E431M LOSS: ECSPONENT INVESTORS WANT GOVT COMPENSATION

MBABANE – Investors in the E431 million Ecsponent scandal want government to establish a fund to compensate them for the losses, in a similar manner with the Reconstruction Fund.

The over 1 138 investors include pensioners, non-governmental organisations, retired police officers, churches and others who had invested varying amounts to Ecsponent since 2014.  The money had accumulated to E431 million when it was discovered missing. However, the sum was later reduced to E406 million after the company that took over, ESW Investment Group (ESWIG) had paid other investors.

Investors called a press conference yesterday, where they disclosed unhappiness with the laxity at which government was responding to their calls for a forensic investigation. They suggested that the State should put them in the same category with businesspeople who lost their businesses as a result of the political unrest.

Surprising

Chairman of the Investor Relations Committee Billie Dlamini said it was surprising that some of the people who lost their businesses last year were not even emaSwati, but government jumped to their rescue, while emaSwati who lost their monies to the Ecsponent scandal had not been compensated. “We did not invest in a fly-by night or fictitious company, but one that had been authorised by the Financial Services Regulatory Authority (FSRA),” he said. He said it was the responsibility of the FSRA to conduct a due diligence on the company before issuing it with operating permits.

Destroyed

“When properties were destroyed last year, government came to the rescue of the people. Why can’t it do the same with us,” he said. Also thinking along the same lines was investor Yolanda Oswin, who said investors were currently sitting in a place of hopelessness, while the State, which had all the means to save them, was keeping a low profile.
“E431 million is a lot of money, yet no one is willing to help us, yet the money was invested,” she said.

Mlimi Mamba, a retired education administrator, said he also deduced a lot of similarities between June 29 and the Ecsponent scandal. “The investors were ordinary emaSwati who were trying to earn a living. They also deserve to be bailed out like the businesspeople who suffered losses on June 29,” he said.

Another investor, Dr Njabu Dlamini, who is now a member of the Border Restoration Committee, said there were other examples to be cited, where the government intervened to assist people who had lost everything as a result of fraudulent schemes. “In the issue of the BCCI, the government intervened and assisted people. The same can be done for us,” she said. Dr Njabu said some of the people who lost their investments at Ecsponent were primary school teachers, while others were now unemployed.

Vulnerable

Pastor Sydney Kunene, who is representing churches among the investors committee, said the money that was lost belonged to vulnerable societies who urgently wanted to use it to sustain themselves. “Some churches can no-longer afford basic needs such as taking care of their workers and the clergy. I also support the notion that government should do something to compensate the investors,” he said.

On another note, the investors said they understood that the new company that took over Ecsponent could not pay dividends in December as had been promised in a meeting of investors in June this year. Chairman of investors Billie said the promise was made based on assumption that ESWIG would be able to sell its shares at GetBucks.
“It turned out that taking such a decision would be tantamount to selling the whole dairy cow,” he said. Finance Minister Neal Rijkenberg said the FSRA had done a study on where the funds went to, which, then revealed the problems that were now dealing with.

Involved

“Parliament then called for a forensic audit, but that it should not be done by FSRA. That makes it difficult to fund it as the responsible regulator is not allowed to be involved. We have been working on the matter and the central bank has now agreed to fund it. The terms of reference have been drawn up and the tender process is beginning,” he said.  The minister said the FSRA was there for oversight, but could not ensure that investors do not lose money.  “Investors need to be vigilant, especially when being offered ‘too good to be true’ deals. The forensic audit will also reveal how we could have handled the matter better,” he said.

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