The Directorate on Corruption and Economic Crime (DCEC), acting with the Directorate of Public Prosecutions (DPP), recently lost a court move to have bank accounts belonging to former Minister of Defence Justice and Security Dikgakgamatso Seretse’s company, Monigbot (PTY) Ltd frozen, court documents show.
This follows Seretse’s company Monigbot (PTY) Ltd’s registration of a company called Khato Civils (PTY) LTD which is subject to a DCEC investigations into money laundering claims.
Court records show that Khatho Civils paid Monigbot professional fees for facilitating the said registration and it is this that led to Monigbot’s bank account being frozen.
The documents also show that the Director of Khato Civils (PTY) Ltd, Simbi Ashan Phiri, and Seretse, as the sole shareholder and director of Monigbot (PTY) Ltd, confirmed that the company was paid by the former after the successful registration.
Following such transfer of funds from Khato Civils (PTY) Ltd’s accounts held by Stanbic Bank Botswana into Seretse’s company, the former’s accounts were also frozen as part of the DCEC’s investigations into the matter.
Court records reveal that Monigbot (PTY) Ltd’s frozen account was subsequently released from such restraint after some common ground was reached between the DCEC and the Financial Intelligence Agency.
According to court records, the DPP recently applied to the High Court to have the temporary interdict which resulted in the accounts of Khato Civils (PTY) LTD frozen to be made a final decision of the court.
The court documents state that: “The Applicant (DPP)’s case is anchored primarily on the affidavit of one Mompoloki Snax Oneile Abednigo Rapulane, an investigation officer from the DCEC.”
A file with a report of an allegation of a financial offence was allocated to Rapulane following allegations that an amount of US$8 886 000.00 was deposited into one of Khato Civils (PTY) Ltd’s account held by Stanbic Bank Botswana.
The court records reveal that on July 26, 2015, Phiri entered Botswana and declared $300 000 at the border and that next day he deposited into his personal account an amount of $5 000. On July 8 he deposited an amount of $800 000 and R120 000 into his personal Rand account.
According to Rapulane, an analysis of the said accounts, inter account transactions and even difference currency cash deposits into other accounts, made him believe that a financial crime of money laundering and more had been done.
The investigator stated that there was an under declaration of currency at the border by Phiri. He concluded that such conduct was an offence contrary to sections 14 and 95 of the Customs and Excise Duty Act. He further summarised that an offence under Section 47 of the Proceeds and Instruments of Crime Act had been or were being committed hence the application for a restraining order.
In his judgment, Justice Michael Leburu noted that Phiri had provided credible evidence that the funds restrained were lawfully procured and obtained from Forex World in South Africa. Forex World has confirmed it. Leburu said Phiri had also produced evidence proving his strong financial muscle.
“He is the owner of several companies that are financially sound. One such company had a turnover of about R2.5 billion in the last 12 months; the other one had a turnover of about R350 million,” said Leburu.
The judge further noted that: “His (Phiri) bank balance speaks of itself and has about R3.8 million in his personal account in Botswana and about R5.2 million in South Africa.” Leburu also found that Phiri’s banker and auditor have confirmed all these.
He said all these uncontroverted and unchallenged evidence amounted to a material change of circumstances. “The prejudice that is occasioned by the restraint order is palpably evident. The first respondent (Khato Civils (PTY) Ltd) is unable to carry on the business in the absence of available funds,” said Leburu.
He said the other important factor which in his view lends credence to a change of circumstances is that the recipient of some of the fund in question, Monigbot (PTY) Ltd, has its bank accounts frozen.
“Section of the Proceeds and Instruments Act also applies to receivers of such ‘ill-gotten money,’” he said. It is common cause that it was frozen as it was suspected to have received ‘ill-gotten money’. Such an account has now been unfrozen. He said the same benefit should therefore apply to the source of such funds.”
Leburu said Phiri has proven, on a balance of probabilities that the funds in question were lawfully acquired and imported into Botswana, hence there is no basis for continued restraint.
“I presume that Monigbot (PTY) Ltd account was also unfrozen after it proffered as reasonable an explanation on how it acquired such funds,” he said. The judge therefore ruled that the DPP and DCEC have failed to make out a case of the continued restraint of Khato Civils (PTY) Ltd’s accounts.
The State is expected to appeal the judgment. “There is a high possibility that the state will make an urgent application for appeal,” said one of the state prosecutors who represented the DPP in the case.
Defence counsel Tengo Rubadiri said he was happy with the outcome of the case. He refuted allegation that that the funds were likely to be transferred to another country following the controversy that surrounded their entry into Botswana. “This is not true. This money will be invested in Botswana,” he said, adding that the State was within its rights to appeal.