Did busi­ness­man smug­gle cash?

Khato Civils boss, fin­gered for non­pay­ment in SA, faces probe in Botswana after po­lice find mil­lions of rands in his car

CityPress - - News - SIZWE SAMA YENDE sizwe.yende@city­press.co.za

Botswana po­lice are in­ves­ti­gat­ing Simbi Phiri, a Malaw­ian busi­ness­man based in South Africa, after he al­legedly crossed the bor­der with $886 000 (R11.8 mil­lion) in cash in the boot of his car. Ac­cord­ing to pa­pers be­fore the Botswana Court of Ap­peal, which City Press has ob­tained, Phiri did not de­clare R1.1 mil­lion of the money to cus­toms au­thor­i­ties when he crossed the Tlok­weng bor­der post near Gaborone – and, in so do­ing, al­legedly vi­o­lated the Cus­toms and Ex­cise Duty Act.

Botswana po­lice picked up on this al­leged breach after the full amount was de­posited into the Botswana ac­count of civil engi­neer­ing com­pany Khato Civils at Stan­bic Bank on July 25. They also dis­cov­ered a trail of sim­i­lar trans­ac­tions dat­ing back to 2014.

In back-and-forth court ap­pli­ca­tions, the ap­peal court even­tu­ally granted the direc­tor of pub­lic pros­e­cu­tions a re­strain­ing or­der, al­low­ing him to freeze Phiri’s ac­counts and those of his com­pany, pend­ing an in­ves­ti­ga­tion into al­leged mon­ey­laun­der­ing and re­lated of­fences.

“The in­ves­ti­ga­tion is on­go­ing,” said Nlayidzi Gam­bule, spokesper­son for the Direc­torate on Cor­rup­tion and Eco­nomic Crime (DCEC).

He told City Press this week that “Phiri’s ac­counts are frozen, pend­ing the in­ves­ti­ga­tion”.

Phiri owns Khato Civils, which was one of three com­pa­nies in­volved in a R2.2 bil­lion ten­der to sup­ply wa­ter to 59 vil­lages in Lim­popo’s Mopani district.

Khato Civils has been awarded other mul­ti­mil­lion­rand con­tracts in South Africa.

In his home coun­try, Phiri is a phi­lan­thropist. He built a po­lice sta­tion in Mch­inji worth 85 mil­lion Malaw­ian kwacha (R1.6 mil­lion), and handed it to the coun­try’s min­is­ter of home af­fairs and in­ter­nal se­cu­rity, Grace Chi­u­mia, in De­cem­ber.

He also drilled a bore­hole worth R110 000 for the sta­tion and do­nated a Ford Ranger and five mo­tor­cy­cles to the po­lice. Phiri also spent R3.7 mil­lion on renovating a health cen­tre.

How­ever, 12 sub­con­trac­tors work­ing un­der Khato Civils on the Mopani project al­lege that Phiri has not paid them since Au­gust, and that they are owed about R25 mil­lion.

“Khato Civils told us that the depart­ment of wa­ter Should SA au­thor­i­ties launch a probe into Phiri’s trans­ac­tions in Botswana? SMS us on 35697 us­ing the key­word CASH and tell us what you think. In­clude your name and prov­ince. SMSes cost R1.50 af­fairs and san­i­ta­tion did not pay them and claimed that they want to stop the op­er­a­tion,” said Pat Rit­shuri, one of the con­trac­tors. “We have not been paid since Au­gust.” The depart­ment trans­fers all money to Le­pelle North­ern Wa­ter – the en­tity re­spon­si­ble for bulk wa­ter sup­ply to Lim­popo’s mu­nic­i­pal­i­ties – to pay ser­vice providers.

How­ever, Phiri said Le­pelle owed his com­pany R250 mil­lion.

“I do not keep a cent in my ac­count after I am paid. I have told the sub­con­trac­tors and our sup­pli­ers that we have also not been paid. I do not have cash to sub­sidise the Giyani project. Should I then sell my house to pay them?” Phiri asked.

He said he would not aban­don the project be­cause he had equip­ment val­ued at R100 mil­lion in Giyani which he could not re­move overnight.

“I have done my best for the project. My con­cern is that I have per­formed very well, and if I am paid, we can fin­ish the project three years ear­lier,” Phiri said.

But Phineas Le­godi, Le­pelle’s chief ex­ec­u­tive of­fi­cer, said Khato Civils was paid all its money – ex­cept in De­cem­ber, when a “part pay­ment” was made.

“We have been pay­ing Khato Civils all the time. The only out­stand­ing pay­ment is the one for the month of De­cem­ber,” said Le­godi.

“He has been paid for all the months last year. We made a part pay­ment and we will pay the out­stand­ing bal­ance be­fore the end of Fe­bru­ary.

“The pres­sure be­ing put on me is that we have not been pay­ing [Khato Civils] on time. If that is the is­sue, the ef­fect should be the same … that they are un­able to pay sub­con­trac­tors on time, not that they are un­able to pay sub­con­trac­tors com­pletely,” he added.

Sivikio Mabunda, sec­re­tary at the Fo­rum of Lim­popo En­trepreneurs, said: “We can­not al­low big com­pa­nies to ma­nip­u­late small con­trac­tors. How is [Khato Civils] go­ing to op­er­ate on site if the con­trac­tors are not paid? This mat­ter must be sorted out as soon as pos­si­ble.”

Phiri said he un­der­stood the sub­con­trac­tors would make “all sorts” of al­le­ga­tions against him be­cause they needed to pay their em­ploy­ees.

Re­gard­ing the Botswana case, he in­sisted it was a ploy to sab­o­tage him as he was in line to win a ten­der worth 6 bil­lion Botswanan pula (R7.6 bil­lion).

In that coun­try, Phiri said, Khato Civils had in­vested R60 mil­lion worth of ma­chin­ery.

“It is [a case of] ten­der wars there. They want to put us into dis­re­pute. If some­one else is ap­pointed, that case will end,” Phiri said.

The Botswana Court of Ap­peal’s three judges said in their judg­ment it would be im­proper for Phiri and Khato Civils to be de­nied the use of their money for “un­de­fined pe­ri­ods, sim­ply be­cause there is an in­ves­ti­ga­tion which might lead to a crim­i­nal pros­e­cu­tion, a con­vic­tion of which may re­sult in a con­fis­ca­tory or­der”.

Ac­cord­ing to the judg­ment, a DCEC in­ves­ti­ga­tor found a num­ber of trans­ac­tions in for­eign cur­rency – South African rands, eu­ros and US dol­lars – in­volv­ing Phiri, Khato Civils and Stan­bic Bank fol­low­ing the $886 000 de­posit.

The judges also found that Phiri had en­tered Botswana through the Tlok­weng bor­der on three oc­ca­sions since 2014 and de­posited “large cash amounts” in dol­lars and eu­ros.

“[In July 2015], [Phiri] en­tered Botswana from South Africa through the same bor­der gate, declar­ing cash in the sum of $300 000 [R4 mil­lion] but de­posit­ing $500 000 [R6.6 mil­lion] into one of his per­sonal ac­counts held with [Stan­bic Bank]”, the judg­ment reads.

“Ac­cord­ing to the in­ves­ti­ga­tor’s af­fi­davit, the un­der­dec­la­ra­tions at the bor­der cre­ated a rea­son­able sus­pi­cion that the Cus­toms and Ex­cise Duty Act had been breached in that some of the money was brought into the coun­try il­le­gally, with­out be­ing fully de­clared.”

Phiri’s response was: “It is cor­rect that no clear­ance, or dec­la­ra­tion, from ei­ther the [SA Re­serve Bank] or the [SA Rev­enue Ser­vices] was pre­sented at the point of exit from the South African bor­der into Botswana. My un­der­stand­ing was that there was no re­quire­ment, which un­der­stand­ing was fur­ther com­pounded by the fact that on each oc­ca­sion that I de­clared the cur­rency to the Botswana Uni­fied Rev­enue Ser­vice, nei­ther clear­ance nor dec­la­ra­tion forms were ever de­manded or re­quested.”

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