Mohair farmers in trouble

Mohair farmers in trouble

MASERU –  JANUARY and February are supposed to be months of delight for wool and mohair farmers.
The cheques from previous year’s sale of wool and mohair will be rolling in.
With the money they plan their budget for the next twelve months.

They sustain their families, pay school fees, pay the herd boys and buy medicines for their sheep. That has always been the case until this week when BKB, a South African company that acts as their agent, ran into trouble with the law.
This week thousands of farmers were told that their payments will be delayed because the police’s Commercial Crimes Counter Unit has, through a court order frozen BKB’s local accounts as part of an investigation into suspected money-laundering and tax evasion.
BKB Limited is a middleman between local farmers and the international market. It makes its money from the commission it charges wool and mohair farmers who are members of the Lesotho Wool and Mohair Growers Association (LWMGA).

BKB has been using the account to pay LWMGA’s 37 000 members, most of whom are rural farmers.
In 2014 BKB paid M212 million to 35000 local farmers for their wool and mohair. This year the farmers were expected to get M400 million which BKB was going to pay through the account that has been frozen.

The police have been investigating BKB’s operations in Lesotho for the past few months.
On Monday last week the police wrote to the LWMGA seeking answers on several issues on the account and the association’s agreement with BKB.
The letter was written by a Senior Inspector Makharilele, the officer commanding commercial crimes counter unit.
“On the background of this exposition and in pursuit of our investigation we request you to provide us with a copy of an agreement between BKB and Lesotho Wool and Mohair Growers Association…,” said the letter.

It also requested “minutes of the meeting between LETACC Firm of Chartered Accountants, BKB, and the Lesotho Wool and Mohair Growers Association held at Mojalefa Lephole Convention Centre Boardroom Maseru on the 10th July 2017”.
LWMGA manager Lefu Lehloba said he responded to the letter two days after receiving it.

Senior Inspector Makharilele also requested information from Standard Lesotho Bank which holds BKB’s account.
In the letter Senior Inspector Makharilele said the police suspected the BKB account which was opened in 1996 could have been used for money-laundering.

He said in December 2004 a team leader in the bank informed a BKB manager that an audit had indicated some discrepancies.
Senior Inspector Makharilele said the team leader indicated that there was no certificate of incorporation, the form for the appointment of bankers was not completed and there were no passports for signatories to the account.

He then asked for what he called a compressive report on the following issues:

l How the account was opened without submission of passports?

l Why was the South African certificate of incorporation used to open the account?

l Whether the signatories to the account has residence and work permits

l Whether a tax clearance certificate was submitted when opening the account

l Whether the Know Your Client guidelines were followed

l Was the account opened in line with local requirements for opening bank accounts in Lesotho?
Lehloba told thepost most farmers “panicked because they know that without the bank account they will not be paid”.
“The account is the only means through which the farmers can get their payment after the sale of their wool and mohair,” Lehloba said.

He said most of the LWMGA’s 37 000 members are yet to receive their payments for last year’s harvest of wool and mohair.
Others, Lehloba said, have received their cheques but will not be able to cash them.

“This is a serious blow to the farmers and we are going to ask the relevant ministry to help us to fight the decision to freeze the account,” he said.
Any delays to pay the farmers will not only affect their lives but also this year’s production, he said.
BKB Manager Isak Staats told thepost last night the account had been closed at a time when they were about to pay the farmers.

“We have operated this account for 24 years. The money in that account does not belong to the BKB but the farmers. It’s not a transactional account for BKB. It’s a clearing account which means it’s meant for the farmers to access their monies,” Staats said.
“Without that account BKB cannot pay the farmers. That is how simple it is.”

Lesotho Revenue Authority public relations officer, Tšepang Mncina, said she could not comment because tax issues are confidential.
She said they are not in a position to reveal whether the LWMGA is paying tax or not.
“Such issues could only be discussed in court if there is such a need,” Mncina said.

Manyathela Kheleli, Marketing Manager at Standard Lesotho Bank who is responsible for Public Relations, Communications and Sponsorships, declined to comment on the BKB account.

“As a financial institute regulated by the Central Bank of Lesotho, there is certain information that we cannot disclose to a third party about approval of our clients,” Kheleli said. “BKB is one of our clients. We are really not in a position to share this information with a third party.”

Majara Molupe

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