Reinstilling Public Confidence in Lesotho’s Companies Act After the Enrich Stores Scandal
Lesotho’s investment environment has gone through a difficult period. The collapse of Enrich Stores shook public confidence and left many investors questioning whether it was safe to buy shares in local businesses. Yet what happened with Enrich Stores was not a failure of the Companies Act itself. It was a failure of compliance, transparency, and oversight. The law remains a sound and legitimate way for businesses to raise capital when it is used properly and responsibly.
The confusion that followed Enrich Stores created the impression that raising funds through the Companies Act is unsafe. In truth, the law provides a clear and lawful process for businesses to bring in investors. It gives local entrepreneurs a pathway to expand without the heavy costs or technical requirements of listing on the Maseru Securities Market. The Companies Act is designed to encourage business growth while keeping regulation close to home. The mistake was not in the system, but in how some individuals chose to use it without maintaining the level of honesty and transparency that investors deserve.
The Registrar of Companies authorized Enrich Stores to raise funds under the law, but the company failed to live up to its obligations. That misuse of a legal framework caused damage to public confidence. However, it also highlighted what needs to change. The law itself does not need to be discarded. It needs to be enforced with stronger oversight and higher standards.
Companies that choose to raise money under the Companies Act must now lead by example. They must show that they can operate openly, provide accurate financial information, and maintain full accountability to their shareholders. The best way to rebuild trust is through clear communication, regular reporting, and independent audits. Investors want to see numbers, not promises. They want to know that the companies they support are serious about governance.
The Registrar of Companies has taken important lessons from what happened. There is a stronger understanding that approval alone is not enough. Monitoring and follow up are essential. New guidelines and checks are being introduced to ensure that companies seeking to issue shares meet higher disclosure standards and act in good faith. These changes will protect investors and restore confidence in the system.
The Companies Act is not the problem. In fact, it is one of Lesotho’s most useful tools for developing local enterprise. It gives small and medium businesses access to growth capital and allows investors to take part in the success of local ventures. It keeps investment activity within the country, supporting domestic growth and reducing dependence on foreign markets. When used properly, the Act helps create jobs, expand industries, and promote shared prosperity.
For businesses, the Companies Act route is an affordable and flexible way to raise funds. It allows them to remain locally regulated while proving that they can operate transparently. It can also serve as preparation for eventual listing on a public market once the company matures. For investors, it offers a chance to be part of Lesotho’s growth story, provided they choose companies that respect the principles of openness and good governance.
Restoring faith in the system requires cooperation among all stakeholders. The government, the Registrar of Companies, and the private sector must work together to ensure that the Companies Act is applied consistently and fairly. Investors should also be educated about their rights and how to verify that a company is compliant before they invest. Public understanding is as important as regulation in building a culture of trust.
The media and business community can help by highlighting success stories. Companies that use the Act correctly and deliver real value to their investors should be celebrated. Their examples will show that Lesotho can learn from past mistakes and move forward with greater integrity.
The story of Enrich Stores was a setback, but it should not define the Companies Act. The law itself remains a strong foundation for business growth. What matters now is how it is applied. When transparency, honesty, and accountability guide its use, it can once again become a source of national confidence.
Lesotho does not need to abandon its laws. It needs to uphold them with care and discipline. If that happens, both investors and entrepreneurs will find renewed trust in the Companies Act and in the idea that local investment can build a stronger economy for everyone.
Trust, when earned and protected, will become Lesotho’s greatest source of growth.
