payment to the designated manager because I asked not to do so before the meeting where they were to explain the reasons.”
The case was first brought to the Commercial Court in April and has been brought back and forth between the parties several times, with the last appearance being on June 17, 2024.. AhearingDate not yet determinedReserve.
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