VZCZCXRO0796
RR RUEHBZ RUEHDU RUEHJO RUEHRN
DE RUEHMR #0496 2781245
ZNR UUUUU ZZH
R 051245Z OCT 06
FM AMEMBASSY MASERU
TO RUEHC/SECSTATE WASHDC 2329
INFO RUCNSAD/SADC COLLECTIVE
RUEHLMC/MILLENNIUM CHALLENGE CORP
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHMR/AMEMBASSY MASERU 2653

UNCLAS MASERU 000496 
 
SIPDIS 
 
SIPDIS 
 
DEPT PASS USTR 
 
E.O. 12958: N/A 
TAGS: ECON EAID ETRD PGOV LT
SUBJECT: LESOTHO OCTOBER ECONOMIC REPORT:  BRIBERY AND RICHES IN THE 
SNOWY MOUNTAINS 
 
REF: MASERU 335 
 
¶1.  SUMMARY: 
 
--  Italian firm fined in bribery case; 
--  Ombudsman Raps Finance Secretary; 
--  Ski Resort Opened in Lesotho Mountains; 
--  640 Carat Find at Letseng Diamond Mine. 
 
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ITALIAN FIRM FINED IN BRIBERY CASE 
---------------------------------- 
 
¶1.  The High Court of Lesotho fined Italian company Impregilo 15 
million Maloti (1.9 million USD) for attempting to circumvent 
justice in a bribery case involving the former Chief Executive 
of the Lesotho Highlands Development Authority (LHDA). 
Impregilo's Counsel, Attorney Danie Dorfliny, plead guilty to 
the charge on September 4, admitting that the company had failed 
to disclose the full facts of Impregilo's activities to 
Lesotho's prosecuting authorities. 
 
¶2.  Impregilo is one of eight foreign construction companies 
(including British, Canadian and South African firms) accused of 
bribing the former Chief Executive Officer of the LHDA, Masupha 
Sole, to influence the award of construction contracts for a dam 
at Ha Katse, the first of several dams that comprise Lesotho's 
massive highlands project to export water to South Africa. 
According to a South African intermediary who is now a state 
witness, Impregilo instructed him to pay a total of 2 million 
Maloti (252,000 USD) to Sole between October 1991 and September 
¶1992.  Sole, who is currently serving a fifteen year jail 
sentence, subsequently supplied an Impregilo official with 
copies of competing tender documents. 
 
-------------------------------- 
OMBUDSMAN RAPS FINANCE SECRETARY 
-------------------------------- 
 
¶3.  Lesotho's Ombudsman, Attorney Sekara Mafisa, has chastised 
the Principal Secretary for Finance, Dr. Moeketsi Majoro, for 
allowing the Ministry's tender board to illegally award a 
600,000 Maloti (75,000 USD) contract to South African firm 
Victory Computer Services (VCS) for the provision of internet 
services.  Three Lesotho-based internet companies complained to 
the Ombudsman in June that that VCS, which is not registered in 
Lesotho, was not qualified to compete for government contracts 
in Lesotho.  The Ombudsman issued an order halting the tender 
process pending an investigation.  Dr. Majoro ignored the order 
and awarded the contract to VCS. 
 
¶4.  Soon after winning the bid in May, the company was allowed 
to start the work.  The GOL paid upfront the full contract 
value, despite the fact that work will not be completed until 
April 2007.  Stating that the Principal Secretary might have 
been misled by his staff, the Ombudsman recommended the transfer 
of the Tender Board Secretary to another ministry and ordered 
that the tender process be restarted to allow fair competition 
from local internet providers. 
 
-------------------------------------- 
SKI RESORT OPENED IN LESOTHO MOUNTAINS 
-------------------------------------- 
 
¶5.  During Lesotho's highest annual snowfall in a decade, the 
Minister of Tourism and Environment, Lebohang Ntsinyi, 
inaugurated the country's first ski resort, Afri Ski Leisure 
Kingdom at Mahlasela, on Saturday August 12.  Built at a cost of 
40 million Maloti (over 5 million USD) by South African investor 
Wessel Bosman, the project has taken eight years to complete and 
relies on snow-making machines due to the unreliability of 
snowfall in the area.  This year, however, the resort benefited 
from heavy snowfalls in late July and early August, attracting a 
large number of ski enthusiasts from throughout the region. 
 
-------------------------------------- 
640 CARAT FIND AT LETSENG DIAMOND MINE 
-------------------------------------- 
 
¶6.  Letseng Diamond Mine, situated in the mountain district of 
Mokhotlong, has announced its largest find to date -- a 640 
carat diamond discovered during the week of August 21.  The 
diamond will be auctioned at an international diamond market in 
Antwerp.  Renewed mining at Letseng, which produces infrequent 
but large, high quality stones, restarted in 2004 after its 
closure in 1982.  The mine was recently sold to Gem Diamond 
Mining of Africa by South Africa's Black Empowerment company, 
Matotzi Resources.  The GOL increased its shareholding from 24 
to 30 percent (reftel). 
 
MURPHY