Africa-Press – Eswatini. The Financial Services Regulatory Authority (FSRA) has admitted that there are loopholes in the country’s legislation, which are exploited by foreign investment companies that promise ridiculous returns.
The authority revealed that such companies, including Ecsponent, did thorough research on the country’s legislation to ensure that they were granted operating licenses only to change along the way and make it difficult to understand their actual motives.
This was during the senators’ workshop on three bills piloted by the ministry of finance held at Eswatini Revenue Service (ERS) headquarters in Ezulwini yesterday.
These are the National payment Systems Bill, Income Tax Amendment Bill and the Reinsurance Bill.
The senators questioned how FSRA issued licenses to companies who in turn rob gullible Emaswati of their hard earned money under the impression that they would get massive returns.
This was not the first time the matter was raised by the legislators since Ecsponent was liquidated while in possession of about E340 million invested mainly by pensioners.
Senator Princess Celumusa was the first to raise the issue, highlighting that investment schemes robbed the nation.
“I do not think I would be scandalising them if I mentioned that one such company is Ecsponent, which took E340 million belonging to Emaswati who are mainly pensioners. Some of the investors have lost their lives after losing their life long savings,” she said.
FSRA Manager Licensing and Inspections, Bukhosi Dlamini, said he could not dwell much into this matter since it had been deliberated at length in Parliament.
“I admit we did licence them but the matter is now beyond our scope. The ministry is better placed to respond to the questions,” he said.
However, Ministry of Finance Principal Secretary, Sizakele Dlamini, insisted that Dlamini explained the role they played in licensing the company.
Bukhosi said their role was to issue licenses but Ecsponent conducted thorough research on their requirements to identify any loopholes before applying for the licence.
“I can assure that we did our research on them as well to ensure that they were legit and we ended up with no reason not to issue them the licence,” he said.
He said the company manipulated the system and managed to find loopholes within the legislation and provided them with the exact documentation needed to acquire a licence.
“It is difficult to monitor these companies because they are good at tricking us to get what they want only to turn around in future, leaving our hands tied,” he said.
Issued
Bukhosi stated that once they issued the licence, they could no longer monitor the companies’ transactions and discovered anomalies when it was too late.
He assured that they were making a follow up on the matter to ensure the funds were recovered.
Senator Tony Sibandze, however, stated that this was not the first time such an incident occurred, meaning there was someone sleeping on the job.
“Let us not fool ourselves as this is not the first incident. Who is failing to do their job and is failing Emaswati? FSRA is mandated by law to ensure this does not happen,” he said.
Senate President, Lindiwe Dlamini, said it was fruitless to point fingers once the funds were gone but insisted on the need to enlighten the public to be more careful about such investments in future.
“We need to focus on teaching the nation to be careful and know that if it is too good to be true, it is best to stay away from such investments,” she said.
The Finance Minister, Neal Rijkenberg, concurred with the president and stated that FSRA was monitoring Ecsponent but when they discovered the anomalies, it was already too late.
The senate president and the minister emphasised on the need to educate the nation about such investments to avoid similar situations in future.
The senate president questioned what FSRA and the Central Bank of Eswatini (CBE) were doing to recover the funds. Senator Sylvia Mthethwa wanted to know how the nation could be capacitated and sensitised about such investment schemes to avoid losing their money.
She enquired if the National Payment Systems Bill would prevent the loss of funds through investment and pyramid schemes.
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