Kgosi faces money laundering charges

05 Aug 2018

The Directorate on Corruption and Economic Crime (DCEC) is expected to add former Directorate of Intelligence and Security Services (DIS) Director General, Isaac Kgosi to the list of defendants who are facing money laundering charges.

This follows the emergence of vital evidence last week that former Kgori Capital and Khulaco Managing Director Bakang Seretse and his co-accused in the P250 million money laundering case acted on the instruction of the former DIS boss.

Mordechi Bareshi, the Vice President of Dignia Systems deposed an affidavit before the DCEC last week stating that Isaac Kgosi had written a letter informing them that the DIS had tasked Khulaco (Pty) Ltd to pay Dignia Systems on behalf of the Botswana government. The letter written by Kgosi to Dignia Systems has been passed to the DCEC and is expected to form supporting evidence against the former DIS boss.

Dignia Services vice president further revealed that the letter written by Kgosi stated that Khulaco Management Services had been appointed by the government of Botswana to manage its assets. 

It has also emerged that at the time Kgosi asked for money from the Petroleum Fund allegedly to build Petroleum Storage facilities, he was already in talks with Dignia Services to procure intelligence equipment from them. The money from the Botswana Petroleum Fund was subsequently illegally diverted to pay for the equipment from Dignia Services.

The Dignia Services boss stated in his statement to the DCEC that they have been dealing with the DIS “for the past six years or so “and had entered into an agreement with the spy outfit for acquisition of security equipment and surveillance platform with associated training. “There had been discussions for the past three years (prior to signing the contract) in 2017. The components which were being discussed with the DIS prior to the contract were: 1 VIP training; 2 Special Forces Training, 3 Unmanned Aerial Vehicles 4 operational imint real time video course 5 SUV platforms (support and training).

“He says “Dignia has already made deliveries on the contract such as; weapons ( pistols, rifles, machine guns, ammunition ) VIP training in Israel; Site survey a team of Dignia came several times to Botswana ; The team from Israel came to do screening. This involves testing personnel that will go to Israel. Dignia has already received USD 11, 320 000, 00 which is half the contract sum. The payment was made on 21st November 2017.

The Sunday Standard can reveal that P118, 945,045.70 was telegraphically transferred on November 21, 2017 from the Khulaco account 0002704015955, Capital Bank, Main Branch. to Dignia System Limited Israel Bank, Mizrahi Tfahot.

This was part of the P250 million initially requested by former head of DIS, Isaac Kgosi to build fuel containers for security agencies but ended up transferred to Israel to pay for military, anti-poaching and surveillance equipment.

On August 2017, Kgosi wrote a confidential Savingram to the then Director of Energy Department, Kenneth Kerekang requesting a total of P250 million to be used in the construction of Petroleum Storage Facilities.

“The objective of constructing and maintaining the facilities,” wrote Kgosi “is to ensure that there is continuous supply of petroleum products for the essential Services of the Government.”

“Currently the facilities are owned and operated primarily by the Directorate of Intelligence and Security Services. However there is a need to expand the facilities to include other essential organs of the Government especially during petroleum supply disruptions,” added Kgosi in his initial motivation.

He added that new potential sites for such facilities had already been identified at Lobatse, Mahalapye, Maun, Nata, Gaborone and Lonetree.

“We therefore kindly request for the release of BWP 250 million for the detailed design and construction of some sites of the proposed projects.”

 

The same day the Director in the Department of Energy, Kenneth Kerekang wrote back to Kgosi that the P250 million had been approved.

“Please be informed that your request has been acceded to and be assured that the funds P250 million) has been reinfenced (sic) from the National Petroleum Fund and will be released as per your request. The National Petroleum Fund is managed by a company owned by Bakang Seretse and Botho Leburu.

In what comes across as conflict of interest, the money was to be deposited into the account of DIS Fund Managers Kgori Capital whose Managing Director is Bakang Seretse.

“You are therefore requested to access the funds directly through our Fund Manager whose details are outlined below: Managing Director, Kgori Capital (Pty) Ltd, Private Bag 1253, ABC Sebele, Gaborone...”, states Kgosi in his letter to the Department of Energy.

A copy was sent to Bakang Seretse, the Managing Director of Kgori Capital.

The following day on the 8th August, 2017, Bakang Seretse waded into the conversation through a letter under the letterhead of Khulaco Management Services written to the Department of Energy.

Investigations have shown that Khulaco is a front company that forms part of a suite of companies owned by the DIS but managed independently by legitimately registered investment companies.

The listed directors of Khulaco Pty Ltd are Bakang Seretse and Botho Leburu.

“… We thank you for your instruction. We advise that our fees in relation to the management and disbursement of the funds would be an up-front fee of 20% [P5 million] of the total Funds disbursed/allocated,” wrote Seretse.

“We would require a meeting with yourselves and the Directorate of Security and Intelligence to understand how the Funds are to be disbursed and or ring fenced. In addition we would require an understanding of the projects being undertaken and issues relating to accountability, reporting lines and ownership of the Funds to be disbursed are to be addressed.

Two days later on the 10th of August 2017, P250 million was disbursed from the National Petroleum Fund to the bank account of Khulaco Pty Ltd, account number 0002704015955, Capital Bank, Main Branch.

Hardly a month after the money was paid the Director General of DIS, Isaac Kgosi changed tune on what the money was originally supposed to be.

He wrote a letter to Permanent secretary in the Ministry of Minerals stating that priorities have since changed following the new security threats that the country was facing.

“…following our allocation of P250 million we have been continuously assessing reports and closely monitoring the country’s dire threats in conjunction with our “Intelligence National threat assessment Document.” Our assessment has since revealed that the greatest threats to the security of our economy is the intensified wildlife poaching, human and drug trafficking. Monitoring of these threats requires sophisticated security equipment and advanced surveillance capabilities. In light of the above, we request for variation of the intended usage of the approved BWP 250 million to acquisition of security and surveillance equipment in order to address this detrimental threat to the country’s economy,” wrote Isaac Kgosi.

The request was approved the following day by acting Permanent Secretary in the Ministry of Minerals, Dr Obolokile Obakeng.

The variation and diversion of funds as approved goes against the stipulated guidelines of payment from the National Petroleum Fund.

The money was diverted after Public Procurement and asset Disposal Board had declined a request by DIS head to directly appoint design and construction of the storage tanks without going for tender.