Textile officials face M700m theft charges

FamCast News
a month ago


By Neo Kolane

The Directorate on Corruption and Economic Offences (DCEO) has charged nine people associated with local textile factories CGM Group and Presitex Enterprises, and three other companies, with four counts of corruption and money laundering involving M700 million.

The accused are four Indians, two Basotho, one Shri Lankan, and two South Africans. The first accused, Indian Madhav Vasant Dlavi, is the director of both factories. Charged along with the nine are three companies, two of which are registered in South Africa and Dubai, respectively

On the first two counts, four of the accused are charged with misappropriating or diverting for their benefit property or private funds entrusted to them by virtue of their positions, to the tune of M700 million. The money was allegedly stolen from the two factories in 2017.

The other two counts indicate how all the accused benefitted from proceeds of the alleged crime by using the stolen money to buy motor vehicles, immovable property, and unspecified machinery.

Meanwhile, the minister of trade industry and business development, Mokhethi Shelile, on Wednesday this week assured workers of the two factories, CGM and Presitex Enterprises (PTY) Ltd, that everything will go back to normal.

This after the workers got to work in the early hours of that morning and could not gain access to the premises because gates were locked.

It emerged that the two firms had been locked up by the DCEO to facilitate its investigations.

“If we had left the money laundering to continue unabated, it would have escalated to the extent that the factories would closed down completely.

“This would have resulted in workers not getting their terminal benefits. We did what we did so you can continue with your jobs going forward,” Shelile said.

He explained that Presitex Enterprises (PTY) Ltd was one of the first to be based at Ha Thetsane which started out with 300 workers.

The minister vowed that he would not allow anyone to bring the factory which employs thousands of workers on its knees.

“We want that to stop the rot. It has gotten to a point where you as workers were going to lose your jobs,” he told the employees.

Presitex Enterprises Pty (Ltd) is owned by Solandra Inc 99 percent and Eugenia Change 1 percent and the sole director is Madhav Vasant Dalvi.

The Lesotho government provided a financial bail-out of M30 million to CGM Group in 2008, which was meant to be converted into equity as part of the broader restructuring of the textile industry.

In 2013 CGM Group concluded a further loan agreement with the government, and in 2014, the government issued guarantees in the total of M74 million to Presitex Enterprise and CGM Group. The grant was extended to M150 million.

While being beneficiaries of the said credit facility from the government, the respective entities not only failed to honour their obligations to repay back the loans granted to them, but they also allegedly orchestrated a well calculated corrupt scheme of embezzling and misappropriating funds out of their respective entities.

Presitex and CGM Group through its director Dalvi and others reportedly engaged in a series of money laundering transactions in terms of which CGM Group funds were corruptly diverted out of the company using a series of offshore shelf entities and transaction.