Sunday, September 27, 2020

Taxman subjects Isaac Kgosi to a lifestyle audit

Former Directorate of intelligence and Security Services (DISS) Director General, Isaac Kgosi’s dealings have been placed under a microscope in an ongoing comprehensive lifestyle audit conducted by the Botswana Unified Revenue Services (BURS).

Eye witness accounts have detailed how the BURS team driving GP number plate vehicles swooned on a number of farms linked to commercial farmers who have been dealing with the former DISS boss.

The BURS investigation unearthed supporting information for the Directorate on Corruption and Economic Crime (DCEC) investigation into Kgosi’s alleged corrupt relationship with AfricIntel boss Richard Miles.

The BURS raid turned up information that Richard Miles gave Kgosi close to 150 prime breed herds of cattle under questionable circumstances. The information is expected to build on earlier investigations by the DCEC that sometime in 2010, the DIS is alleged to have fraudulently awarded  AfricIntel a tender worth P100 million to train its intelligence and security personnel.

In turn, AfricIntel subcontracted another British company, Bowman Risk Management to do the training. AfricIntel only provided the premises (for training) and transportation. The total bill by Bowman (the subcontracted company) was just over P1.5 million. Surprisingly, AfricIntel slapped the government with an invoice of P100 million.

Investigations revealed that Bowman’s director, Peter Phelan had submitted all the company’s invoices to the main contractor, AfricIntel, which then inflated the costs by close to P98.5 million.

A dispute subsequently arose between Phelan and AfricIntel because the Bowman’s boss demanded that his share be increased in light of the inflated invoice presented to government. Sunday Standard has established that Phelan has agreed to testify against AfricIntel and Isaac Kgosi. The BURS findings have provided for the first time, information on Kgosi and Richard Miles’ personal relationship, suggesting that the duo may have conspired to defraud government of close to P100 million. The Sunday Standard was however not able to establish if the 130 herd of cattle which changed hands between Richard Miles and Isaac kgosi were linked to the DIS P100 million controversial deal.

Further investigations have revealed that the DIS under Isaac Kgosi allegedly bought training premises at Kgale Mews) from Richard Miles of AfricIntel under dubious circumstances. The premises were also overpriced. The DIS deputy director Tefo Kgotlhane told DCEC investigators that Kgosi told him he “liked the premises”.

Richard Miles was also in partnership with the late Super Koontse in AST Botswana, a subsidiary of the JSE listed AST group which was in 2000 awarded the contract for the design, supply and implementation of the National Livestock Identification and Trace-back System (LITS) for Botswana`s Ministry of Agriculture. Koontse however later died under mysterious circumstances.

The BURS lifestyle audit which for now has been concentrating on farms linked to the former DIS Director General has branched off into another investigation on how Isaac Kgosi’s farm in Maboane was connected to the Botswana Power Corporation grid. The farm which has been turned into a security fortress complete with state of the art CCTV cameras has been connected to the BPC grid via a 30 kilometres power-line estimated at millions of Pula’s. There are however no records to shed light on how much Kgosi paid for the connection and the BPC Chief Financial Officer Cross Kgosidiile is alleged to have insisted that he was not aware of any such dealing between Kgosi and the power utility.

The BURS lifestyle audit has also turned up information that the former DIS boss has shares in the Botswana Stock Exchange listed Lestshego Holdings Limited, Sefalana Holdings Company and Botswana Telecommunications Corporation (BTC) running into millions of pula.

Up until now, the only information which had been made public on Kgosi’s shareholding was with Choppies and RBV (PTY) Ltd a company owned by Choppies Directors Ramachandran Ottappath and Farouk Ismail. As at June 2014, Kgosi’s shares in Choppies were worth P17 million. Although the share certificate issued to Kgosi on September 2011 shows that the former DIS Director General was issued 3 999 990 shares at P1 a share, Sunday Standard has been able to establish that Kgosi was actually offered the shares at 1Thebe a share which priced the shares at P40 000.

The Sunday Standard, however has not been able to establish if Kgosi paid the P40 000. Two months after Choppies gave Kgosi the shares at 1 Thebe a share, the company placed 260 869 565 to invited investors at P1,15 a share and this immediately pushed Kgosi’s shares in Choppies to about P4 000 000. In June 2014 before Kgosi offloaded his shares in the supermarket chain, Choppies shares were valued at P4, 20 a share meaning that Kgosi’s shares stood at P16.8 million. Curiously, Kgosi’s company, Silver Shadows which owned the shares in Choppies was not listed in the prospectus issued by the chain store in its prospectus which was issued prior to the listing on Botswana Stock exchange.

The Prospectus only listed the directors’ shareholding in the company. The prospectus list only three shareholders being Ramachandran Ottappathu who owns 488 912 658 shares, Farouk Esssop Ismail also owned 488 912 658 shares at the time of listing while former President Festus Mogae owns 40 000 000 shares which in 2014 valued more than P160 million.

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Sunday Standard September 27 – 3 October

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