swaziland times

MBABANE – As the nation waits with great anticipation for the forensic report on the accused that was recently tabled in Parliament for debate, sources have revealed that some MPs were being lobbied not to adopt the report.

According to parliamentary procedure, MPs are expected to debate and eventually adopt the report. Some MPs who wish to remain anonymous told the publication that some forces were lobbying them to reject the report in its current form and demand a “real report”. It is understood that those lobbying to reject the report claimed that the report may have been modified and some content had been deleted.

possibility

One MP interviewed by this publication said they believed that, like the Funduzi report on drug shortages, the report submitted to Parliament was more like an executive summary and may have omitted key elements. The Swaziland Forensic Investigation Report was prepared for the Central Bank of Swaziland (CBE) by Cliffe Dekker Hofmeyr (CDH) Inc. The report was tabled in the House of Representatives by Finance Minister Neal Rijkenberg three weeks ago. Interestingly, the parliamentary call for an investigation comes in response to public outcry after more than 1,000 emaSwati lost more than €340 million after investing in Ecsponent Eswatini.

In an interview yesterday, Minister Rickenberg said that while he was not aware of the lobbying, he believed the report presented to Parliament was genuine and contained all the findings. The Minister reiterated his statement in Parliament when the report was presented that when he received the report after the CBE completed it, he was aware of the possible criminal activities revealed in the report. He said the Ministry then approached the Royal Swaziland Police Service (REPS) who indicated that they did not want the document to be made public and thus jeopardize their plans to hunt down criminals.

“So the police spent five weeks investigating the report and tracking the criminal activity. Then the police came back and advised that we can now file the report because we were under pressure from Parliament to do a forensic examination,” he said. The minister further explained that the police advised that since the criminal or criminal activity had been revealed, it was wise to protect the witnesses, which is why their names were exaggerated in the report.

Protect

“Only names were blocked, not even sentences were blocked, that was just for witness protection. Other than that, nothing was changed or deleted. There was no tampering,” he said. He stressed that all the reports he submitted to parliament contained all the findings of the investigators. Furthermore, the Minister said he believed the forensic investigation was being conducted by reliable consultants and the nation should have confidence in that. Meanwhile, efforts to obtain comments from Egypt’s central government were unsuccessful, as the entity did not respond to a questionnaire sent by this publication last Wednesday.

The question posed by the publication is: “As the entity that initiated the forensic investigation, can the Central Bank of Egypt confidently tell the nation that the report submitted to Parliament is complete and nothing is missing? If something is missing, then what prompted them to make such a decision?” Meanwhile, the forensic investigation report contains insights into the findings of the Ecsponent Eswatini licensing process. One of the findings in the report is that Ecsponent Eswatini’s application as an investor advisor was initially rejected by the Capital Markets Department of the Financial Services Regulatory Authority (FSRA).

The application was reportedly filed on October 7, 2013 and rejected on December 14, 2013. One of the reasons for the rejection was that Ecsponent had been soliciting deposits from the public without the authorization and permission of the FSRA and that the proposed investment products were ambiguous, indicating a lack of understanding. The FSRA further reasoned that the company’s proposed key personnel (whose names were deliberately withheld) did not have the relevant experience required to serve as a director of the company.

administrative

On the management side, the report states that the administration of Swaziland investments is carried out in South Africa, including the calculation of interest and dividends and payments to investors. In addition, the parent company allocated operating expense payments to the Swaziland operations. The report reads in part: “The parent company charges Ecsponent Eswatini a monthly management fee which is used to pay for all administrative and management functions provided by the parent company.” The report also mentions that Ecsponent Eswatini has its own bank accounts which are opened in Swaziland and the signatories are Swazi nationals, but the control of the bank accounts is in the hands of the South African management.

Ecsponent South Africa is said to be the parent company that ultimately controls Ecsponent Eswatini. In addition, forensic investigations found that since 2014, the Bank of Swaziland had provided loans to its affiliated companies. “Funds would flow from Ecsponent Eswatini to Ecsponent South Africa and its subsidiaries, but most subsidiaries did not return funds to Ecsponent Eswatini,” the report states. Despite eventually submitting a forensic report, consultants investigating Ecsponent’s investment losses of more than €340 million have been unable to obtain bank account statements for six top businessmen and 15 companies.

information

The investigators were allegedly provided with some of the information, but also relied on communications with the CBE’s head of law, who explained that information located within South African jurisdiction could be requested when needed through cooperation agreements, including mutual legal assistance that exists between the CBE and authorities in neighbouring countries. It is said that while preparing the final report, bank account statements of the six businessmen were requested but the information has not been obtained. Five of the individuals were said to be South Africans and one was a Zimbabwean. The report said they all held senior management positions at companies that allegedly had financial dealings with Ecsponent.

The scope of work described in the request for proposal includes investigating and determining whether there were any irregularities in the way Ecsponent invested money in its investment managers and foreign subsidiaries. The forensic work also aims to investigate and determine whether the investment of assets was in compliance with its investment policy and further determine whether all Ecsponent assets were accounted for and recorded in its books. In addition, the forensic department must determine whether the way in which Ecsponent conducted its business, including whether the operation of any investment schemes, complied with the requirements of the Securities Act and the Financial Services Authority Act 2010.

director

The aim is also to determine whether the directors of Ecsponent have the necessary authority to act on behalf of the company (i.e. Ecsponent) and whether all investment decisions are supported by board resolutions and executed through authorised signatories in accordance with the company’s governance manual and procedures. In addition, the Legal Department must investigate and determine whether the directors of Ecsponent performed appropriate due diligence before making the investment. The investigation must also determine the source of Ecsponent’s assets, where they were subsequently invested, and the investment methods used.

CDH must also determine whether Ecsponent can meet its financial obligations and pay promised returns to investors, and further determine Ecsponent’s fund flows and whether such fund flows involve money laundering or fraudulent activities and transactions. Meanwhile, forensic reports show that about €50 million invested by emaSwati in Ecsponent Eswatini was used to pay for consultants and operating costs.