EX-SENIOR HMCS OFFICIAL IMPLICATED IN E10 MILLION ASIHLUMISANE FRAUD

MANZINI – A former senior official of His Majesty’s Correctional Services (HMCS) is allegedly involved in a purported E10 million fraud at the department’s co-operative.

As such, members of Asihlumisane Savings and Credit Co-operative Society have taken a resolution that an internal investigation  be launched to get to the bottom of the matter. Asihlumisane Savings and Credit Co-operative Society was established in 1991, by the then commissioner of HMCS and it registered with the Financial Services Regulatory Authority (FSRA). Its offices are housed at the HMCS College in Matsapha.

According a source, who is well-placed in the Correctional Services workers’ co-operative, there were claims which were making the rounds within and outside the department that the former senior official in question allegedly took about E10 million from the society about a decade ago. He said the allegations were to the effect that he (ex-senior official) supposedly wanted to invest the money and the promise was that he would repay it with the proceeds of the investment. The source alleged that the claims were to the effect that the former official supposedly made a deal with the executive committee at the that time, as the alleged transaction happened off the books. “This is because the transaction does not appear in the co-operative’s books and was never mentioned in any of their meetings, including annual general meetings (AGMs), where audited financials are discussed at length,” the source said.

In that regard, he said it was not only the former senior official who was at fault, but the executive committee members at that time and if found guilty, action should be taken against them. He said as per the alleged plan, the ex-senior official invested the money, but he purportedly did not repay it from the proceeds of the investment. He informed the executive members at the time that he would purchase certain equipment and rent it out to generate profit. It was understood that the money derived from renting out the property would be used to repay the E10 million to the co-operative. The source alleged that the investment had been generating money for the past decade but it was not being remitted to the co-operative.

Rank

As such, the source said one of the members of the co-operative, who is a senior official at HMCS (both by rank and position), officially raised the matter during their special general meeting, which was held at the correctional college in Matsapha about three weeks ago. The source said he was aware of their principle that issues which were discussed in such meetings should remain confidential among the members until an AGM. However, he said after reading an article in our sister publication - Times  Sunday, where it was reported that the Accountant General (AG) Timothy Matsebula’s compliance audit report pointed out that the Public Service Pensions Fund (PSPF) had a deficit of E10 billion, he was so concerned about their savings, both in the society and pensions fund. As such, he said he found it worth it to expose the matter so that action could be taken to address it.

He said when the official raised the matter during their special meeting, he highlighted that the stories they heard out there about their monies which were allegedly taken off the books and not repaid for such a long time, did not sit well with them. He said the executive committee, especially the chairman, acknowledged that they had also heard about the matter.
Thereafter, the concerned official suggested that since they were discussing a budget, could they also try to squeeze it in so that it could accommodate a forensic audit, which needed to be carried out to bring clarity as to what happened because they were concerned about the safety of their savings.

Investigated

Moreover, the source said the meeting agreed that the matter should be investigated internally first before external auditors were engaged. Meanwhile, Asihlumisane Savings and Credit Co-operative Society Board of Directors Chairman Thamsanqa Phakathi confirmed that on Saturday April 23, 2022, they held a special general meeting and the membership, through a resolution, tasked the co-operative’ Supervisory Committee (Internal Auditors) to conduct primary investigations into  a certain allegation that was raised in the meeting and report back to them. He said the supervisory committee was currently hard at work and once they were done, they would deliver their detailed report directly to the members. In fact, he said the resolution was that it would be the findings of the internal report that would determine if there was a prima facie case to warrant the co-operative to engage a forensic auditor.

On the other hand, the ex-senior official said he could not comment on issues that touched on the department because he had left the organisation. He referred this publication to the office of the commissioner general. He said it was the incumbent commissioner general who had the authority to comment on issues about the department.

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