Monday, September 28, 2020

Did Kebonang twins steal a leaf from the ESAAMLG report?

Former Minister Sadique Kebonang and his twin brother Zein benefitted from weaknesses in Botswana’s money laundering regime a few months after the weaknesess were exposed by the Eastern and Southern African Anti-Money Laundering Group (ESAAMLG).

The Kebonang twins’ alleged money laundering tricks seem to have been borrowed from the pages of the ESAAMLG mutual evaluation report for Botswana.

ESAAMLG in May 2017 warned Botswana authourities that the Botswana Real estate sector was “highly vulnerable to money laundering risks.”

The assessment by the anti money laundering watchdog was aimed at establishing the extent to which the Botswana real estate sector was exposed to money laundering and terrorism financing and “whether the risks in the sector have been determined.”

ESAAMLG warned that “due to most of the transactions in the sector taking place in cash and anti money laundering supervision not having started in this sector, it makes the sector highly vulnerable to money laundering risks.”

Three months later between 29th and 31st August Sadique Kebonang as Director of Raging Bull and his money laundering co-accused Bakang Seretse of Basis points “engaged in a transaction involving property, which property was proceeds of crime.”

The charge sheet states that, “the proceeds of crime in the form of P6.8 million was transferred from Basis Point account held with Capital Bank to Seef Properties of which the entire sum was used to purchase unit 9 Nkwee Court, Unit 17 I towers, Plot 54368, CBD and Unit D4 Bemovville all in Gaborone.

Two months later on 25th October 2017 Seretse paid P2,850,000 towards the purchase of property no.3338-KO held under notarial deed of cession No MA901/2017 in favour of Raging Bull PTY (Ltd), a company owned by Kebonang.

A week later he paid P2.400, 000.00 towards the purchase of a unit consisting of section no.17, iTowers Scheme ltd held under deed of sectional transfer no. St 307/2017 in favour of Raging Bull (Pty).

On the same day, 3rd November 2017 he bought another property being a Parking Bay P125, iTowers scheme bought together Plot 54368 iTowers 2017 in favour of Raging Bull (ltd) held under notarial deed of cession of Real right: Exclusive Use Areas CRR 161/2017.

The ESAAMLG report which is believed to have informed last month’s decision by the European Union (EU) to black list Botswana as a money laundering high risk country also warned that Botswana’s Politically Exposed Persons (PEPs) posed a very high money laundering risk and that Botswana should impose mitigating controls.

Sadique and his twin brother Zein, a High Court Judge are classified as Politically Exposed Persons (PEPs). The recommendation by ESAAMLG followed findings that between 2013 and 2016 the Botswana Financial Intelligence Agency (FIA) received a total of 246 reports of suspicious financial transactions most of which involved politicians and their relatives (Politically Exposed Persons PEPs).

ESAAMLG reported that the “Suspicious Transactions Reports which the FIA gets from reporting entities are mainly on fraud and tax evasion and most of the cases involve Politically Exposed Persons (PEPs.)

ESAAMLG warned that, “Botswana does not apply measures or business relationships and transactions on any identified high risk customer or country. The legal requirement does not provide this requirement and there has not been any assessment of the ML/TF risks in Botswana to determine low or high risk customers with a view to applying commensurate mitigating controls. As a result there are no enhanced measures applied on PEPs and any others which have been identified through interview to be vulnerable to money laundering.”

The report further established that, “there are no AML/CTF requirements relating to KYC/CDD (know your customer/ customer due diligence) for PEPs in Botswana. The assessors therefore wanted to examine whether PEPs were not exposing (FIs) Financial Institutions and DNFBPS (designated non financial business and professions) sectors to proceeds generated from such related corruption and other crime. The assessors also wanted to understand the extent to which the absence of KYC/CDD requirements on PEPs could be affecting the AML/CFT regime regulating FIs and DNFBPS.

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Sunday Standard September 27 – 3 October

Digital copy of Sunday Standard issue of September 27 - 3 October, 2020.