Home Business Tainted SA banknotes flood Lesotho

Tainted SA banknotes flood Lesotho

by Lesotho Times
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…CBL says bleached bills have no value,

….Warns public to be on high alert,

….As Lesotho national is nabbed in SA over tainted bank notes. 

Bongiwe Zihlangu/Moroke Sekoboto

TAINTED South African bank notes from ATM bombings and cash in transit heists in South Africa have flooded Lesotho.

And Basotho in possession of South African bank notes – even legitimate ones –  are now stuck. Local retailers and other outlets have started rejecting all South African Rands to try and avoid the tainted notes.

Some banks, retailers and members of the public had already suffered financial losses because of the tainted/bleached banknotes, the Central Bank of Lesotho (CBL) said in a statement.

The CBL said dye-stained/bleached bank notes are believed to have emanated from a spate of riots which rocked Kwazulu Natal Province in July 2021.  Other have emanated from the recent bombings and cash in transits heists  in South Africa, the bank said.

ATM bombings and cash in transit heists are ubiquitous in South Africa.  When robbers bomb an ATM or try to rob a cash in transit vehicle, an ink or dye  that stains the notes to make them unusable is automatically discharged over the notes, discolouring them.  The robbers then try to get them washed (bleached) to release the staining dye to make them look authentic and use them. But once detected, the bleached notes cannot be legal tender.

The July 2021 riots in South Africa left a wave of destruction and caused the deaths of over 350 people. The chaos was allegedly triggered by political allies of the country’s disgraced former President Jacob Zuma, in reaction to his imprisonment for contempt of court by that country’s apex court, the Constitutional Court. The chaos saw a lot of ATM bombings. Cash in transit heists have also continues unabated in South Africa.

Basotho are now victims of the dye-stained notes which have reached Lesotho. Some legitimately withdrew such notes from local official ATMs. But retailers, commercial banks and the CBL are rejecting them.

“The public is notified that the bleached Rand banknotes will not be exchanged for value by the banks and Central Bank of Lesotho,” the CBL said in a statement.

The flooding of the notes in Lesotho comes almost two years after the South African Reserve Bank (SARB) first warned CBL of the possibility of the bleached banknotes circulating in Lesotho following the 2021 riots and the ATM bombings that happened then, particularly in Kwazulu Natal province.

While the bleached ink (on the notes) is visible under ultraviolet light (UV) and other sophisticated cash processing equipment, it cannot be easily detected by the naked eye, the CBL said. As a result, individuals and institutions with the notes had suffered losses because they thought these were legitimate when they were not.

“The public is therefore warned against accepting and using the dye-stained/bleached Rand banknotes in circulation as a means of payment because this security renders them unusable and worthless,” said the CBL, urging the public to also remain vigilant while it “works tirelessly”  with the South African Reserve Bank (SARB) to find solutions to address the challenge.

The SARB had warned CBL and other regional central banks about the possibility of the tainted notes reaching their territories after the 2021 riots.

It seems the problem has now exploded. The problem for the public is that the notes look genuine at face value.  The public and retailers who don’t have the equipment to detect legitimate bank notes will therefore easily fall prey to the bleached notes.  That explains why most outlets have now imposed a blanket ban on accepting any Rands.

Contacted for comment last night to explain how the bleached notes could have ended up in local ATM machines the  CBL’s Chief of Corporate Communications, Ephraim Moremoholo, said: “At the present moment, we are not in a good position to speculate as we are, in collaboration with other key stakeholders, carefully studying the problem to determine the relevant facts surrounding it.” 

However, investigations by the Sunday Express have revealed that thousands of bleached South African banknotes have been circulating in Lesotho since December last year or the beginning of 2023 as some Basotho have been drawing such bills from ATMs.

The Loti is pegged to the South Africa Rand.

Leading retailer, Pick n’ Pay Supermarket has since installed devices with ultra-violet light to verify the authenticity of notes to avoid falling prey to the worthless notes.

To the naked eye, the South African banknotes, mostly in R100 and R200 denominations, look authentic. They bear all required watermarks and the bleached areas can only be detected by ultra-violet devices.

“While the bleached ink is visible under ultra-violet light (UV) and other sophisticated cash processing equipment, it cannot be easily detected through the naked eye. Consequently, some banks, retailers and members of the public have suffered financial losses because of the bleached banknotes,” the CBL said.

The CBL also announced that some banknotes may have other ink stains, such as pen or stamp inks and these can be exchanged at local banks and the central bank.

A journalist from this publication drew money from an ATM of a local bank (name withheld) on 10 February 2023 and she was shocked when one of her M200 banknotes from that withdrawal was declared unusable at Pick n’ Pay Supermarket.

A cashier at the store advised her to return it to the bank where she had withdrawn it from but the bank refused to take it.

Pick n’ Pay Supermarket has for the past three weeks been testing the authenticity of South African banknotes with their UV device placed at the main counter closer to the entrance of the store.

Just last week Saturday morning, a cashier at the main counter of the Pick n’ Pay entrance rejected several R100 banknotes from people who were trying to buy groceries, forcing them to instead use their cards to process transactions.

“There is not much we can do. If your money has traces of bleach, which you can’t see with your naked eye, it is useless. It has no value. If it was withdrawn from an ATM, return it to your bank with proof of withdrawal,” she said.

Shoprite Sefika Complex administration Manager, ‘Matse’po Peshoane, said they used to receive suspicious and counterfeit South African notes mostly during the festive season but this had since dropped noticeably.

“In December we used to receive fake and tainted notes but this has since dropped. The Central Bank advised us to destroy the notes to stop them from circulating in the country,” Ms Peshoane said.

Following the CBL statement, commercial banks Nedbank and First National Bank (FNB) have issued statements on their social media pages, cautioning Basotho to be vigilant when accepting South African notes.

The banks informed their clients  the bleached notes would not be exchanged for value.

“You are cautioned to be vigilant when accepting Rand banknotes as there are dye-stated/bleached banknotes circulating in the country. The bleached Rand banknotes will not be exchanged for value,” FNB said.

Nedbank reiterated the CBL statement  saying Basotho must be vigilant “while the Central Bank of Lesotho works tirelessly with the South African Reserve Bank to find mitigating solutions to address this challenge”.

“In line with the public notice published by the Central Bank of Lesotho on Wednesday 01/03/2023, caution is hereby given to our valued clients, retailers, stakeholders, and the nation at large, about the prevalence of compromised (dye-stained/bleached) banknotes in the form of South African currency making rounds in Lesotho,” Nedbank said.

“The public is also notified that the bleached Rand banknotes will not be exchanged for value at the banks or Central Bank of Lesotho,” the bank added.

Meanwhile, three suspects possibly linked to ATM bombings in and around Gauteng were yesterday arrested by the South African Police Service (SAPS) Tactical Response Team (TRT) in Tembisa.

Police found them in possession of an undisclosed amount of dye-stained money, explosives, as well as four firearms.

Police spokesperson, Brigadier Athlenda Mathe, in a statement last night said they were following up on intelligence driven information when they identified the first suspect.

The 44-year-old South African national was cornered and his vehicle searched. Dye-stained money was found in the boot of his vehicle, she said.

Two more suspects, a Lesotho national aged 35-years and a 28-year-old Mozambican national were also arrested at a house in the same area.

They too were found with dye-stained money, explosives, and unlicensed firearms.

The three suspects are expected to appear before the Tembisa Magistrates’ Court tomorrow, Brigadier Mathe said.

The tainted notes are also believed to be circulating in Namibia and Swaziland, other Southern African Customs Union (SACU) countries that readily use the rand.

 

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