Swazi Observer

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‘RECOVER E340 MILLION’

By SIFISO DLAMINI | 2024-11-29

MINISTER of Finance Neal Rijkenberg has been given a three- month ultimatum to recover the E340 million invested by Emaswati with Ecsponent Eswatini.

The minister was instructed by members of parliament (MPs) in the House of Assembly, following the debate and adoption of the seven-member select committee mandated to scrutinise and analyse the Cliffe Dekker Hofmeyr Inc (CDH) forensic investigation report, yesterday.

After a lengthy debate which spanned over two days where 27 MPs made their submissions, the House resolved to adopt the report with an amendment directing the minister to recover the funds within three months.

Following what was presented as an extensive stakeholder engagement exercise, the select committee chaired by Deputy Speaker Madala Mhlanga presented the report with two choices on the pathway of the committee’s work, which the investors would have to pronounce themselves and that could be overlooked.

The first option was for the investors to decide whether the legal processes involving lawsuits and counter lawsuits, should be allowed to proceed no matter how long it took, to bring this matter to finality.

The second option was that the House assigned the minister of finance, working with the Central Bank of Eswatini (CBE) Governor Dr. Phil Mnisi to set in motion a model that would get all the two major stakeholder companies on the matter involving George Manyere and Dave van Nierkerk, the Financial Services Regulatory Authority (FSRA) and others, to at least, pay back the principal amounts paid by the investors into Ecsponent Eswatini.

The committee further recommended that issues of accrual of interest due to the investors may be handled separately.

The committee held the view that the two scenarios could run parallel to each other.
The committee also reported that regrettably, the House could choose one scenario over the other because private funding was different from public as the former was used on the investments.

It also recommended that the minister responsible, working in collaboration with the governor, should consult with the investors on their preferred choice.

According to the report, from 2014 when the initial investments were made, to about 2020, most of the returns promised in the prospectus were delivered.

Around 2019, there was a month where investors received half the usual monthly dividends and this period coincided with the collapse of Ecsponent South Africa.

Queries were made by the investors to both the local office as well as the South African offices and assurances were given that what was happening in SA would not affect the local operations.

Dividents
However, from 2020 to the ultimate end of the payment of dividends in December 2021, investors went through a very turbulent period of uncertainty and anxiety.

This prompted parliament intervention where the House of Assembly resolved that the minister of finance through the Central Bank of Eswatini should institute a forensic investigation.

This led to the appointment of CDH who produced a report that was met with resistance as allegedly crucial information was omitted, resulting in the investors yet again seeking Parliament intervention.

In light of the renewed concerns from the investors, on October 17, Lamgabhi MP Sicelo Jele moved a motion for adjournment of the debate of the CDH report and was seconded by Nhlambeni MP Manzi Zwane. Furthermore, the same motion moved for the appointment of a select committee made of seven members.

The select committee tabled their report on Monday.
During the two-day debate, a majority of the legislators felt that government through FSRA, which was mandated to regulate non-banking institutions, had failed the investors by neglecting to put in place preventive measures to avoid the loss of hundreds of millions of Emaswati’s hard earned money, many of which were pensioners.

They also blamed the CBE which was constitutionally mandated to monitor and regulate banking institutions for failure to prevent the transfer of the funds through the First National Bank to South African banks, resulting in the loss of the funds.

They insisted that government should repay the funds and recover the funds from FSRA, Manyere and van Niekerk as per the committee’s recommendations.

Some of the legislators who insisted that government should compensate the investors included Ngudzeni MP Charles Ndlovu, Ntfonjeni MP Raymond Dlamini, Manzini Region MP Thandeka Mavuso, Lomahasha MP Zanele Mashaba, Kumethula MP Jabulani Simelane and Mhlambanyatsi MP Bonginkosi Dlamini, to name a few.

They all shared that what happened to the unsuspecting investors was painful and it was up to government to ensure that they were compensated.

They argued that FSRA and the CBE had the funds to pay the investors.
However, their enthusiasm was deflated following advice from the Attorney General Sifiso Khumalo who responded to a point of clarification moved by the committee deputy chairman, Lobamba Lomdzala MP Marwick Khumalo.

MP Khumalo said he was in agreement with the MPs in that the investors had to be compensated. He, however, said they should be careful not to act outside their mandate by resolving for a budgetary fiscus for government to compensate the investors.

In response, the AG said the answer was an emphatic no as parliament could not resolve for government to pay since these were not public funds.

Some of the legislators who debated following the AG’s advice suggested that they should find other means to ensure that the investors were compensated.

At the end of the debate, the MPs resolved to adopt the report and amended the resolution to put the time frame of three months for the minister to facilitate compensation of the investors.

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