FOUNDERS INVESTED E700 IN DEFUNCT ECSPONENT

MBABANE – It has since emerged that the now defunct Ecsponent Eswatini was started with a meagre E700 by the seven initial founders in 2013, but managed to allegedly siphon E340 million from investors.

Of these founders, four of them were emaSwati and the remaining three were South Africa-based companies under a parent company known as Escalator Capital from Pretoria. The emaSwati founders owned 15 per cent, while the SA-based entity had a stake of 85 per cent in Ecsponent Eswatini. The names of the emaSwati founders are known to this publication and will be revealed at a later stage. These are part of the allegations contained in the documentation that was shared to the about 1 500 investors, who invested into Ecsponent Eswatini since 2013. The documentation was shared by the new management team of the company, which has now been rebranded to ESW Investment Group.

Invested

The 1 500 emaSwati lost a combined amount of about E340 million after Ecsponent Eswatini went under. The money is believed to have been invested, utilised and lost in South Africa.
After the name change to ESW Eswatini, the management team has since engaged the investors in groups of three, to share whatever information they have been able to gather regarding the now defunct Ecsponent and propose a way forward. The meetings were held at Esibayeni Lodge in Matsapha from Friday morning. It was during these meetings that the investors were informed that the investment company, Ecsponent Eswatini, may not have had good intentions from the onset.

Salvage

George Manyere, one of the shareholders at ESW, informed the investors that from the documentation he managed to salvage regarding the operations of Ecsponent, he found that the initial founders of the company only invested E700. “So from 2014, the company that was selling you various investment products with a promised investment return of 15 per cent, was only started with E700. This essentially meant that they would take your money and invest it elsewhere to get the promised 15 per cent return. The problem is how can you give E1 million to someone who started the business with E700 and in this case, they got a whopping E340 million.

That is where part of the problem was in this whole situation. Also, with the money that you had invested into Ecsoponent, the company would loan it out to its other group companies. So the question is, why would you invest in someone who will take your money and give it to his children and cousins? This is exactly what Ecsponent was doing,” he shared with the investors during their general meeting. This submission had many of the investors murmuring, with Manyere further explaining that all the E340 million that was invested by emaSwati found its way to South Africa and was lost or used there. He explained that part of the money was loaned to a South Africa company known as VSS, which it never repaid. VSS was later placed under liquidation a couple of years back.

“When we took over (and changed Ecsponent to ESW), we removed VSS from liquidation and instituted a forensic investigation. Following that process, we took the report to the High Court in SA, which ruled in our favour. A retired judge was later appointed to set a commission of inquiry regarding the operations of the company which was loaned the money,” Manyere explained.

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