King Mswati looting Pension Funds, Cabinet stops investigation
JOHANNESBURG: The Swazi government has stopped a high level investigation by the Financial Services Regulatory Authority (FSRA) whose terms of reference had a potential of exposing King Mswati in the alleged looting of millions within the Public Service Pension Fund (PSPF).
The investigation was to be conducted by a South African-based company Prodogy SA (PTY) LTD and the FSRA was acting within its regulatory powers to ensure that all retirement funds, fund administrators, investment managers and anyone associated with them conduct their business in accordance with the law and principle governing the industry. But independent investigation by this Swaziland News publication uncovered that the PSPF and the Swaziland National Provident Fund (SNPF) has been captured by royalty and used to fund huge but questionable investments projects that subsequently benefits the King through the controversial Tibiyo TakaNgwane. On June 2017, the PSPF and SNPF partnered with Old Mutual to launch an R100million dairy farm project that was to benefit the King indirectly through Tibiyo TakaNgwane that holds shares at Parmalat Swaziland. Our investigations uncovered that Parmalat Swaziland, a member of the multi-billion Tibiyo TakaNgwane business empire was part of the project that was projected to produce 30% of locally consumed dairy products per annum.
These investments were allegedly influenced by among others PSPF CEO Cleopas Dlamini, a close ally of King Mswati who has been identified as a potential candidate to become the next Prime Minister and sources revealed allowing the King to have access the public funds has placed him in a better position to be appointed into the powerful political post. At SNPF, the King operates through his brother Prince Lonkhonkhela Dlamini who like the PSPF CEO, has been approving investments that subsequently benefits the King. When reached for comments, Percy Simelane, the Swazi Government Spokesperson said he cannot comment on the matter especially on the reasons behind the decision by Cabinet to stop the investigations, he referred questions to Public Service Minister Owen Nxumalo.
“Kindly call Owen Nxumalo, Minister responsible,” said the Government Spokesperson.> But Mduduzi Gina, the Secretary General of the Trade Union Congress of Swaziland (TUCOSWA) when speaking to this publication said the decision by the government to stop the investigation raised suspicion that something serious was being wrapped under the “carpet” at the Pension Fund. Gina said under normal circumstances, the office of FSRA was expected to operate independently and or without interference from the Executive arm of Government.
“We have strongly believe that the FSRA office should operate independently without interference from the Executive so that it can monitor the conduct of Pension Funds in the country. The Executive does not have powers to stop an investigation launched by that office except through a court, not merely by an announcement. Once politicians start interfering with offices tasked with monitoring pensions monies that is a serious violation of the expected autonomy that should exist especially in the administration of such institutions that should protect public funds,” said the TUCOSWA Secretary General.
Gina stressed that as workers they were totally against the decision by Cabinet to stop the investigation. “That probe must continue as we want to know what is going on there. The office of the FSRA have all the powers to conduct the investigations and if they had reasonable suspicions that a probe must be carried out, that suspicions are enough and they cannot therefore be stopped by the Executive arm of government. The decision to stop the probe will create more suspicion that government is afraid that something might come out from the probe and expose them of stealing the money” he said.
Lucky Lukhele, the Spokesperson of the Swaziland Solidarity Network (SNN) said the looting has now reached a massive scale in the country adding that it was not only the pension funds being the PSPF and SNPF that was being looted.
“It is wrong of the Swazi government and the King to then start digging money reserved for the poor, in this case, the workers. The Swaziland National Provident Fund is the money that belongs to the people, we want TUCOSWA through its representative, in this case, Gina to come clean and give a proper report on the investments of this organization. The investigation must dig investments undertaken years, we have people who retired and when they apply for their monies in these organizations they are delayed, some even died without getting a cent” he said
Minister of Public Service Owen Nxumalo mobile phone could not be reached and he did not respond to a text message sent to him seeking valid reasons behind the decision by Cabinet to stop the probe. Howeve,he was quoted by the Times of Swaziland confirming that the matter was reported to Cabinet. “Yes, the matter was discussed at Cabinet and that is all I can say” the Minister was quoted by the Times.
The Cabinet to which the Minister was referring to have all it’s Ministers appointed and controlled by King Mswati, who rules Swaziland now known the Kingdom of eSwatini as an absolute Monarch. Insiders disclosed that King Mswati has now developed huge interests in the public monies held within the PSPF and SNPF and the desire is believed to have escalated now that government has become broke.
“The King would sometimes ask for a report on how the multi-million investments are accumulating with Pension Funds especially at SNPF and it is believed that some monies are laundered from these institutions to be presented to the King,” said an insider.
When this publication tried to seek a comment from Cleopas Dlamini, the PSPF CEO, his phone rang and later it reflected a busy signal. Prince Lonkhonkhela, the brother to King Mswati and SNPF CEO could also not be reached for comments as his phone rang unanswered. But independent investigations conducted by this Swaziland News publication uncovered that even though the FSRA probe was not intentionally targeting the King most multi-million questionable transactions and investments in the country links him. As a result there were fears that the investigation conducted by a South African based company might not compromise and excludes the King in its findings thus exposing his involvement in the looting of the public funds.
It has been disclosed that over the years, CEOs of the two major Pension Funds being Prince Lonkhonkhela and Cleopas Dlamini has been frequenting the Palace to presents reports on investments undertaken by the entities and to further discuss how the King can benefit without the awareness of the public. But Prince Lonkhonkhela raised such suspicion when he presented the King with R1million sourced from the Fund as a gift for his birthday triggering international criticism.
The gift came at the time when some members of the public were complaining that they sometimes sent from pillar to post when applying for their monies within these institutions. Furthermore SNPF became one of the first major entities to invest millions at Swazi Mobile, a cell phone company with strong links to King Mswati and allegations subsequently emerged that the PSPF was also vigorously seeking to pump millions in that company. Around June 2017, Victor Gamedze, the late influential, powerful and political connected businessman allegedly facilitated a process of engaging the PSPF through Cleopas Dlamini to pump millions in the newly established cell phone company. Other entities that were engaged include Inhlonhla, the Swaziland Industrial Development Company (SIDC) and the Swaziland National Provident Fund (SNPF). Gamedze was acting on an alleged King’s order “directing all banks, investments and financial entities to assist with loans in the establishment of Swazi Mobile”. It could not be ascertained whether the PSPF eventually bowed to the political pressure and released the money without supporting documentation. But insiders disclosed that at the time ,the businessman was under pressure to raise over R500million for the company’s start-up equipment after publicly announcing it would be live as from the 1st July 2017.
The investigation stopped by Cabinet would have confirmed or cleared allegations the long standing allegations that some monies were secretly pumped in the cellphone company. But Sandile Dlamini, the FSRA Chief Executive Officer (CEO) in an affidavit confirmed that PSPF released funds to entities as loans without proper documentation or loan agreements. Dlamini based this on findings of a preliminary investigation that was conducted by the FSRA after allegations emerged that the PSPF was secretly releasing funds to entities. A preliminary investigation is a founding process of gathering facts to ascertain the need to conduct a comprehensive investigation. It is a process that seeks to gather founding information and recommendations are made based on the principle of “balance of probabilities” to pave way for the full-scale investigation whose findings and recommendations should be based on substantiated facts.
This publication gathered that the FSRA CEO’s affidavit forms part of a recently withdrawn court application whose intention was to force the PSPF to fully cooperate with the investigation based on preliminary findings that recommended more intensive investigations into certain areas.
The FSRA CEO told the court that the investigation was to determine alleged irregularities in the manner in which assets were acquired, invested and or disinvested on behalf of the fund and whether such acquisition, investments were undertaken in the best interest of the fund and its members. Members of the fund include teachers, nurses and other civil servants who before the latest revelations and court battle between the PSPF and FSRA had hopes that their money was safe and would be released after they reach the retirement age.
Dlamini further told the court that preliminary investigations by the FSRA uncovered that the fund granted huge loans to entities without supporting loan documents or agreements. “The respondent (PSPF) disinvested large sums of funds from local financial institutions to offshore destinations,” reads one of the findings made by FSRA. On another note, the PSPF allegedly entered into a high questionable transaction with out-going Prime Minister Dr Sibusiso Barnabas Dlamini’s company Fusini Investment (PTY) LTD. The fund bought land for R7.5million from the PM’s company previously purchased from government for R93, 120.00 less ten years later. It could not be ascertained whether the Investment Committee approved the transaction. Sandile Dlamini, the FSRA CEO confirmed in his affidavit that their preliminary investigation uncovered that some investments were undertaken without the approval of the Investment Committee.