Minister sucked into corporate battle

Minister sucked into corporate battle

MASERU-TRADE Minister Dr Thabiso Molapo has been accused of taking sides with a local businessman involved in a corporate battle that has spilled into the High Court.
The businessman is Joel Mohale who, in court papers, is accused of defrauding and running Flying King, a vehicle import agent, aground through reckless expenditure and fraud.

Flying King is now under liquidation at the instigation of Kuben Pillay, a South African who is Mohale’s partner in the troubled company.
But while the court dispute rages on, Molapo has entered the fray and appears to be fighting in Mohale’s corner, much to Pillay’s chagrin.
Three weeks ago, Molapo banned Beforward Lesotho, a company related to Flying King and owned by Pillay, from importing cars into Lesotho.

The Ministry of Trade said the decision was based on the fact that the company had failed to deliver cars Basotho imported from Japan.
In an interview with thepost this week Mohapi made the same accusations against the company, alleging that it was holding on to 500 cars belonging to Basotho.

Pillay denies the allegations, insisting that the minister has been misled by Mohale.
Pillay says in making that decision the minister “is taking sides in a legal dispute beyond his authority”.

“This is clear evidence that the minister has been sold a lie by Mohale. Instead of verifying the information with us, the liquidator and various court documents, he is now fighting us on Mohale’s behalf,” Pillay says.
“We have provided evidence that Mohale defrauded Flying King to enrich himself and build other companies.”

“Flying King is in liquidation because of Mohale’s unethical activities. Instead of dealing with those issues he rushes to the minister for protection and is using lies to avoid responsibility.”
In his application Pillay accused Mohale of recklessly spending the company’s money while failing to pay suppliers, deliver vehicles to customers, meet its tax obligations and settle its loans.

Pillay is also the owner of African Vehicle Clearance Specialist (Avecs), a South African company, which Flying King owes nearly M1.7 million for the clearance and transportation of vehicles clients bought from Be Forward Japan.
He says instead of paying suppliers Mohale used clients’ money to start several other companies, including HMR which is in direct competition with Flying King.
Pillay alleges that apart from pillaging Mohale was giving clients Flying King invoices that had HMR’s banking details. This, Pillay says, shows that Mohale was defrauding Flying King to build HMR.

“These are the real issues that Mohale is avoiding by running to the minister.”
Molapo told thepost this week that his decision was based on Mohale’s complaints.

“I only have one side of the story but I accept that there are always two sides to any story,” Molapo said.
“We banned BeForward Lesotho as a way to force them to explain their side of the story. They have not come to us, so the ban remains in force.”
The minister said he was not aware of the Flying King’s liquidation or the dispute between Mohale and Pillay.

“I am only concerned about the cars that have not been delivered to Basotho. I have not been briefed about the rest of what is happening.”
Pillay however says BeFoward Lesotho is a shelf company that has not sold a single car.
He said there were plans to include Mohale as a shareholder and director “when we discovered his activities in Flying King”.
He refuted the minister’s allegations that there were 500 Basotho waiting for their cars.

“The truth is that there are 18 cars being held in Durban because Mohale did not pay Avecs for their clearance and transportation to Maseru yet he took clients’ money.”
“Those cars were bought through Flying King, for which Mohale is still the managing director. He did not pay for those vehicles because he used the clients’ money on personal projects.”

“The Minister should be asking the Lesotho Revenue Authority to investigate what happened to the taxes that were supposed to be paid. He should be asking Mohale hard questions about financial mismanagement, fraud and tax issues,” Pillay said.
Mohale’s phone was not being answered but last week he vehemently denied the allegations of fraud.

He said Pillay is making the allegations to smear his name because they have fallen out.
He also said Flying King is a viable company that is being liquidated because the shareholders are fighting.
An auditor who analysed Flying King’s finances at Pillay’s behest found that M4 million could not be accounted for.

The audit also identified incidences of “misappropriation of company assets” and use of company money to buy personal vehicles. Taxes had not been paid and financial records were not kept, the auditor said.

Staff Reporter

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