ACC: HOW ‘CHIEF’ GRANTED LICENCE AFTER VISIT TO ECSPONENT SA

MBABANE – Former FSRA CEO Sandile ‘Chief’ Dlamini allegedly visited Ecsponent South Africa and on his return, he purportedly granted Ecsponent Eswatini a licence.

The charge sheet states that Escalator and/or Ecsponent, allegedly made a payment of E117 000 into Dlamini’s bank account. Sandile, who was arrested by the Anti-Corruption Commission (ACC) on Wednesday morning, was granted bail of E50 000 by Judge Nkosinathi Maseko yesterday. He was ordered to pay a cash amount of E7 500 and provide surety for the balance of E42 500. The accused was represented by Mxolisi Dlamini of Dynasty Inc Attorneys.

Served

Sandile, apart from being the Chief Executive Officer of the Financial Services Regulatory Authority (FSRA), he served as the Registrar of Insurance and Retrenchment Funds at FSRA. It was the registrar of Capital Markets who was responsible for licensing investment advisors. According to the charge sheet, any company requiring registration as an investment advisor was obliged to submit a formal application to FSRA for approval, pursuant to having been registered as a company with the registrar of companies.

In November 2013, according to the summary of evidence, Escalator submitted an application for such registration as an investment advisor. The court was informed that an application by Escalator was declined after consultation, allegedly with Sandile, as it did not satisfy the requirements for licensing. Escalator is alleged to have changed its name to Ecsponent and resubmitted the application for licensing, after having registered as a company. However, the licensing application was refused.

In the event a licence application is refused, there are prescribed appeal procedures laid down by the FSRA Appeals Tribunal. Pursuant to the refusal to grant the licence to Ecsponent, it did not pursue the appeal, the court was told.
 “The accused (Sandile), thereafter, was invited to visit the head office of Ecsponent in Pretoria, South Africa, and did so visit the said premises.

“On his return, the licence was granted by the accused, in contravention of the prescribed procedures and notwithstanding the fact that he did not occupy the position of registrar of Capital Markets,” reads part of the charge sheet. Sandile is alleged to have received a payment of E117 000 from Escalator and/or Ecsponent on December 22, 2014, which was paid into his personal bank account.

Status Capital Building Society then sought registration and licensing from FSRA as a building society, in terms of the Building Societies Act, 1962. FSRA allegedly attended to both registration and licensing in building society applications. As a result of queries raised by the minister of Finance, such registration was not approved.

“The accused ignored the aforementioned enquiries and issued the licence in contravention of the prescribed and applicable procedures. Thus in fact Status Capital was licensed by the accused even before it was registered.
“The accused, therefore, licensed Status Capital, being a non-registered company,” further reads the charge sheet.
Sandile’s contract with FSRA expired on November 30, 2019 and, according to the charge sheet, he was appointed as a Director of Status Capital.

During his arrest on Wednesday, ACC officers seized his laptop, an iPad and seven USB devices. Likhwane Beneficiary Services (Pty) Limited made allegations in its matter against FRSA that the ACC had discovered funds in the former FSRA CEO’s bank account. The money, according to Likhwane, had purportedly been transferred from Ecsponent Eswatini.

According to Likhwane, there was allegedly strong circumstantial and direct evidence that Sandile, together with directors and officers of Ecsponent, now known as ESW Investment Group Limited, purportedly conspired to use the latter as a vehicle to use investors’ funds for their personal gain. This is contained in combined summons filed by Likhwane at the High Court. Likhwane in this matter is demanding E63 023 000 from FSRA and ESW Investment Group Limited.

This money, according to Likhwane, was invested in ESW Investment Group, after the FSRA had granted the former an investment advisor licence. At the High Court, there is a pending case where ESW Investment Group (Pty) Ltd accused Sandile of having allegedly received unlawful payments in his personal account. In its court papers, ESW informed the court that the alleged unlawful payments were made in the account of the former CEO through Escalator Africa (Pty) Ltd.

This, according to ESW, was done as part of the alleged relationship Sandile had with Ecsponent South Africa (SA).
ESW also informed the court that Sandile’s former wife was in 2014 employed by Ecsponent SA. According to ESW, as CEO of FSRA, Sandile allegedly unlawfully sanctioned a financial services licence for Status Building Society. The FSRA, according to ESW and Ligagu Investments (Pty) Ltd, are vicariously liable for acts and/or omissions caused by the alleged bad faith of Sandile and the officials of FSRA, cooperating with him, causing a loss of E335 240 000. Despite lawful demand, the defendants, according to ESW, allegedly failed and/or refused to make payment to it in the sum of E335 240 000 or any part of it.

Recovered

ESW told the court that all amounts recovered from the defendants would be distributed with the consent of Ligagu Investments to compensate the investors for proven investment losses suffered in terms of a process to distribute available funds in relation to their claims. The process, submitted ESW, must be agreed upon and sanctioned by the court to facilitate claims and payments in terms of the proven claims. The veracity of these allegations is still to be tested in court.  

In the combined summons that were issued by ESW lawyer in January 2024, the  investment company further  accused Sandile of being involved in a purported fraudulent scheme that resulted in the transfer of over E335 million outside Eswatini. ESW Investment Group made these allegations in the matter in which it is demanding a sum of E335 240 000 from FSRA, Ecsponent Limited South Africa and GetBucks (Pty) Limited South Africa.

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