Africa-Press – Lesotho. THE Directorate of Corruption and Economic Offences (DCEO) has been entangled in a massive rot that casts serious doubt on its ability and commitment to fight corruption.
A forensic investigation has revealed how the DCEO could have aided grand corruption, money laundering and fraud, the very crimes it is supposed to fight.
The investigation conducted by PricewaterhouseCoopers (PWC), an international accounting firm, shows how the DCEO violated internal regulations and national laws when it hired a local accounting firm to be the curator of Victoria Hotel between 2020 and 2021.
It exposes how the curator, Matsobane Putsoa, the partner at M Putsoa & Associates, and his friends collected hundreds of thousands of maloti in irregular payments.
Putsoa has denied all the allegations in the report he said he was seeing for the first time when thepost contacted him for a comment (See his full response below).
The report claims that instead of preserving the hotel’s assets the curator funneled thousands of Maluti to bank accounts of friends and their companies under dubious circumstances.
Putsoa is alleged to have rewarded himself with hefty fees of just over half a million maloti that forensic investigators say were made without the approval of the DCEO and the Master of the High Court as per regulations.
He also allegedly hired his own company to provide cleaning services at the hotel. The DCEO appears to have just watched as the curator and his friends ransacked the company whose affairs they were supposed to preserve.
But apart from inaction at least one senior DCEO official, who was instrumental in the dubious appointment of the curator, allegedly got in on the action to benefit from the rot by allocating himself a room as well as eating and drinking at the hotel free.
He allegedly enjoyed those freebies with his friends for nearly a year, denying the hotel the income it needed to keep its doors open. The forensic report also reveals that the DCEO, as an institution, even benefited from the graft when the curator allowed it to host a Christmas party at the hotel, free.
This alleged sleaze happened under the watch of Mahlomola Manyokole, the former DCEO boss now fighting corruption charges in connection with the Victoria Hotel saga. He is charged together with Putsoa, the curator that the prosecution says was at the centre of the looting spree at the hotel company.
Also charged is Peter Matekane, the suspended head of the DCEO’s chief Asset Recovery Litigation Officer, who seems to have played a critical role in the unlawful appointment of M Putsoa & Associates.
Instead of playing an oversight role Matekane turned a blind eye at the curator’s shenanigans. This, the forensic report hints, could be because he had used his position at the DCEO to engineer the illegal appointment of the curator.
Matekane could not be reached for a comment at the time of going to press. The report shows that M Pustoa’s appointment came through a middleman who was Ikhetheleng Matabane, the financial director of Naleli Funeral Planners who was shot dead in February.
Matekane and Matabane, who was also facing fraud and corruption charges, were close friends and worked together at Naleli Funeral Planners where they were both shareholders and senior officers.
Also in the mix and facing charges is Advocate Relebohile Lesholu, a lawyer whose résumé at the time of the curatorship included a stint as an intern and volunteer at the DCEO.
Advocate Lesholu, who was allegedly close to Matekane because of a relationship nurtured during his time at the DCEO, was paid tens of thousands for advising M Putsoa during the curatorship.
The report says him, Matekane and Matabane were allowed to use rooms at Victoria Hotel free. They allegedly ate and drank free while also allowing other people to use the rooms they had illegally allocated themselves.
Advocate Lesholu said he could not comment because the matter is still in court. The alleged graft at Victoria Hotel is a complex affair involving several connected companies and friends who appear to have turned the troubled company that desperately required their help into a feeding trough.
It starts at the DCEO, followed by months of corruption before the players found themselves in the High Court’s dock. The four main players protest their innocence and are strenuously defending themselves in court.
Much of the evidence against the suspects is yet to be ventilated because their trial has been stuttering and Advocate Lesholu has been pushing for discharge arguing that the prosecution has failed to prove the charges against him.
Yet the PWC report paints a picture of massive corruption, grand looting and abuse of office. As the report shows, the corruption scheme started right at the appointment of M Putsoa & Associates as the curator.
M Putsoa& Associates came into the picture after the DCEO investigated Sobita Investment, the company that held the government contract to manage Victoria Hotel.
Sobita was owned by the late businessman Tumo Tlelai. That investigation pointed to corruption and money laundering allegedly committed by Sobita during the management of Victoria Hotel.
After the investigation the DCEO decided to hire a curator to help with the recovery and preservation of assets it suspected were being used for corruption and money laundering.
The assets included Victoria Hotel, its properties and bank accounts. Sobita’s bank accounts were also part of the preservation order granted by the High Court in June 2020.
The corruption appears to have started with the hiring of M Putsoa & Associates. It doesn’t appear that the DCEO considered other accounting firms for the job.
The forensic investigation report indicates that Matekane appeared to have decided that the contract would be handed to M Putsoa & Associates. Mathias Tšele, the DCEO’s procurement officer, told the investigators that his office was not involved in the hiring of M Putsoa & Associates.
He said his office was “not involved in such engagement nor have any idea about such engagement”. Veronica Matiea, the Master of the High Court, also told the PWC investigators that her office was not involved in the curator’s hiring and “did not issue a certificate of appointment relating to the appointment”.
Perhaps the most telling revelation about the nature of the appointment comes from Matekane’s junior, Thato Tsutsubi, who is the DCEO’s principal asset recovery and litigation officer.
Tsutsubi said she asked Matekane about the modalities of managing Victoria Hotel because the DCEO “had never dealt with property of such magnitude”. There were similar discussions with Manyokole and the principal investigator, Thabiso Thibeli.
Tsutsubi said Matekane told her that he knew Putsoa, the former accountant general. “He stated that he knew him very well and he had proper credentials and experience to administer the property and as such he would request that he be appointed as curator,” said Tsutsubi in a statement to the investigators.
Manyokole then appointed M Putsoa & Associates on June 10, 2020. So when did Matabane come into the picture? The answer is in a statement Putsoa gave to the investigators.
Putsoa said in mid-2020 Matabane told him about an “opportunity for a job or service that the DCEO requires”. That conversation happened before the High Court had granted the preservation order allowing the DCEO to take over Victoria Hotel’s affairs.
Putsoa said he received the appointment letter shortly after Matabane submitted the ‘business profile’. Putsoa doesn’t, however, say if that business profile came from him or was created by Matabane.
He said it is Matabane who handed him the appointment letter from the DCEO. Curiously, Putsoa told the investigators that he never discussed his engagement and the terms and conditions of his appointment with the DCEO.
He said “Matabane was the one handling the contract/arrangement as the Project Manager”. How Matabane inserted himself as the ‘project manager’ is not clear.
But it is important to remember that Matekane, who was instrumental in the awarding of the contract, was close friends and business partner with Matabane.
The report says Matekane introduced Matabane to the Victoria Hotel staff as a partner in M Putsoa & Associates. This is despite records showing that Putsoa was the only partner in M Putsoa & Associates.
Apart from the questionable nature of the appointment, there was another red flag that would have stopped the DCEO from M Putsoa & Associates. A simple check would have revealed that Putsoa and his firm had been deregistered by the Lesotho Institute of Accountants (LIA) in 2016 after failing to pay membership fees.
That meant they were not allowed to work as accountants, auditors or curators in Lesotho. The DCEO didn’t verify Putsoa’s membership with the LIA before the appointment.
The investigation report says the DCEO only requested the vetting of accounting firms on July 22, 2020, more than a month after Putsoa started working.
A day after the DCEO’s request, Putsoa emailed Monyaola Mosoloane, the LIA chief executive, requesting a statement on his outstanding membership fees.
Mosoloane sent Putsoa a statement showing M46 800 in arrears. They agreed that the fees would be cleared in six months and Putsoa paid M11 532 the next day.
But even after paying part of the arrears and being re-registered, Putsoa seems to have already committed a crime by accepting the appointment as a curator while he was still deregistered.
Under the Accountants Act of 1977 a person who is not registered with the LIA shall not act, practice or hold himself out as a public accountant, tax adviser or auditor.
Violation of the act is punishable by a fine or imprisonment. The report says it is “evident” that Putsoa and his firm were not registered when they were hired as curator.
Putsoa re-registered as an accountant but there is another potential problem with the way he paid the arrears at the LIA. The M11 532 did not come from his account but from a trust opened for Victoria Hotel’s curatorship.
In other words, Putsoa was using the funds of a company he was managing to pay his debt. That is akin to an auditor paying their LIA membership fees using their client’s money.
“This was a personal expense of Mr Putsoa and should not have been paid from the Victoria Hotel Curator Bonis account,” the forensic report says.
A DCEO investigation finds that Sobita, the company managing Victoria Hotel, could have been involved in corruption. The DCEO decides to put the hotel under curatorship.
Peter Matekane, the DCEO’s chief Asset Recovery Litigation officer, recommends Putsoa of M Putsoa & Associates to be the curator. Putsoa heard of the opportunity from Matabane who was Matekane’s friend, colleague and business partner at Naleli Funeral Services.
Manyokole, the then director general of DCEO, appoints Putsoa but the appointment letter is delivered by Matabane. This was despite the fact that neither Putsoa nor his company was registered with the Lesotho Institute of Accountants (LIA).
Putsoa never meets the DCEO to discuss the terms and conditions of the appointment. Matabane was handling everything as the ‘project manager’. Matekane introduces Matabane as a partner in M Putsoa & Associates to the Victoria Hotel staff.
This was not true because Putsoa was the only partner in M Putsoa & Associates. After taking control of the hotel Putsoa starts paying himself and his friends without submitting monthly reports to the DCEO and the Master of the High Court.
When the DCEO asked the LIA to vet accounting firms, Putsoa swiftly moved to update his membership which had been suspended in 2016. He used Victoria Hotel’s curatorship account to pay M11 532 towards his membership arrears and he is reregistered.
This however doesn’t nullify the fact that he had been hired without the LIA registration in the first place. Putsoa pays himself M539 325 in seven transactions.
He also hires Lefielo, the company he jointly owns with Matabane, and pays it M42 305. Matabane is paid M177 770 through Mokorotlo Communications in three transactions.
The management of Victoria Hotel says it doesn’t know the services Matabane’s company provided. Putsoa paid M208 000 to The Deck Restaurant, a company in which Matabane had shares.
The conflict of interest doesn’t appear to have been declared. Nor is there any indication of whether The Deck was hired through a competitive process.
The Deck Restaurant was first hired to provide catering services when Victoria Hotel hosted Naleli Funeral Services, a company in which Matekane and Matabane had shareholding.
The two, who are close friends, were colleagues at Naleli. Advocate Lesholu, who was close to Matekane and had spent some time as an intern at the DCEO, is paid M162 700 for providing legal services to M Putsoa & Associates.
The nature of the legal services is not known. The DCEO hosts a Christmas Party at Victoria Hotel. Matekane, Matabane and Lesholu allocate themselves rooms at the hotel.
They don’t pay their bills and sometimes allow other people to use the rooms. This prejudices the hotel of income it desperately needs. Putsoa doesn’t stop them from using the rooms.
Matekane and Matabane allegedly wine and dine at the hotel without paying. Manyokole, Matekane, Matabane, Putsoa and Lesholu have been charged with fraud and corruption in connection with the Victoria Hotel curatorship.
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