Sunday, December 3, 2023

Court orders DCEC, BURS and BPS to return P11.6 million to companies

Two multi-level marketing companies scored a major legal victory against three government agencies and the head of one of them at the Gaborone High Court last Wednesday morning.

Acting on conviction that the two companies, Longrich Supplies and Majesty Yours as well as their agents were flouting Botswana company and taxation laws, government officers put both out of business by freezing their bank accounts.

The two companies sell a variety of products (primarily in the health and beauty) through a marketing strategy in terms of which the sales force is compensated not only for sales they generate, but also for the sales of the other salespeople that they recruit. This strategy, which is also used by a United States company called the American Way (“Amway” as it is more commonly known) provides multiple levels of compensation.

After carrying out an investigation, Botswana Unified Revenue Services determined that Majesty owed it tax to the tune of P8 851 035.99 and that Longrich Supplies owed P2 806 620.16. Following such investigation, BURS issued notices of preliminary assessment to both companies in late April. The companies didn’t comply.

Business ground to a halt on May 10 when Serious Crime Squad officers from the Botswana Police Service (BPS) as well as those from the BURS and the Directorate on Corruption and Economic Crime raided the offices of Longrich at Commerce Park in Gaborone. The officers searched the offices and seized financial documents, desktop computers, laptops and samples of stock. The company’s bank account, as that of the Majesty Yours was frozen, effectively shutting down what by all accounts are very lucrative business operations. A search-and-seize operation was also undertaken at the residence of Elinah Tai and Walter Mogi at Phakalane.

The aggrieved parties engaged attorney Abel Modimo who successfully prosecuted their claim by managing to persuade Justice Gaolapelwe Ketlogetswe to not only release the money belonging to the two companies but to also interdict the government agencies from taking any further action against them until the matter is resolved. In terms of the court order, the agencies should demonstrate why the notices of preliminary assessment that were issued by BURS cannot be reviewed and set aside; why the search and seizure of Longrich property cannot be declared wrongful and unlawful; and why the freezing of the bank accounts cannot be set aside. The matter resumes on August 2 and in the interim period, the court has ordered the government agencies to stay out of the companies’ business. In addition to lifting the freezing of the bank accounts, the agencies will bear the cost of the case. BURS’ Commissioner General is cited as the fourth respondent in the matter.


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