Home Comment LRA must get to the bottom of this saga

LRA must get to the bottom of this saga

by Lesotho Times

IN July last year this paper revealed that China Garments Manufacturer (CGM), Lesotho’s biggest textile firm, could have shipped millions out of this country by evading tax.

The response from senior CGM officials at that time was a vehement denial assorted with attempts to blame “bitter workers” for leaking information to the media.

The Central Bank of Lesotho (CBL) and the Lesotho Revenue Authority (LRA) simply ignored the allegations of externalisation of funds and tax fraud.

The result was that CGM continued to operate for the next seven months as if nothing had happened.

We were not shocked by the inaction of the CBL and LRA for we understood that they don’t take cue from newspaper reports.

We have since grown used to the tendency here to ignore investigative stories.

We have made peace with the fact that we, as a newspaper, are seen as a nuisance and not a partner in development.

Yet we believe that if the authorities had moved in at that time and dug a little bit deeper they could have come up with something more solid.

Then last week a former CGM senior manager approached the revenue authorities with more evidence of the company’s shenanigans.

The LRA immediately jumped into action and raided CGM offices on Monday this week.

That raid was obviously overdue given that it has always been patently clear that something fishy was happening at CGM.

We however worry that between July when we broke the story and Monday’s raid crucial information might have been spirited away or destroyed.

The company has already shown that it is prepared to fight through thick and thin to keep its activities under wraps.

We note with grave concern that a former employee who was preparing to spill the beans was deported last Wednesday under questionable circumstances.

The employee was here legally but CGM went to great lengths to get him deported by making seemingly dubious claims that he had stolen company property.

What is particularly shocking are allegations by his lawyer that the police had said they had “instructions from the top” to get him out of the country even though there was a High Court order blocking the deportation.

If that is indeed what the police said then we have a reason to worry about the rule of law in this country and the fate of the LRA’s investigation into the alleged tax fraud at the company.

We are worried that someone from “the top” might once again interfere with the investigation to let CGM off the hook.

If someone from the top can instruct the police to ignore a High Court order then what stops them from throwing spanners into the LRA’s investigations which are still in their infancy?

It is our strong conviction that this investigation will be the true test of the LRA’s independence and autonomy to investigate large politically connected companies like CGM.

So much is at stake from the colossal amount of money involved to the integrity of the LRA itself.

Sources say the LRA might recover as much as M300 million in outstanding tax revenue from CGM.

That is not small change for a country whose economy is still battling to recover from the effects of the global economic crisis.

Also, this is a company that received a M30 million bailout from the government after claiming that it was facing bankruptcy a few years ago.

This is a company that employs about 5 000 Basotho who might lose their jobs if the chicanery continues.

The LRA therefore owes it to the people of Lesotho to fully investigate the allegations against CGM.

Politicians will do this country a huge favour if they stay out of this investigation.

They must allow the law to take its course and accept that the LRA is more than qualified to enforce the laws they have made.

In saying all this we remain alive to the fact that CGM too must be considered innocent until proven guilty.

The motive behind this investigation is not to destroy the company but to establish if it has side-stepped the law in any way.

If CGM has nothing to hide then it must not have problems cooperating with the investigators and not seek “political shelter”.

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Lesotho’s widely read newspaper, published every Thursday and distributed throughout the country and in some parts of South Africa. 

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