Fresh blow to Basil Read

Af­ter shenani­gans were ex­posed in the Le­sotho High­lands Wa­ter Project, a new multi­na­tional scan­dal has come to light

Financial Mail - - BETWEEN THE CHAINS - Carmel Rickard

SA con­struc­tion firm Basil Read has been thrust into a new cor­rup­tion scan­dal in Le­sotho, as that coun­try’s law­mak­ers ac­cuse one of its sub­sidiaries of be­ing in­volved in a fraud­u­lent R650m min­ing con­tract.

This is an­other blow to Basil Read, which was placed in busi­ness res­cue in

June and is still hop­ing to fi­nalise a res­cue plan. It is also an­other in­stance of a multi­na­tional be­ing linked to a cor­rup­tion scan­dal in the tiny land­locked

African coun­try.

This week, a trial be­gan in the high court in Maseru, and the charge sheet listed two ac­cused: Basil Read (Pty) Ltd, based in Boks­burg, SA; and Stu­art Michael Brown, direc­tor and ex­ec­u­tive chair­man of Liqhobong Min­ing De­vel­op­ment Co (LMDC), whose ad­dress is given as

Som­er­set West, SA.

They are charged in con­nec­tion with fraud al­legedly con­cern­ing three com­pa­nies — the first be­ing one of Basil Read’s sub­sidiaries regis­tered in Maseru. The sec­ond is B&E Le­sotho, also known as Blast­ing and Ex­ca­vat­ing (B&E), a com­pany dereg­is­tered from the Le­sotho com­pany reg­is­ter in De­cem­ber 2014. The third is LMDC, the com­pany of which Brown was a top of­fi­cial, regis­tered in Le­sotho.

In April 2014 LMDC signed a lease agree­ment with the

Le­sotho gov­ern­ment un­der that coun­try’s Mines & Min­er­als Act and the fol­low­ing year put a ma­jor con­tract out to ten­der, for open-pit min­ing in Le­sotho.

Ac­cord­ing to the charge sheet, in March 2017 Basil Read, “pur­port­ing to be B&E”, sub­mit­ted a writ­ten ex­pres­sion of in­ter­est, de­spite the fact that B&E “no longer ex­isted”. A few months later, Brown, al­legedly act­ing with

Basil Read and to fur­ther that com­pany’s in­ter­ests, pro­posed to the board of LMDC that B&E be awarded the con­tract.

In the process Brown is al­leged to have “rep­re­sented” to the LMDC board that B&E was an ex­ist­ing and

lo­cally regis­tered com­pany in Le­sotho and that its ap­pli­ca­tion to ten­der was in or­der. Partly due to this rec­om­men­da­tion, the board awarded the con­tract to B&E.

In No­vem­ber 2017, Brown signed a con­tract with Basil Read Le­sotho on be­half of LMDC, “thereby hold­ing out to LMDC” and to the min­is­ter of min­ing in Le­sotho that this was the con­tract awarded ear­lier that year.

In truth, how­ever, Basil Read, Brown and Basil Read Le­sotho all “well knew that the con­tract had been awarded to a nonex­ist­ing en­tity” and that Basil Read Le­sotho only came into ex­is­tence in Oc­to­ber 2017 — af­ter the con­tract had been awarded.

The direc­torate on com­mer­cial & eco­nomic of­fences (DCEO) in Le­sotho — that coun­try’s equiv­a­lent of the Hawks in SA — says the two ac­cused un­law­fully and fraud­u­lently mis­rep­re­sented that B&E was an ex­ist­ing and regis­tered com­pany in Le­sotho while it did not ex­ist.

The sec­ond count faced by the two is that they mis­rep­re­sented to

Le­sotho Times

Borotho Mat­soso: over­see­ing a num­ber of in­ves­ti­ga­tions re­lated to cor­rup­tion

Stu­art Brown: LMDC says he no longer works there

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