How Tholo cooked books

The fraudulent scheme, he says, also included the under-declaration of fuel levies over a period of 10 years.
Thahanyane filed the affidavit in a court case in which he is trying to block the police from seizing his properties on allegations that they were acquired with money stolen from Tholo Energy.
Thahanyane was charged with fraud and money laundering after Moroahae reported that he stole M40 million from his company over several years.
But Thahanyane says he didn’t steal a penny, claiming that Moroahae is using him as a scapegoat after he looted his own company to enrich himself and fund his extramarital affairs.
He says Moroahae used the police to instigate pre-emptive charges so that he wouldn’t spill the beans about his criminal and fraudulent activities.
Thahanyane’s explosive affidavit alleges that Moroahae ran Tholo Energy “like a spaza shop”.
He says “Tholo is operated illegally, benefits its shareholders and directors in total disregard of the tax laws and regulatory requirements in the fuel and petroleum industry”.
He tells the court that the company’s “accounting irregularities are an established practice and norm to the prejudice of bankers, particularly those banks that have provided financial facilities” to it.
Key to that fraud, he says, were auditors hired to rubber-stamp the dubious financial statements that would then be used to hoodwink tax authorities, regulators and the company’s bankers.
“We would prepare a set of financial statements and the auditors would simply express their opinion without having had the benefit of conducting the actual audits.”
“There were a number of irregularities in the financial statements with the result that the financial statements misrepresented the true state of affairs to the banks and the tax authorities.”
Thahanyane says he went along with these shenanigans and was handsomely rewarded but his conscience started troubling him.
He says he then requested a meeting to discuss under-declaration of sales of petroleum products to the different state institutions such as the Revenue Services Lesotho, the Petroleum Fund, and the Road Fund.
Other issues he wanted to discuss with Moroahae were the non-disclosure of transactions involving directors which had tax implications, the acquisition of Letšeng Diamond contracts as well as the pending court battle between the mining company and Tholo Energy.
He says Tholo did honour the meeting but instead rushed to the police to open fraud charges against him.
He says when he joined Tholo Energy in 2015 he “raised concerns about the way the company conducted its audits”.
He says at some point Moroahae told him that what he now knew of the corporate malfeasance constituted ‘classified information’ “known only to himself and myself”.
“He reminded me that I had signed a document/contract of employment that obliged me to keep all information about Tholo as well as its trade operations and business activities confidential and secret.”
“He did not stop there, he promised me that I stand to benefit financially in that I would get a share of the savings that would have been made from the under-declared fuel levies,” he said.
“I estimate that the company benefited to the sum of approximately M5 million per month, which translates to approximately M60 million per annum in under-declared fuel levies.”
He said Moroahae told him that the practice started in 2012, telling him that he trusted him wholeheartedly hence he appointed him to assist the company with finances.
“He therefore instructed me that I should maintain the status quo.”
He says as a result of the under-declarations of petroleum levies they had a lot of cash, counted in millions, and “it was this cash that was used to compensate me as agreed”.
He says when they fell out Moroahae rushed and “engaged inexperienced auditors and they produced results pointing to irregular transactions” that implicated him.
But Thahanyane says Moroahae knew about the transactions as they were part of the elaborate fraud he had used to loot from the company and cheat the government, tax authority and regulators.
“It suffices to mention that there was no way any accountant/auditor would not uncover the irregular transactions which were authorised by the two of us,” he said.
“I reiterate that he did not and would not confront me with the audit because I would have confronted him with the top secret.”
The secrets would include the monthly payments, ranging between M150 000 and M200 000, Thahanyane claims were made to a senior official of Letšeng Diamond who had allegedly facilitated Tholo Energy’s contract with the mining company.
“This money would be withdrawn in cash after Thabiso (Moroahae) would have requisitioned same and I would have authorised it,” he said, adding that he delivered it at the official’s mother’s house situated in Mohalalitoe.
The other payment would be the legal fees for a former police commissioner in his legal fights with successive Prime Ministers Thomas Thabane and Moeketsi Majoro.
There were also payments to a SASOL SA executive who was said to be “very key because he facilitated the acquisition of the Letšeng Diamond explosive transportation contract”.
Thahanyane says the under-declaration of levies meant Moroahae had to devise a plan to ensure the financial statements would be believed.
He claims when the previous firm of auditors had to be rotated, through Moroahae’s instruction “we came up with a plan and obtained the services of auditors who would just render their opinion without actually auditing the financial statements”.
“It is because we were avoiding external auditors discovering the under-declaration of the fuel levies was of such magnitude that it would collapse the company and they will be worried that the company engaged in such conduct.”
He says Moroahae told him that “Tholo would not consider any auditors who would express an adverse professional audit opinion”.
They decided to find auditors willing to express their opinion on the financial statements without actually carrying out the audit.