Times Of Swaziland: MORE REVEALED IN FANOURAKIS’S COMPANY TAX EVASION PROBE

MORE REVEALED IN FANOURAKIS’S COMPANY TAX EVASION PROBE
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Mbongiseni Ndzimandze on 23/12/2022 08:43:00


MBABANE –   Financial investigators reportedly found that the address where
Unionlet (Proprietary) Limited was registered to be operating  from was in fact
a site for a well-known poultry business owned by MP Royal Fanaourakis.
The company is suspected of tax evasion and money laundering as monies from
outside the country would be allegedly deposited into its bank accounts and
transferred to various individuals in different parts of the world. A large
amount of money was allegedly paid to well-known arms manufactures and this
raised concerns.
The Mtfongwaneni Member of Parliament (MP) is a Director of Unionlet
(Proprietary) Limited, together with Mark Ranger, who is a British national. The
information about the company is contained in the application filed by the
director of public prosecutions DPP to restrain an amount of E6.2 million
belonging to the company.
Accounts
Head of the Asset Forfeiture Unit in the office of the DPP, Elsie Matsebula,
told the court  that the circumstances were not clear whether Unionlet was
trading or not.  She said it was the active bank accounts with a turnover
amounting to millions that signalled that the company was trading but that was
not supported by what was happening on the ground.
Matsebula told the court that a lease was obtained, which confirmed the
registered office of Unionlet as Portion 12 Farm 281, known as Lozindaba
Shopping Complex in Manzini. “The financial investigators visited the said
address and found that this was a site of a well-known poultry business that
Fanourakis runs named Ngwane Poultry. It is the poultry business operating at
this address,” submitted the head of Asset Forfeiture Unit.
Employee
She said enquiries were made at Ngwane Poultry about the location of Unionlet
company offices and one male employee working at the poultry by the name of
Nkosikhona Nxumalo, indicated that he did not know, but it was Fanourakis who
could assist with the issue.  The investigator, according to Matsebula,
instructed Nxumalo to call Fanourakis.
“When Fanourakis was called, he instructed Nxumalo to show the investigator
his office which was situated at the back of the shop. Fanourakis gave
information that the files of Unionlet are not in the said office, but he
removed them to his home,” narrated Matsebula. The investigator was then
reportedly led to the office, which was small with a desk and some empty
cabinets. The court was told that, according to the investigators, there were no
signs whatsoever, indicating that these were offices of Unionlet.
The head of the Asset Forfeiture Unit further brought it to the attention of the
court that Unionlet, in the first six years filed returns reflecting that it was
not trading. “However, during the said tax years, the company ran bank
accounts that were receiving monies on behalf of the company. In the last two
tax years being 2020 and 2021, the company filed returns that reflected it was
trading. However, a  huge discrepancy exists between the cash flow reflected in
the bank accounts when compared to that declared by the company to the tax
authority,” Matsebula argued.
The returns filed for the tax year 2020, as per Matsebula, reflected that the
company had non-current assets in the form of property, plant and equipment to
the value of E11 432  and current assets totalling E5 998 731 in the form of
cash and equivalents.
Assets
It was further highlighted to the court that the returns filed for the tax year
2021 reflected that the company had non- current assets in the form of property,
plant and equipment to the value of E9 344 and current assets totalling E7 182
633 in the form of cash and equivalents. “Both filed returns failed to reflect
common business expenses like payment of salaries, electricity, lease payments
and travel costs to mention few.
The returns boasted of huge long-term loans termed director loans and associated
company loans,” said Matsebula.
The court was told that it was difficult to foresee how a business would earn
income without incurring costs. “The anomalies led to the inference that there
was a lot of malice when the returns were completed. Such returns are usually
filed by individuals who file for the sake of receiving status of having
complied with taxation laws, when they have in fact not complied, as opposed to
honest declaration in compliance with the duty to pay tax,” averred Matsebula.
Funds
She said the circumstances revealed that Unionlet was a shell company that was
registered so that it could open accounts in the Kingdom of Eswatini that were
utilised to receive huge funds, which were mostly transferred offshore for the
utilisation of Ranger and his relatives. It was further her submission that the
total benefit from the alleged criminal activity amounted to E62 816 909.47,
which was calculated as 27.5 per cent gross income.