Malawian-born businessman Simbi Phiri, who is based in South Africa, has realised a major victory in Botswana’s Lobatse High Court, which ordered the release of his R24 million that was frozen.
Since April last year, Phiri had been under investigation by Botswana’s anticorruption unit, the Directorate on Corruption and Economic Crime (DCEC), which falls under the director of public prosecutions.
The DCEC obtained a restraining order that froze eight Stanbic Bank accounts belonging to Phiri and his businesses.
In his ruling this week to unfreeze the accounts, Lobatse High Court Judge Michael Leburu said the DCEC’s investigation was “half-hearted” and “lopsided” because it had not interviewed Phiri since starting the probe.
“It is not in the interest of justice that the applicant’s [Phiri’s] funds should be restrained for an indefinite period, merely because of ongoing and indeterminate investigations,” he said.
“The first respondent [director of public prosecutions] has failed to take the court into its confidence by explaining how far the investigation process has gone and any difficulties encountered,” he ruled.
DCEC claimed it wanted to use the funds as an exhibit after its probe had been completed. Since then, a tug-of-war has ensued in Botswana’s courts, with Phiri seeking an order to release his money and the DCEC appealing every judgment.
Phiri owns Khato Civils, a civil engineering company that was awarded a contract by the department of water affairs and sanitation to deliver a R500 million presidential water project in Limpopo’s Mopani district. This project has since escalated to more than R2.2 billion.
The company has also been awarded a $500 million (R6.4 billion) water contract in Malawi.
When the probe started, Phiri had invested R40 million into establishing Khato Civils’ Botswana subsidiary and was bidding for a water contract worth 7 billion pula (R9 billion).
The problem started when Phiri under-declared cash at the border post. He legally applied for the cash at the SA Reserve Bank and intended to use it to establish the Khato Civils branch.
DCEC decided to investigate Phiri after he deposited $886 000 (about R11.4 million) in cash from South Africa into the Stanbic Bank account of Khato Civils.
The directorate alleged that Phiri did not declare $86 000 at the border gate. It also alleged that Phiri entered Botswana on July 26 2015 and declared $300 000, but deposited $500 000 in the bank.
Phiri conceded he under-declared because he was unaware that his wife had added extra cash. He said he carried the cash, in foreign currency, to deposit directly, as it would be converted into pula and lose value had he transferred it.
Leburu noted that the DCEC initially said Phiri’s funds were the proceeds of crime and money laundering, but later changed its story, saying the money was for travel purposes.
“The first respondent has submitted that Phiri should have returned the unused funds to South Africa and not used same for any other purpose. This may be an issue for the SA Reserve Bank and Phiri. The interest of such an authoriser of fund usage has not been canvassed herein,” the judge said.
Phiri said he had learnt a lesson to rather use foreign direct investment instead of applying to the central bank.
“It was disheartening when they said the money was the proceeds of crime. That was prosperous. The DCEC wanted to stop us from working in Botswana and was used by our competitors and those family members of the DCEC who wanted a stake in my company.” (By Sizwe Sama Yende, News24). For more read http://www.fin24.com/Economy/Africa/court-frees-malawian-tycoons-millions-20170908