E340M ECSPONENT FORENSIC FINDINGS SOON-CBE

MBABANE - If an assurance by the Central Bank of Eswatini (CBE) is anything to go by, the many emaSwati who lost E340 million after investing in Ecsponent Eswatini will get to know what happened to their monies in the next coming weeks.

Over 1 138 investors who include pensioners, non-governmental organisations, retired police officers, churches and others lost millions of Emalangeni which they invested in Ecsponent since 2014.  The money had accumulated to E431 million when it was discovered missing.

Meeting

During a special meeting held at the Mfanyana Hall in Manzini at the beginning of this month, the investors took a resolution to seek audience with His Majesty King Mswati III on the issue. They also took a resolution to approach Parliament. While they reached the resolutions, the investors also demanded answers on what had happened to the forensic audit that was meant to investigate what really happened to their monies. A response was provided by the management of Eswatini Investment Group (ESWIG), the company which took over after the loss of the millions and has been trying to assist the investors.

ESWIG Chairman Ndumiso Mamba said they were still expecting the release of a forensic report after the investigation conducted by the Central Bank of Eswatini (CBE). He mentioned that the ESWIG board conducted its own forensic investigation to establish what transpired and it had initiated its legal claim against certain parties, on the basis of its own forensic investigation. Regarding paying Parliament a visit, this publication can reveal that answers will be sought from Minister of Finance Neal Rijkenberg at the House of Assembly.
A notice paper issued by the Office of the Speaker of the House of Assembly, which contains notices handed in up to May 8, 2024 reflects that Lamgabhi Member of Parliament will seek answers from the minister on the issue.

Specifically, Jele will ask the minister to shed some light to the House with regards to a resolution that was taken by the 11th Parliament regarding the lost millions. The 11th Parliament resolved that the ministry should institute a forensic audit into the loss of the money which was invested by emaSwati. It should be noted that last year, the Central Bank of Eswatini announced that South Africa’s Cliff Dekker Hofmeyer (CDH) had been appointed to conduct a forensic investigation into what led to the mismanagement of the E340 million. Based on the submissions made and questions posed during the investors’ special meeting, it appears they are worried that the forensic audit might not see the light of day.

Investigation

In particular, some voiced that due to the fact that ESWIG is currently at loggerheads with the Financial Services Regulatory Authority, a parastatal under the Ministry of Finance and works closely with the CBE, this might impact negatively on the investigation. Following the concerns by the investors, this publication engaged the CBE and the first question posed was on whether any significant progress had been made in as far as the forensic was concerned. In response, CBE’s Head Strategy and Communications Mandla Luphondvo said, “Significant progress has been made in the probe into the affairs and operations of Ecsponent (Swaziland) Limited.

The probe has been undertaken in a transparent and professional manner, in the backdrop of the importance and sensitivities attaching to this matter. The exercise is expected to be completed within the next few weeks”. According to Luphondvo, a comprehensive report, with detailed findings and recommendations was expected to be presented by the firm and the report will subsequently be shared with the minister of Finance. The second question position was on whether the ongoing court battle between ESWIG and FSRA will not have a negative impact on the forensic especially since the latter worked closely with the CBE, the initiator of the forensic.

Luphondvo mentioned that the terms of reference of the probe were specific and that the CBE did not anticipate that the recent litigation between ESWIG and FSRA will have any negative impact on the probe. Also, a response was sought from the CBE on when exactly the report containing the findings would be completed and made public. He said, “while the terms of reference had specific timelines, there have been some preliminary findings that have warranted a re-examination or further investigation on certain issues. However, and without giving a specific date at this point, the probe is expected to be completed in the next few weeks”. Meanwhile, other casualties in the E340 million loss include Likhwane Beneficiary Services (LBS) which invested around E60 million.

Investments

The fund, which has over 500 beneficiaries who include orphans some of who are enrolled in tertiary institutions, is facing a cashflow challenge following the loss of investments.
Likhwane opened a court case against entities and individuals it believes were responsible for the loss of the funds. ESWIG came into being in March 2020 with the sole mandate of recovering the E340 million and has been hard at work trying to identify potential investments to be tapped into and to further ensure that the embezzled investments were repaid.
In 2022, an 11-member committee to represent the 1 000 emaSwati who lost their money was elected. Known as the Investor Relations Committee (IRC), the team was elected from 21 members, who were nominated during the investors’ first-ever AGM held at Esibayeni Lodge in Matsapha mid-June 2022.  The 21-member group then converged at the ESW Investment Group (ESWIG) offices in Mbabane to elect among themselves the IRC, whose main task was to work hand in hand with ESWIG’s newly-appointed management in raising funds to repay the distressed investors.

Process

The election process ensured that all the country’s four regions were represented to make communication easy and effective. ESWIG gave assurance that the investors will get to know report findings of the forensic investigation into their monies prepared for the investors where it informed them that the long-anticipated forensic investigation into what led to the mismanagement and theft of their investments had finally been instituted. The report mentioned that the CBE had announced the appointment of CDH.

“The investigators have reportedly conducted interviews with the relevant stakeholders and are due to present their preliminary report to the Central Bank of Eswatini before the end of the year,” read part of the report. It was mentioned that the Investor Relations Committee (IRC) was engaged on Friday, November 17, 2023, to provide information for the audit. It was reported that information on all the investors including date of investment, dividends paid (if any), value of investments to date, contract documents and other required pieces of information were obtained from the ESWIG Office.

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