Construction magnate Simbi Phiri says there is no basis for allegations that his companies were involved in illegal transfers of large amounts of funds — in dollars — from South Africa to Botswana.
Phiri insists that he followed all the correct channels when taking the funds from his headquarters in South Africa to Botswana, where his companies have subsidiary operations and projects.
Phiri is chairman of Khato Civils and South Zambezi, two of Africa’s leading construction, engineering and infrastructure development
companies. The companies’ specialty is water and sanitation projects.
He was reacting to press reports alleging that he was restrained by the Directorate on Corruption and Economic Crime (DCEC) in Botswana from accessing the companies’ bank account in Botswana.
He allegedly brought money into Botswana without declaring it at the border.
Some newspaper reports claimed that the amount was $8.8-million and was transported in one batch, an issue that Phiri disputes.
Phiri said in an interview this week that two courts in Botswana cleared his companies of any wrongdoing and ruled in his favour in the manner in which the funds were relocated.
He added that having been unsuccessful in the first two bids to have the accounts frozen, the officials in the DCEC approached the appeals court judge, who decided that since the officials were insisting that they wanted to investigate the companies’ financial affairs, they should do so within a reasonable and specified period, and not indefinitely.
Phiri said the court also added that he should not be denied access to the companies’ accounts, and an agreement should be reached between the parties on how much was needed for day-to-day operational costs.
“There is absolutely no basis for this action against our companies or myself as a businessperson. Everything was above board and all the legal channels for clearance of the funds were followed in South Africa,” he said.
Phiri believes this is a smear campaign fuelled by jealous people who want to undermine his businesses and their success.
“We are doing a lot of work in Botswana and have invested thousands of dollars in the country. We are recapitalising our business in Botswana and the funds that are the subject of speculation are required for projects. The funds are far less than the $8.8-million that is bandied about, and they were transferred not at once, but in tranches, over different periods,” he said.
He said the money would be used to build a two-storey office block, workshops in Botswana and finance operations for projects that Khato Civils and South Zambezi are involved in. The projects would create about 5 000 jobs in Botswana.
Phiri said the amounts were properly declared to the authorities; they were converted from rands to dollars in a registered foreign exchange bureau in South Africa, where all the relevant paperwork was done.
He said the reason the funds were converted into dollars was so they would not depreciate in value: “We wanted to avoid a situation where the money is changed to local currency and depreciates in value as we wait for the official processes and red tape leading to approval of projects. These things take time. We should have started operating these projects in Botswana in 2015, but the officials have not finalised the processes required for us to start,” said Phiri.
He said the officials in Botswana could have easily accessed the information about the funds by contacting the South African authorities, including the South African Revenue Services and the Financial Intelligence Centre.
He said the information is a phone call away and is readily available, as he is known to be a businessman in good standing in South Africa and many other African countries.
“It is not only preposterous, malicious and defamatory to insinuate that these funds are the proceeds of crime or money laundering, but it undermines the efforts of the many people who have worked tirelessly and sacrificed a lot to build these reputable companies.”
He added that if guarantees could be given that the funds would not lose value when converted into local currency, Khato Civils and South Zambezi would use other available methods to transfer funds.
“It still comes as a shock to some people that a black businessperson can be successful and have a substantial amount of money in the bank account that could be kept for, say, up to one year while awaiting the commencement of a project. Some of us have worked hard for our businesses and we have the financial discipline to relate to money in a proper and dignified manner,” said the business magnate.
He added that he was shocked to learn that the DCEC claimed that they did not know his whereabouts, or where they could contact him.
“I am a legitimate businessman and I pay my taxes. I am easily traceable. In fact, one of the senior officials of the DCEC has been a guest in my home in South Africa on no less than five occasions. I have also attended weddings and other occasions with the official and they know me very well and know exactly where I can be found.
This is only meant to scandalize my good name,” said Phiri.
He added that if it was so important for businesspeople to declare the amounts they are carrying at the border, the authorities should make such information clearly known, and stress it each time.
“Look at the emphasis that is made for one to use a passport when crossing a border. Maybe the same should be done in such instances. All I know is that if you have the paper trail of the amounts carried, you are good to go,” he said.