Sunday, April 21, 2024

Men who sued DIS for P18.6m accused of trying to defraud CEDA of P1.6m

Two businessmen who had a dramatic run-in with the Directorate of Intelligence and Security Services (DISS) in 2012 are facing charges of defrauding the Citizen Entrepreneurial Development Agency (CEDA) of P1.6 million.

However, as they have argued before, Tshepo Makgalemele and Thulaganyo Boiditswe maintain that the charges are part of an unorthodox legal strategy by then DISS Director General, Isaac Kgosi, to force them to withdraw a case in which they were suing the spy agency P18.6 million for unlawful detention. Kgosi is out of office now, having been fired by President Mokgweetsi Masisi last month. At the time of his departure, the investigations that have led to the court case were already underway.

Through their company, Kgang Tsa Rona, the two men were granted a P1.6 CEDA loan to open Botswana’s only franchise of Sparkling Auto Care Centre, a unique South African operation which combines car wash and valet with automotive body repair services. The company is based in Potchefstroom and its Chief Executive Officer is Cornelius Gustafson. The saga features some of the better known names in Botswana’s politics, business and Christendom.

Makgalemele and Boiditswe hoped that businessman Soccer Moruakgomo would leverage his “business connections and experience” to raise the required start-up capital. Moruakgomo had been recommended by then Assistant Minister of Health and Wellness, Phillip Makgalemele – who is Tshepo’s uncle. While he is supposed to have made “several promises”, Moruakgomo never actually coughed up the money. It was then that the Kgang Tsa Rona directors approached Bernard Bolele, “a prominent businessman, who showed interest once we presented a business proposal to him.” Bolele, a lawyer who served a stint as Mahalapye East MP on a Botswana Democratic Party ticket, came into the picture ahead of a directors’ meeting in Johannesburg that Boiditswe couldn’t attend. Bolele and Makgalemele did and managed to thrash out an agreement with Gustafson and Sparkling’s chairman, Veli Mokoena. During the Johannesburg meeting, it emerged that Sparkling and the Botswana Roman Catholic Church had formed a company which Kgang Tsa Rona had to buy a stake in if it was to remain part of the carwash venture. Then Bishop Valentine Seane later had a meeting with the directors of Kgang Tsa Rona in Gaborone. Motor magnate, Satar Dada, had written a letter to CEDA supporting this venture.

The charge sheet that has brought the Kgang Tsa Rona directors before the Village Magistrate Court in Gaborone says that Makgalemele and Boiditswe provided false information to then CEDA Gaborone’s Portfolio Manager, Anastacia Makwa, by stating in their applications forms that Kgang Tsa Rona (trading as Sparkling AutoCare Botswana) had a valid franchise agreement with Sparkling Auto Care Centre which they had paid P900 000. DIS pounced before the deal could be concluded, arresting both men at an exclusive restaurant at Airport Junction Mall and locking them up at two separate police stations.

The state’s version of events has been recounted in an affidavit that Kgosi deposed to last year when he was still DIS Director General. According to him, after Kgang Tsa Rona’s application for a P2.5 million CEDA loan was rejected, its directors submitted another application for a lesser amount ÔÇô P1.6 million ÔÇô which was shot through with fraud. Kgosi affidavit says that the men tendered a false tax invoice for the sum of P900 000 by “conniving” with some CEDA employees. The claim they made was that the money was part of their contribution to buy plant machinery. They are also said to have produced a forged letter purporting to be from Sparkling confirming that the agreement between the latter and Sparkling had not lapsed. On the other hand, Gustafson is said to have “vehemently disputed” the authenticity of the letter.

“I aver that there was no business which the plaintiffs had acquired through CEDA at the time of the arrest and detention. In actual fact, the CEDA loan was going to be used to purchase the franchise and set up the business,” Kgosi’s affidavit says.

The investigation and detention happened in 2012 and it is only this year that the men were charged with fraud and only last year that they were interrogated by the Serious Crime Squad of the Botswana Police Service. Oddly, the CEDA employees that Kgosi alleges they connived with have themselves not been charged. Not only is the state being taken to task over the six-year lapse, the accused believe that the criminal investigation that resulted in the fraud charges have been trumped up to compel them to withdraw a case in which they sued the DISS (which arrested them) and BPS (which detained them). The language that Makgalemele uses in his affidavit is that the charges were a result of Kgosi “exerting improper pressure and clear intimidation for me and my co-partner to withdraw the matter and/or give them some form of advantage.” From their telling, the suspects say that DIS investigators couldn’t charge them with any criminal wrongdoing in 2012 and let them go. Aggrieved with what they had suffered at the hands of DISS and BPS officers, the two men sued both for P18.6 million but lost because then Acting Justice Jennifer Dube ruled that they took too long to bring the case.

Subsequent to the launch of the lawsuit, both men were summoned to the Serious Crime Squad offices in Kgale Mews in Gaborone where they were separately interrogated by what they describe as a “basketball team” made up of nine detectives ÔÇô a basketball match features nine players a side. In his own court papers, Innocent Bachobeli, a Serious Crime Squad detective, says that the case was brought to his office “sometime” in 2016. This would mean that the police only got involved in the matter four years after the alleged crime was committed and of inactivity on the part of the part of DIS. The men are being represented by Lyndon Mothusi and in his papers, Boiditswe said that the latter’s exclusion during the interrogation was improper because the detectives “knew the matter to be before court and it is unclear at this stage as to whether their Counsel had knowledge of their uncouth actions as no communication to that effect landed on the shores of the chambers of Mothusi and Company Attorneys.”

For his part, Makgalemele alleges that the detectives, whose interrogation of him he secretly recorded, were extremely rude and hostile and at one point, one said in Setswana, “O a tshameka o santse o tla a bua” ÔÇô meaning “You are still playing, you will tell us the truth.” All, he claims, “asked questions one after the other, collectively, intermittently, continuously, repeatedly in an attempt to extract inconsistency” between his version of events and Boiditswe’s. The outcome of this investigation is the case before the Village Magistrate Court which the men are fiercely contesting. 

In their defence, the two suspects say that they explained to CEDA that they contributed the P900 000 contribution “in kind” ÔÇô laying the groundwork, meeting with the Gaborone City Council officials, identifying and acquiring the premises, connecting water, power and telephone services, hiring 25 staff members as well as travel expenses to and from Potchefstroom and payment of customs duty. They question why it took six years to charge them because there is no way that the investigation could have taken that long: all documents were at the CEDA offices in Gaborone all along, they have never left Botswana and a trip to Potchefstroom, South Africa would have taken just one day.

“We didn’t contribute to the delay as state had absolute discretion to prosecute,” they argue.

The men have sought to use CEDA’s own response to the alleged fraud to prove their innocence. By their account, their application was approved on the strength of its authenticity – “notably the franchise agreement”; the letters from CEDA makes no mention of “foul play”; the in-kind contribution was validated by CEDA’s own Risk Department; and CEDA never reported the matter to the police for six years. Makwa, who has since left CEDA, reported the matter to the police last month (May 8) but not only have the suspects dismissed her action as an “afterthought”, they are also challenging her credibility. In service of the latter, they point out that Makwa sought clarification on their contribution which was given through copies of invoices and the franchise agreement and also made site visits to validate information contained in the application “notably the contribution in kind.” Regarding the fraud, they point out that no handwriting expert or forensic analysis has been used to prove such allegations.

The other issue is technical. The men are being tried as individuals but they contend that Kgang tsa Rona, which dealt with CEDA, should have been incorporated in the case because it was a key player.

“We were acting in our representative capacity,” they argue.

They have made their own application to the High Court to have the charges thrown out because the state took way too long to bring them. To that end, they have invoked Section 10 of the constitution which says that charges must be withdrawn against those charged with a criminal offence if the case is not heard with “a reasonable time.” In a parallel application, they are appealing the High Court they lost. There is a little complication though because the period they should have appealed within has long lapsed. To that end, they are asking the High Court for condonation (forgiveness) to file outside the prescribed period of time.


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