THREE senior Maseru City Council (MCC) bosses face charges of fraud, theft, corruption and money laundering. Town clerk Molete Selete and consultant Molefe Nthabane appeared in the Maseru Magistrate’s Court yesterday. City engineer Matsoso Tikoe did not appear as he was said to be out of the country. He will be arraigned when he returns.
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They are charged together with Kenneth Leong, the project manager of SCIG-SMCG-TIM Joint Venture, the company that lost the M379 million Mpilo Boulevard contract in January.
The joint venture made up of two Chinese companies, Shanxi Construction Investment Group (SCIG) and Shanxi Mechanization Construction Group (SMCG), and local partner Tim Plant Hire (TIM), has also been charged.
Selete and Nthabane were released on bail of M5 000 and surety of M200 000 each. Leong was granted bail of M10 000 and surety of M400 000 or property of the same value.
The charges are a culmination of the Directorate on Corruption and Economic Offences (DCEO) investigation that has been going on for the past months or so.
The prosecution says Selete, Nthabane, Tikoe, and Leong acted in concert as they intentionally and unlawfully abused the functions of their offices by authorising an advance payment of M14 million to a joint-venture building the Mpilo Boulevard.
An advance payment guarantee is a commitment issued by a bank to pay a specified amount to one party of a contract on-demand as protection against the risk of the other party’s non-performance.
The prosecution says the payment was processed after the company had provided a dubious advance payment guarantee. It says the officials knew that the guarantee was fake and therefore unenforceable.
As revealed by thepost three weeks ago, SCIG and SMCG were responsible for providing the payment guarantee as lead partners in the joint venture.
The prosecution says the MCC was required by law to make advance payment after SCIG-SMCG-TIM Joint Venture submitted a guarantee as per the international standards on construction contracts.
It alleges that the MCC has now lost the M14 million paid to SCIG-SMCG-TIM Joint Venture because of the fake advanced guarantee.
thepost has seen minutes of meetings in which officials from the joint venture admitted to MCC officers that the advance payment guarantee was dubious.
SCIG-SMCG-TIM kept promising to provide a genuine guarantee but never did. Yet the MCC officials did not report the suspected fraud to the police or take any action against the company.
It was only in January this year that the MCC cancelled the contract on the basis that the company had failed to provide a genuine guarantee.
Despite receiving the advance payment SCIG and SMCG refused to pay TIM Joint Venture for the initial work.
SCIG and SMCG, the lead partners in the joint venture, are reportedly suing the MCC to restore the contract. Officials from TIM Plant Hire however say they are not aware of their partners’ lawsuit against the MCC.
Staff Reporter
