By Bahle Gama
Senior Lawyer Sidumo Mdladla says that there is no order that allows for Likhwane’s accounts to be frozen. He made this submission during arguments before the High Court on Thursday where he was representing the seven added pension funds that are part of the proceedings between the Financial Service Regulatory Authority (FSRA) and Likhwane.
He said bank accounts belonging to Likhwane Beneficiary Funds had been illegally frozen without an order to that effect. The seven pension funds represented by Mdladla include Eswatini Civil Aviation Authority (ESWACAA) Provident Funds, Eswatini Electricity Company (EEC) Pension Fund, Eswatini Revenue Service (ERS), Eswatini Provident Staff Pension Fund, Umfuso Umbrella Fund and Eswatini Sugar Association (ESA). The senior lawyer argued that what was happening at Likhwane affected these pension funds as well.
He told the court that appointed liquidator Joseph Warring was writing letters to banks and other financial institutions to freeze Likhwane’s accounts and there was no order giving him the authority to do so. “It is unfortunate to Likhwane as we as other funds that invested their monies,” he submitted.
Mdladla stated that the freezing of the accounts was birthed by an application for liquidation that was incurably bad at law, adding that urgency was key in this instance, therefore there was a need for all the issues to be interrogated.
He further argued that having an order issued against another party in their absence was unacceptable and should not be allowed to be done willy-nilly in court.
The lawyer said it was difficult to comprehend a situation in which parties would engage, and in the middle one party then decided to approach the court behind the back of the other party. “I doubt if the order would have been granted if the other party was present,” he said.
Mdladla went on to note that FSRA complained about Likhwane making bad investments and said the regulator was supposed to have been proactive to ensure that such ‘bad investments’ did not happen to begin with.
He told the court that pension funds invested their money in the market because they hoped the FSRA would protect them. He also disclosed that Lingedla Investment was removed for the imprudence on the part of Likhwane adding that when it came to the E10 million invested, FSRA fell short in its arguments.
“Instead, FSRA adopted a holier-than-thou attitude when dealing with the matter, yet it was to blame for the current state of affairs,” he said.
Mdladla said he was unconvinced that FSRA considered other options besides liquidation, and it was bad that beneficiaries now had to pay for costs when they were not even consulted, to begin with. Mdladla was echoed by lawyer Mlungisi Khumalo who is of the view that the regulator is punching holes in the capabilities of Warring as a provisional liquidator for Likhwane. He said an application seeking a co-liquidator was filed in court but was later withdrawn.
Khumalo said even if the liquidation proceeded, Warring would have been conflicted because he was part and parcel of the formation of Likhwane.
“Warring was obviously going to act against Likhwane because of the imminent lawsuit to be initiated by Likhwane against the FSRA,” Khumalo said.
According to Khumalo, wanting to liquidate Likhwane was also against the interest of the beneficiaries, including orphans, and further questioned why the regulator was claiming it could not be able to monitor Likhwane’s activities. “Because Likhwane was submitting quarterly reports and audited financial statements to the former,” he said.