BURS, DCEC pounce on millionaires
Innocent Selatlhwa | Monday November 1, 2021 06:00
The internal revenue and the corruption-busting agencies have been onto the two companies allegedly owing the tax collector a combined P12 million in unpaid taxes.
Mmegi investigations have revealed that the two companies that were awarded a combined P47 million in tenders to supply masks could have gotten the tenders dubiously.
“The two security organs have been following them since the awarding of the tenders. The way tenders were awarded from the Office of the President (OP) with a clause that they were exempted from paying Value Added Tax (VAT) and Customs Duty while supplying seemingly overpriced masks raises eyebrows. That raised eyebrows as to what was happening and the agencies followed the money trail,” a source privy to the two organs told Mmegi.
The source intimated: "BURS is looking into curious transactions in which money trails show that large deposits from the company accounts are made to several trust accounts".
This raised questions of who the actual beneficial owners of the companies are. Hutrex Group, owned by Reabetswe Barwabatsile was awarded a P27 million tender by the OP to supply 40,000 N95 masks. This translates to P600 per mask. When quizzed by the media then, Barwabatsile denied any allusions to corruption or nepotism stating that he had won the tender fairly. He stated then that they were invited to tender alongside 37 other companies. He justified the high prices for the masks stating that there was tax and other costs to be taken into consideration when pricing. Fast forward, today his company owes the tax collector over P4.5 million in VAT only. This is for the period from 2019 to date.
Contacted for comment, Barwabatsile said he was not aware of any investigations. "I am not aware of any investigations by the DCEC. As for BURS, we have paid our due taxes. They only wanted some information from us, which we gave to them and our name is in the clear," he said.
Early this year, Barwabatsile denied allegations of any wrongdoing in a subsequent interview with a local newspaper. “We received an invitation to tender just like any other company. I think up to 38 companies responded to the tender. We were never directly appointed as some people have been saying. We competed with 38 other companies and won fair and square. We have been doing business for seven years now and always deliver,” he told the newspaper.
Meanwhile, Moffat Group also scored big during the height of the pandemic with its just-under P20 million award for four million disposable masks questioned in Parliament. The Leader of Opposition, Dumelang Saleshando had filed an urgent question without notice to Parliament demanding to know whether the ministry had issued a purchase order to Moffat Group for the purchase of disposable face masks and how it came about. This was after a picture of the purchase order raised dust on Facebook.
“A total of 38 citizen companies identified from the database compiled by our COVID-19 Procurement Unit were invited to bid for the supply and delivery of Personal Protective Equipment, which is inclusive of disposable three-ply face masks. Out of the 38 companies invited, 32 responded and these included Moffat Group,” Minister Dumezweni Mthimkhulu responded then. Mmegi can confirm that the internal revenue agent wants P7.1 million in VAT from the company in proceeds made from 2018 to date.
Efforts to get a comment from the company directors Zak Moffat and King Moffat hit a snag. Employees at the company said the duo was outside the country but would relay the message to them. Upon following up, the employees said they had relayed the message, but the directors had not reached out by press time. Company chairperson and father of the duo, Moffat Mophuting said their company was in the clean. "We do not have any issues with any law enforcement agency, not even BURS. When there is an issue also, it will be dealt with, with the relevant authority and not the media," he said.
Even though it is not clear what the DCEC investigations bore. The tax operator is said to be putting the two companies and their directors under pressure. “They are running out of time as the taxman is putting pressure on them. Should they fail to settle the debts in a reasonable time, they are likely to lose money in their accounts as well as some assets they own,” a source said. BURS general manager (communications), Mable Bolele could not be drawn into commenting on the matter. "We do not comment on issues we have with our clients to the media or anyone," she said briefly.
For his part, DCEC public relations officer Lentswe Motshoganetsi said: “I am not in a position to discuss operational matters of the DCEC as that is contrary to the Corruption and Economic Crime Act. However, I can confirm that the DCEC has received over 60 allegations of corruption pertaining to COVID-19. Some of the allegations are in relation to questionable procurements by some companies.”
He also said some of the alleged matters have been forwarded to the Directorate of Public Prosecutions for their appraisal; others are still under investigation while some have been closed due to insufficient evidence.