Ecsponent allegedly broke 15 licensing rules, regulations

ESW Investment Group Limited has punched holes into the operations and establishment of Ecsponent Eswatini which went under with a massive E340 million belonging to emaSwati.

In a letter of demand sent to Financial Services Regulatory Authority (FSRA) Chief Executive Officer (CEO) Ncamiso Ntshalintshali by S.V Mdladla & Associates attorneys on behalf of ESW Investment Group Limited, listed 15 flaws in the compliance of the Company and the deficiencies which had been going on since the grant of the License in 2014.

Here are the non-compliances established by ESW Investment Group Limited after it undertook an audit of the company.

1. Ecsponent did not have a resident Chief Executive Officer

2. Ecsponent had contravened Section 19 of the Licensing Rules, 2013 in that the company neither hired a locally resident Chief Executive Officer nor appointed a local Board of Directors

3. All decisions about the running of Ecsponent Eswatini were made by the Group Board of Directors in Pretoria. None of the local directors were involved.

4. There was no official date which had been stated by the Ecsponent for the starting of operations in Eswatini.

5. There were no internal auditors and Compliance Officers as directed by the mandatory provisions of the statutes regulating the industry.

6. Until the year 2016 there had been no internal audit conducted by Ecsponent Eswatini nor were there any internal reports which had been submitted by the company as per dictates of the Law.

7. There were no product valuation reports which had been made.

8. The audited financial statements had not been lodged in time and the lodgment fees had only been paid once. 9. There was no register of all Eswatini investors as per legal requirement. 10. The company had not filed a Tax Clearance Certificate

11. There were no agreements or documentation which justified the loans the company had made to other companies as well as investment agreements.

12. The company had behaved as a company that extends credit, yet it did not have such a License. 13. Ecsponent Swaziland had a single bank account which it used for its operations and also investment deposits from its clients. Furthermore, it was noted that the accounts were controlled by Financial Directors in Pretoria at Ecsponent South Africa.

14. It was also found that Ecsponent Swaziland is simply used as a vehicle through which to market preference shares and collect Swati funds.

15. All decisions were made at Ecsponent Group Head offices in Pretoria, South Africa. There was no local investment committee and there were no committee meeting minutes and there were no investment reports.