MANZINI – Eswatini Development Finance Corporation (FINCORP) has uncovered a sophisticated loan fraud scheme involving businesspeople.
The implicated businesspeople allegedly take out substantial loans to purchase trucks, only to secretly contract them to companies in South Africa (SA), rather than operate them locally.
This revelation comes at a time when the financial institution confirms that it has opened four cases of fraud with the police, with investigations ongoing. This publication’s investigations uncovered that the individuals involved would secure loans from FINCORP under the pretence of establishing trucking businesses within Eswatini.
However, their true intention, it has emerged, was to lease these assets outside the country, thereby defrauding the financial institution.
Dumisani Msibi, Managing Director (MD) of Eswatini Development Finance Corporation (FINCORP), confirmed to the Times of Eswatini that while most of the trucks recovered from South Africa were ‘secretly’ contracted to various companies over there, only one was found to have been sold outright. “FINCORP provides loans to SMEs which are mostly not prominent citizens, but small business operators,” Msibi clarified, addressing the profile of the implicated individuals.
He reiterated: “So far, most of the trucks we have recovered from SA were not necessarily sold, but were secretly contracted to various companies over there, except one.”
Msibi also confirmed that FINCORP has indeed opened four fraud cases. He commended the police for their invaluable assistance in the investigations. “The police have been of great assistance on the identified cases and we are most grateful to the commissioner of police and his troops, together with Interpol,” Msibi stated. He further highlighted the legal ramifications of such actions, emphasising that any asset leased from FINCORP remains its property until fully repaid. “It must be understood by all and sundry that if you lease an asset or a truck with a financial institution, it remains the property of FINCORP until it’s fully repaid, so hiding it away from us is a fraudulent act and therefore, the law shall always take its course,” he warned.
While declining to provide specific details about the implicated individuals due to customer confidentiality, Msibi assured that FINCORP has instituted rigorous measures to prevent the recurrence of these fraudulent acts. “Unfortunately, we cannot provide much details as we would then grossly compromise these efforts,” he said. FINCORP’s internal investigations are also well underway, with Msibi revealing: “We have commissioned our Business Development Unit to conduct a thorough investigation and also come up with preventative measures ‘over and above what we have now deployed’. Regarding the financial exposure, Msibi indicated that the risk is limited to the four cases they have identified. He expressed optimism that the measures already in place will prevent similar fraudulent activities in the future.
The Times of Eswatini understands that among those reportedly implicated are a prominent Manzini businessman and a businesswoman from Siteki.
FINCORP could not confirm the identity of these individuals due to confidentiality issues.
Full details in today’s paper.
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