Fresh blow to Basil Read
After shenanigans were exposed in the Lesotho Highlands Water Project, a new multinational scandal has come to light
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
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
Borotho Matsoso: overseeing a number of investigations related to corruption
Stuart Brown: LMDC says he no longer works there