AS ECSPONENT INVESTIGATIONS INTESIFY: ORDER TO PROBE ACCOUNTS OF ‘THE HIGH AND MIGHTY’

MBABANE – There is a new twist in the investigation into the disappearance of the E335 240 000 that was invested by over 1 000 emaSwati and institutions.

The money is part of the E406 million that was invested in Ecsponent Swaziland (Pty) Ltd, now Eswatini Investment Group (ESWIG) (Pty) Ltd. It was previously known as Escalator Capital. In the latest development, the police have obtained an order to investigate over five bank accounts of ‘the high and mighty’.  Among the bank accounts that are now under investigation, are those that belong to a high-ranking politician, prominent businesspeople, lawyers and a money lending organisation.

The names of the individuals and organisation, whose bank accounts are being looked into, cannot be named as the application thereto was made ex parte (without their knowledge) and the investigations are still ongoing. As per the police investigations, it is suspected that the organisation, whose bank account is among the ones under investigation, was purportedly used as a conduit to transfer the monies deposited by the investors to different accounts. Some of the monies that are reflected in the statement of the organisation are large amounts of money ranging from E20 million, being transferred to the accounts of some of the account holders.The account holders include high-ranking officials and businesspeople.

Deposited

The order to investigate the bank accounts, where large amounts of monies were deposited, was granted by Mbabane Magistrate Sifiso Vialakati. Magistrate Vilakati granted the order after investigators from the Commercial Crimes and Fraud Unit applied for an order in terms of Section 49 of the Criminal Procedure and Evidence Act of 1938. Section 49 of the Act provides that, if upon an application to the court by a police officer the court is satisfied that any books of account, document, records or thing which is in the possession of any person, including a company, bank or other financial institution is necessarily required in connection with any criminal investigation by the police, the court shall make an order requiring that person, company, bank or financial institution to produce such book, document, records or thing to the police subject to such conditions as the court may impose. It also stipulates that, any person who without reasonable excuse, proof of which shall be on him, refuses or fails to comply with an order of the court under subsection (1) shall be guilty of an offence and liable on conviction to a fine not exceeding E10 000 or to imprisonment not exceeding five years or to both.

Lured

The investigation of these bank accounts comes after some of the investors recorded statements with the police, narrating how they were lured to deposit their monies, with the promise of better returns. The investigators, according to sources, will also likely use the recent Escponent report that was tabled in Parliament in their investigation. Notably, a number of the investors who invested their hard-earned cash are pensioners.  About 100 of them are reported to have died due to depression and stress-related illnesses, which purportedly beset them after the disappearance of their investments.

The investigation into the activities in the bank accounts in question comes at a time when the investors instituted proceedings at the High Court, to recover the lost investments.
They were recently in court on a verification exercise before Judge Khontaphi Manzini, to prove that they hired the office of S.V. Mdladla and Associates to represent them in the matter, in which they are demanding the amount of E340 million from the Financial Services Regulatory Authority (FSRA).

Licence

FSRA, which granted Ecsponent the licence to operate in the country, had disputed that the investors had engaged the law firm to represent them in the matter. FSRA Chief Executive Officer (CEO) Ncamiso Ntshalintshali alleged that the over E405 million in Ecsponent was allegedly not invested in any legitimate product to earn returns. He alleged that Escponent operated a money laundering pyramid scheme. He told the court that ESWIG or Ecsponent Eswatini (Pty) Ltd, and GetBucks Eswatini (Pty) Ltd, are the culprits in the disappearance of money.

Further, FSRA wants Ndumiso Mamba, Terence Gregory, Mlungisi Lukhele, Dirk van der Merwe and Gregory Manyere, who were allegedly responsible for operations of Ecsponent Eswatini (Pty) Ltd, to be brought to court.According to FSRA, these individuals allegedly benefitted from the deposits made by the investors.The deposits totalled E406 932 005.55.
By way of third-party proceedings, the FSRA wants the individuals to be brought to court through the third-party procedure, which will provide for the determination of any question or issue between the parties and third parties, if the same question will arise or has arisen.

Ntshalintshali informed the court that the directors of ESWIG were paid directors’ fees, emoluments and commissions between 2015 and 2022.Meanwhile ESWIG told the court that an amount of E335 240 000 was transferred to the Republic of South Africa, leaving the local investors high and dry. ESWIG accused former FSRA CEO Sandile Dlamini of being involved in the purportedly fraudulent transfer. ESWIG is currently making efforts to recover the transferred investments. In its combined summons, ESWIG informed the court that FSRA, in conjunction with financial service providers, by law, promotes awareness of the benefits and risks associated with different kinds of investments.“...take measures for the better protection of stakeholders of financial services; make rules and issue guidance notes and codes of conduct governing the conduct of the business of financial service providers; carry out investigations and take measures to suppress illegal, dishonourable and improper practices, market abuse and financial fraud in relation to any activity in the financial service sector,” submitted ESWIG.

Regulate

Others are to regulate, monitor and supervise the conduct of the business activities of financial service providers; exercise and perform other powers, authorities and duties as may be conferred or imposed upon it by or under the FSRA Act or any other Act; perform all such other acts as may by incidental or conducive to the attainment of the objects of the authority or the exercise of its powers under the FSRA Act. ESWIG also told the court that Section 6 of the FSRA Act provides that the FSRA shall have such powers as are necessary to enable it to effectively discharge its functions.

The investment group further told the court that Section 8 of the Act provides for the responsibilities and duties of the CEO, which include that the CEO must devote his professional services to the FSRA.According to Section 8, submitted ESWIG, the CEO may not without written approval of the relevant minister supplement his salary from any service other than the authority. The matter is pending in court.

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