Staff Reporter
CGM Group fraud mastermind, Madhav Vasant Dalvi’s deceit and fraud ran deep.
He is alleged to have funnelled another M24,840,357.59 from Presitex into a South African shell company, Alchemy, during the Covid lockdown period between May 2020 and December 2022.
Alchemy, purportedly owned by Dalvi’s son, Chaitanya Madhav Dalvi, and former finance and administration manager, Sharmala Roya, acted as a “broker” to justify payments, despite having no real role as a supplier. The deal was all ruse to steal from CGM.
In addition, Dalvi paid USD$698,880 (M12,691,102.88) to his wife Sushama Madhav Dalvi, USD$271,600 (M4,930,734.61) to Chaitanya, and USD$162,963 (M2,958,498.99) to himself. These payments were made on top of his monthly salary of M180,000 and the M85,000 paid to his son—none of which were approved by CGM’s shareholders, Solandra Inc. and Ci-Ta Chang.
All this after he had stopped repayment of the government’s USD$8 million which had been provided to CGM by the Ministry of Finance as guarantees.
CGM had been repaying the debt in M1,150,000 monthly instalments. This until May 2020 when Dalvi stopped the payments.
He claimed the company was struggling due to the COVID-19 pandemic, citing “cancelled orders” and non-payment by debtors.
“In light with the current global COVID-19 pandemic of which we have already seen its impact on our business locally resulting in debtors not paying their accounts and subsequently orders being cancelled.
“We are therefore requesting for a grace period of 3 months to our monthly loan repayment of M 1,150,000 for the period May 2020 to June 2020.
“We would also like to highlight that there has been no default on the repayment plan that we agreed upon in April 2019 with a total repayment of M34,950,000 to date.”
Alchemy
Alchemy was just one of several shell companies and other schemes Dalvi had created involving Sushama, Chaitanya, Roya, CGM employee Asitha Medawewa, Presitex Manager Jitesh John Babu and employee ‘Mathabo Klass, as well as CGM auditor Tseko Alphonce Bohloa.
In reality, they were not suppliers but used as “brokers” to justify payments to themselves.
The aforementioned – except Dalvi, his wife, son and Roya – were charged in the Maseru Magistrates Court on 15 May 2024.
Dalvi and his family members are now fugitives after fleeing Lesotho. The Maseru Magistrates Court has since issued their warrants of arrest.
Those charged were released on M10,000 bail and M100,000 surety each by Chief Magistrate ‘Matankiso Nthunya. Their trial will proceed before the High Court on a date to be confirmed.
Rent to Alchemy
In another brazen act, Dalvi purchased two properties in Ladybrand, South Africa, through CGM and Presitex accounts. These properties—valued at M1,928,854 and M2,863,641.60—were purportedly leased to Presitex by Dalvi, with Sushama acting as the landlady. Payments were made directly to her Standard Bank South Africa account and the second property was leased to Alchemy by Dalvi and rental paid to Dalvi’s Standard Bank South Africa account. Another way to milk more money for his personal gain.
- From January 2020 to February 2024, a total of M726,000 was paid for one property at increasing rental rates, starting at M14,000 per month and reaching M19,500.
- From December 2018 to February 2024, a total of M1,531,935 was paid for the second property, starting at M19,470 per month and increasing to M25,000.
Blue Platinum
The sly Dalvi would establish additional shell companies, aiming to close them every two years to avoid scrutiny. On 1 December 2021, Blue Platinum Enterprises held in Dubai, entered into a sham contract with Presitex as its fabric supplier. Dalvi signed the contract on behalf of Presitex while Medawewa, while still a CGM employee, signed on behalf of Blue Platinum.
This company was paid USD164 770.76 (M2,989,460.65) by Presitex.
The deceit ran deep, with CGM employees in Maseru, acting on behalf of these shell companies to handle orders and payments between CGM and fabric mills. While fabric was directly shipped to Lesotho from India, invoices went through Deniexperts, allowing Dalvi to “invoice the Lesotho company through third-party invoicing”
Medawewa used the pseudonym, Shane Naidoo, to sign invoices from the dubious companies to Presitex such as Alchemy.
Other shell companies which were used to defraud the CGM Group were Chane Merchants and DCM Worldwide. Chane Merchants was paid USD$3 835 402.80 (M72 974 099.81), while DCM Worldwide got paid USD$1 235 509.83 (M23 104 681.43).
Solandra Inc
Founded in 1986 by the Chang family, CGM Group grew to become one of Lesotho’s largest textile employers, with over 10,000 workers at its peak. The group expanded rapidly, establishing three subsidiaries: CGM Industrial (1987), United Clothing (1993), and Presitex Enterprises (2000).
However, under Dalvi’s leadership, the company began to unravel. United Clothing was closed in 2012, and its assets, including machinery and inventory, mysteriously disappeared. By 2024, CGM’s workforce had dwindled to just 1000 employees.
Dalvi further consolidated his control over CGM by illegally transferring 999 out of 1,000 shares to himself in October 2022. He claimed ignorance of the shareholders’ whereabouts, arguing that the dissolution of Solandra Inc. in 2019 rendered its shares claimable. However, Solandra was restored in June 2022, and its shares remain intact.
A local weekly, which seems to be fighting in Dalvi’s corner, had last week reported that Solandra had been liquidated or dissolved. This despite Prof Chang’s lawyer, Attorney Kuili Ndebele, informing that newspaper before publishing that Solandra had not been liquidated nor dissolved.
Dalvi
Dalvi is the former sole director of CGM Group and its subsidiary, Presitex Enterprises, who stands accused of systematically siphoning millions of maloti from the company’s coffers over a 15-year tenure. His activities, which included the misuse of company funds, fraudulent schemes involving shell companies, and self-dealing, have left one of Lesotho’s largest textile firms teetering on the brink of collapse. Dalvi fled Lesotho in 2023, leaving behind unpaid debts, a decimated workforce, and a trail of financial ruin. However, Prof Chang is doing all in her power to salvage the textile giant and restore it to its former glory. She has been urged not to get distracted by the crooked Dalvi, who is seemingly sponsoring negative articles about her in gullible media, while not explaining all the hundreds of millions he stole from CGM.
