THE legal battle over the ownership of the liquidated textile giant, Presitex Enterprise, has taken a new twist. The newly appointed liquidator, Kenneth Hlasa, is now challenging the legitimacy of the debts that led to the company's liquidation in September 2023, calling them a hoax.
Mr Hlasa claims there is no evidence that Presitex, a subsidiary of CGM Group, owed its supposed supplier from the United Arab Emirates, Nazimada Textiles FZE, the sum of USD$2 242 619 (M39 798 413.82).
According to him, the documents in his possession show that Presitex had fully paid for the raw materials before receiving them and that Nazimada had acknowledged receipt of full payment prior to shipping the goods.
Adding to the intrigue, the owner of Nazimada, Sharmala Roya, was also Presitex's Finance and Administration Manager at the time of the alleged transactions. Mr Hlasa finds it perplexing that Ms Roya was representing both Presitex and Nazimada in the same transactions, which he labels as a clear conflict of interest.
These assertions are made in Mr Hlasa's 19 July 2024 court papers, wherein he is seeking M1.5 million from Nazimada as security for litigation costs in the ongoing legal battle whereby the original owners of Presitex are fighting to reverse the September 2023 liquidation of their company, which they claim occurred without their knowledge.
Shareholders
The real shareholders of Presitex, Solandra Incorporated and Ci-ta Chang, who own 99% and 1% respectively of Presitex's parent company, CGM, only became aware of their subsidiary's "insolvency" when the Directorate on Corruption and Economic Offences (DCEO) began investigating fraud at the textile company.
The shareholders and the DCEO subsequently petitioned the Commercial Division of the High Court to rescind the liquidation order. However, Justice Mokhesi ordered security costs of M800 000, M500 000, and M500 000 from the applicants, Solandra, Ms Chang, and the DCEO respectively, before considering the rescission application. This followed a challenge by the previous liquidators on a technicality, resulting in a total required payment of M1.8 million in security costs before the application could proceed.
Nazimada Textile FZE had successfully petitioned the High Court in Maseru to liquidate Presitex after Ms Roya listed it as one of Presitex's "suppliers", claiming that Presitex owed Nazimada USD$2 242 619. Justice Mokhesi granted the liquidation application, unaware that he had been misled by fabricated "facts".
At the time, the real shareholders were already embroiled in a battle to regain control of their company after Madhav Vasant Dalvi, a former director and CEO, fraudulently transferred their shares to himself. On 19 October 2022, Dalvi fraudulently transferred 999 of the 1,000 CGM and Presitex issued shares to himself. Solandra Inc. successfully rescinded this transfer on 5 June 2023 and reported the matter to the DCEO in July 2023.
Dalvi had allegedly created shell companies involving his wife, Sushama Madhav Dalvi, son Chaitanya Madhav Dalvi, Ms Roya, CGM employee Asitha Medawewa, Presitex Manager Jitech John Babu, and Presitex employees Tseko Alphonce Bohloa and 'Mathabo Klass, using them as conduits to defraud CGM of nearly M1 billion over the years.
The DCEO has since uncovered how these shell companies were used in a money laundering, corruption, and fraud scheme involving nearly M1 billion, by being fraudulently listed as "suppliers" of raw materials to CGM. In reality, they were mere "brokers" to justify payments to them.
The individuals mentioned--except Dalvi, his wife, and son--have been charged in the Maseru Magistrates Court on 15 May 2024. Dalvi and his family members are now fugitives, having fled Lesotho. Those charged were released on M10,000 bail and M100,000 surety each by Chief Magistrate 'Matankiso Nthunya.
Liquidation
Prominent lawyer, Advocate Letuka Molati, had petitioned the High Court on behalf of Nazimada Textiles to have Presitex liquidated. According to section 6(2) of the Legal Practitioners Act 1983, an advocate must be instructed by an attorney to represent clients in court.
In August last year, Adv Molati allegedly claimed to be instructed by Attorney Machaduka Wilson Mukhawana to file the application. However, Mr Mukhawana, in an affidavit filed in support of the shareholders' rescission application in November 2023, denied any involvement with Adv Molati.
"I was made aware that there is an application made by a company called Nazimada Textiles FZE against Presitex Enterprises -- CCA/0072/2023. In this case, I appear to be the applicant's (Nazimada) attorney. I am aware that the affidavit has been deposed to by an individual called Krishna Baraiya. I am also aware that pursuant to these, the final order of liquidation was granted against Presitex Enterprises.
"I wish to inform the court that I am not the instructing attorney of Nazimada Textiles FZE, I do not know Nazimada Textiles FZE, and have never at any given point in time met with its officials. I do not know a person called Krishna Baraiya, I have never drawn and prepared the affidavits and notice of motion in liquidation, and I have not signed any of the papers. The signatures on all the papers are not mine. The case was fraudulently presented before the court as if it were my case. I have not instructed Adv Molati to appear in this court. I have not received any payment from Nazimada Textiles FZE," Mr Mukhawana said.
However, Mr Mukhawana withdrew the affidavit in April 2024, citing professional reasons. Nonetheless, this was not the first time Mr Mukhawana claimed Adv Molati had forged his signature.
Liquidators
Presitex's previous liquidators, Moroesi Tau Thabane and Paul Mosoeu, who had been appointed by the Master of the High Court after Nazimada obtained the liquidation order, stepped down in May 2024 after the DCEO charged them with fraud in relation to the Presitex liquidation.
Mr Hlasa, who replaced Advocates Tau Thabane and Mosoeu as the new liquidator, filed an application on 3 July 2024, informing Justice Mokhesi, who sits in the Commercial Division of the High Court, that he was abandoning the M1.8 million security costs order.
He subsequently filed another application demanding that Nazimada pay M1.5 million as security for litigation costs.
"It is common cause that the sixth respondent (Presitex) has at all material times been managed by a sole director, Dalvi Madhav Vassant. Both Mr Dalvi and Ms Roya have been the face and representatives of the sixth respondent ... with authority to enter into agreements. They, in violation of their fiduciary duties and in conflict of interest, concluded a business arrangement to the prejudice of the sixth respondent. It is admitted that Ms Roya is a former employee of the sixth respondent and she is also a shareholder and director of the applicant (Nazimada).
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"The company (Nazimada) is a fugitive from justice. Its sole director (Roya) has bee charged criminally together with this company. She has since disappeared from Lesotho and is a subject on the run. There is no one who represents the company in Lesotho. A fugitive cannot be heard before any court in Lesotho.
"There is proof that indeed the debts have all been paid in full. This is discernible from every letter of indemnity attached in support of every claim. There is a serious doubt as to the existence of this debt and as such, that kind of debt cannot be used as security for costs. There is no written agreement between the applicant and the sixth respondent. It seems the engagement, if any, was verbal," Mr Hlasa states.
However, a Nazimada representative based in India, Krishina Baraiya, is adamant that Presitex owes Nazimada.
"The applicant supplied and delivered fabric and other material to the value set out (USD$2 242 619.79). Presitex has been our trading partner for the longest possible time. We have always supplied them with goods on credit, after we discovered that they were a reputable company. For all the years that we have been dealing with them, they have not defaulted," Ms Baraiya states in her affidavit.
This matter is pending before Justice Mokhesi and is awaiting a hearing date.
