Lesotho: Majoro to Investigate Financial Intelligence Unit 'Fraud'

21 January 2020

FINANCE Minister Moeketsi Majoro says he will soon appoint "a third party" to investigate fraud and other allegations that have been raised against senior officials of the Financial Intelligence Unit (FIU).

Dr Majoro also promised action should the allegations of financial impropriety turn out to be true.

He said this in a recent interview with the Lesotho Times in the wake of recent revelations by the police that they are investigating senior FIU officers including FIU director, Palesa Khabele, for fraud.

A fortnight ago, the Principal Secretary in the Ministry of Finance, Motena Tšolo, told this publication that she engaged the police to investigate the FIU upon realising that the laws governing the institution barred her from auditing its books. Ms Tsolo did not say which laws barred her from auditing the FIU.

FIU director Palesa Khabele and eight other officers of the national anti-corruption entity are being investigated by police for fraud.

This after suspicions that they could have concealed evidence of money obtained through fraudulent means being paid into their insurance accounts.

"As the chief accounting officer in the Ministry of Finance I am aware of the situation within the FIU and I am working to address it," Ms Tsolo said.

"I have even tried in vain to conduct an internal audit because the laws governing the institution bar me from carrying out any investigations. It was then that I engaged the police who are now investigating a case of fraud." She however, did not give details of the suspected fraud or its cost in monetary terms.

Other FIU officers who are being investigated by the police are Liteboho Mosoeunyane, Itumeleng Monyau, Paul Mothae, 'Matau Mabitle, Tente Machite, Thikhoane Molapo, Jothame Phakisi and Mofokeng Ramakhala.

The FIU was established by the government in terms of the Money Laundering and Proceeds of Crime Act of 2008 and its mission is to become "a dynamic centre of excellence providing financial intelligence reports for combating money laundering and terrorist financing in Lesotho and internationally".

And this week, Dr Majoro told this publication that said he was fully aware of the fraud allegations against the FIU staff and he would soon appoint "a third party" to investigate the claims.

"I can confirm that allegations and counter-allegations by the staff of the Financial Intelligence Unit have been brought to my attention. The FIU is a critical and sensitive entity involved in the fight against money laundering and financing of terrorism as well as other financial crimes.

"Consequently, I am duty bound to take any allegations seriously in order to preserve the integrity of the institution. I am planning to appoint a third party expert to ascertain the veracity of these allegations and if need be to act accordingly. The FIU is a public institution and as such, it is subject to audits by the Office of the Auditor General," said Dr Majoro.

According to sources privy to the matter the FIU staffers wrote to Dr Majoro in June 2019 requesting an urgent investigation into the affairs of the FIU.

The staffers also allege other irregularities including that the FIU pays 100 percent of medical aid contributions for its staff "in breach of the Human Resources Policy (HRP) which says the FIU should pay 60 percent while staff should pay 40 percent for medical aid".

The staff also claim that more than M100 000 was spent on the procurement of computers from South Africa without following proper procedures.

"In the light of the above exposition, we urgently request your office to audit the FIU as it has never been audited since its establishment for almost 10 years in breach of laws which say the unit shall prepare annual financial statements to be audited by Auditor General at the end of the financial year," the FIU staffers state in their letter to Dr Majoro.

Should the minister go ahead with the appointment of an expert to probe the FIU, his/her investigations will run parallel to those of the police who already investigating the anti-corruption body.

The police investigations are however, allegedly being frustrated by FIU Director Ms Khabele who is said to be refusing to hand over the officers' pay slips as demanded by the police. The Lesotho Times recently saw copies of written correspondences between Assistant Commissioner of Police Beleme Lebajoa and Ms Khabele after the former requested to be furnished with pay slips of the listed FIU officers from July 2016 to April 2017.

She has since applied for a stay of execution to stop the police from accessing the officers' pay slips and instead accuses them of misusing their power by refusing to disclose information pertaining to the alleged fraud.

She also states in her affidavit that she could not furnish copies of the pay slips due to glitches in their computer systems which prevented them from retrieving the documents.

"I communicated with Detective Sergeant Moorosi (the principal investigator of the alleged fraud) on 25 September 2019 informing him that we are unable to provide the required information because we have to pay the costs of the consultant who would assist us to retrieve such information from our computers.

"I further inquired from him (Detective Sergeant Moorosi) as to what the complaint was and who specifically committed fraud. He declined to provide me with the details I requested yet I am head of a security agency responsible for combating commercial crime," Ms Khabele states in her affidavit.

She further alleged that she was denied the right to a hearing and "the police are therefore guilty of abuse of power and non-disclosure of material information because they were informed of the situation the applicant (FIU) is facing in relation to the requested information and documents in the form of pay slips".

"The court order is defective in that it infringes the rights of individuals, particularly the right to privacy. The information required affects employees listed in the letter of police dated 16 August 2019.

"The police acted unprofessionally and in a manner that seeks to compromise the institutional integrity of the applicant (FIU) by making serious allegations that it could be involved in fraud, yet they do not want to afford it an opportunity to provide them with the information in accordance with the law once its computers systems are able to retrieve such information," Ms Khabele said.

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