Ban on car clearing agent lifted

Ban on car clearing agent lifted

MASERU – THE government has reversed the decision to ban BeForward, a popular Japanese company, from exporting cars to Lesotho.
The government banned imports from BeForward in November last year following allegations that the company had failed to deliver dozens of cars ordered by Basotho.

This started after Flying King, the Lesotho clearing agency which worked with BeForward, failed to deliver several cars to customers. Flying King is now under liquidation due to what one of the shareholders describes “as gross mismanagement and fraud by fellow shareholders and directors who were managing its affairs”.

Second-hand car dealers, clearing agencies and tax operators have been fighting to get the Ministry of Trade and Industry to lift the ban for the past eight months.
A breakthrough came after the associations met principal secretary, Dr Tlhopheho Sefali, two weeks ago.

“Having consulted all the relevant stakeholders, concerned parties and based on the evaluation of the evidence, MTI (Ministry of Trade and Industry) has discovered that BeForward Japan has honoured all its international trade terms,” Dr Sefali said in a May 26 letter.
“The company shipped all the vehicles bought from it. Based on the foregoing it was resolved to uplift the import on BeForward imports.”

The decision is a relief to Basotho and car dealers who were struggling to get cheap cars from other Japanese companies. BeForward is comparatively cheaper and has some of the shortest delivery times.
It will also help clearing agencies whose business had taken a huge knock during the ban.

Last month, car dealers told thepost that prices had increased by as much as 30 percent during the ban.
Kuben Pillay, a South African businessman who owns 51 percent of Flying King and whose business had also been affected by the ban, said he welcomes the government’s decision “but it is only the starting point”.
He said the government and the Lesotho Revenue Authority (LRA) should investigate how Flying King’s local shareholders and directors allegedly fleeced the company and dodged tax.

“Now the focus should be on a thorough investigation into the fraud and tax evasion that happened at Flying King,” Pillay said, adding that he has evidence that “invoices were falsified and some cars were illegally registered in South Africa”.

He alleged that all this happened when Joel Mohale, the local shareholder who was the managing director, was in charge. Apart from allegations of fraud and tax evasion, Pillay also accused Mohale of hastening Flying King’s collapse by using its money to start HMR Transport & Logistics which is also a clearing agency.

Mohale started HMR with Donald Monethi, another shareholder.
Mohale has previously denied the allegations of tax evasion and fraud. Instead, he says Pillay is out to damage his reputation because their business relations have soured.

Pillay’s allegations however appear to be supported by liquidator Advocate Neil Fraser’s report whose preliminary findings appear to indicate that the company could have been looted until it failed to meet its obligations to customers, suppliers and the LRA.
Released in April, the report raised concerns about payments to an insurance company, Wimpy, school fees, Good Night B&B and Sun 1 Durban. There were also mobile banking transfers and cash withdrawals which he said appeared to be for personal use and not related to Flying King’s business.

The report also said Flying King was not paying tax.
This is reflected in the M946 825 claim LRA has filed with the liquidator. Africa Vehicle Clearing Specialist (Avecs), Pillay’s company, has submitted a M1 million for unpaid services.

Pillay claims M857 000 which he says was due to him in profits as a shareholder.
Six other creditors claimed a combined M420 000 for undelivered vehicles and outstanding rentals. This brings the total amount of claims to just over M3 million.

Staff Reporter

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