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Zimbabwean accountant's estate sequestrated for R17 million fraud
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A Zimbabwean accountant has had his estate finally sequestrated after stealing millions of rand from his former employer, Johannesburg-based non-profit company Education and Training Unit (ETU).
Edward Mwanandimai siphoned millions of rand meant to pay the SA Revenue Service (SARS) and other suppliers, and later failed to honour acknowledgement of debt payments despite claiming to have over R145 million in assets.
He worked as an accountant at ETU from July 2014 until voluntarily leaving on or around May 31, 2020.
According to papers filed at the Gauteng High Court, Pretoria, the first fraudulent ETU payment was made in January 2015 to SARS, with a total of 384 such payments occurring during employment, the last being in April 2020.
Mwanandimai also diverted payments meant for legitimate creditors like SARS to his or his company Lopdale Services and Investments' accounts.
An internal investigation conducted by ETU revealed that these payments did not reach the intended recipients. Between January and July 2015, one of Mwanandimai's bank accounts received nearly R679,000.
Lopdale Services and Investments was paid R14.65 million in the period between August 2015 to December 2019, while an additional R396,100 was also transferred.
Mwanandimai set up supplier accounts resembling existing ones, directing payments to accounts linked to himself and created a fake employee, who as part of ETU's Discovery Medical Aid Scheme, led to fraudulent contributions totalling R160,845 from September 2017 to April 2020.
ETU also paid R239,819 for his medical aid contributions to Bestmed from November 2016 to April 2020, without deducting these amounts from his salary.
ETU also covered his cellular phone accounts, with no recovery from his salary and he set up three debit orders on the entity's account.
Mwanandimai manipulated bank master data and payroll records to gain unauthorised benefits.
He initially had viewing rights on the banking system but was subsequently granted payment loading access after he requested further authorisation, according to court papers.
Mwanandimai's actions were discovered after a new accountant was hired and audited the accounts, and established that he misappropriated over R17m, with about R6.8m, the capital debt, confirmed.
In September 2020, he acknowledged the use of funds from ETU and confirmed that the amount owed corresponds to the outstanding balance specified in the signed acknowledgment of debt.
"The debtor (Mwanandimai) is truly and lawfully indebted and legally bound to the creditor (ETU) in the amount of six million seven hundred and ninety-seven thousand seven hundred and fifteen rand and sixty cents (R6 797 715.60)," reads the acknowledgment of debt.
In the acknowledgment of debt, he admitted that he stole several millions of rand from ETU and that the total amount stolen was in excess of the capital debt. He did repay certain of the money which he stole.
His lawyers indicated that he was willing to settle the amount outstanding of R1.777m but could only afford an amount of R100,000 a month due to the Covid-19 pandemic and the July 2021 looting unrest, which has affected his business.
In a letter dated October 11, 2021, Mwanandimai offered to pay over R10.9m, starting January 31, 2022, over a period of 72 months, which is less than the outstanding balance of R17.1m.
A certificate of balance indicating an amount of R17.1m was issued after all transactions were confirmed by the relevant banks, but Mwanandimai has not made any payments since June 2021.
Last Thursday, Acting Judge Sanet van Aswegen found that Mwanandimai did not manage or disclose his estate with sufficient transparency, and that supporting documentation was provided only at the hearing, despite the prior submission of both an answering affidavit and a supplementary answering affidavit.
"In my considered opinion, the interests of justice are best served by the court exercising its discretion to grant a final sequestration order.
"The issuance of such an order would benefit all the creditors by invoking the pertinent provisions of the Insolvency Act, thereby facilitating an investigation of the estate for their advantage," the acting judge declared.
ETU also filed a fraud case with the Yeoville police station in September 2020.
Mwanandimai's legal representative did not respond to requests for comment while attempts to contact ETU were unsuccessful.
Edward Mwanandimai siphoned millions of rand meant to pay the SA Revenue Service (SARS) and other suppliers, and later failed to honour acknowledgement of debt payments despite claiming to have over R145 million in assets.
He worked as an accountant at ETU from July 2014 until voluntarily leaving on or around May 31, 2020.
According to papers filed at the Gauteng High Court, Pretoria, the first fraudulent ETU payment was made in January 2015 to SARS, with a total of 384 such payments occurring during employment, the last being in April 2020.
Mwanandimai also diverted payments meant for legitimate creditors like SARS to his or his company Lopdale Services and Investments' accounts.
An internal investigation conducted by ETU revealed that these payments did not reach the intended recipients. Between January and July 2015, one of Mwanandimai's bank accounts received nearly R679,000.
Lopdale Services and Investments was paid R14.65 million in the period between August 2015 to December 2019, while an additional R396,100 was also transferred.
Mwanandimai set up supplier accounts resembling existing ones, directing payments to accounts linked to himself and created a fake employee, who as part of ETU's Discovery Medical Aid Scheme, led to fraudulent contributions totalling R160,845 from September 2017 to April 2020.
ETU also paid R239,819 for his medical aid contributions to Bestmed from November 2016 to April 2020, without deducting these amounts from his salary.
ETU also covered his cellular phone accounts, with no recovery from his salary and he set up three debit orders on the entity's account.
Mwanandimai manipulated bank master data and payroll records to gain unauthorised benefits.
He initially had viewing rights on the banking system but was subsequently granted payment loading access after he requested further authorisation, according to court papers.
Mwanandimai's actions were discovered after a new accountant was hired and audited the accounts, and established that he misappropriated over R17m, with about R6.8m, the capital debt, confirmed.
In September 2020, he acknowledged the use of funds from ETU and confirmed that the amount owed corresponds to the outstanding balance specified in the signed acknowledgment of debt.
"The debtor (Mwanandimai) is truly and lawfully indebted and legally bound to the creditor (ETU) in the amount of six million seven hundred and ninety-seven thousand seven hundred and fifteen rand and sixty cents (R6 797 715.60)," reads the acknowledgment of debt.
In the acknowledgment of debt, he admitted that he stole several millions of rand from ETU and that the total amount stolen was in excess of the capital debt. He did repay certain of the money which he stole.
His lawyers indicated that he was willing to settle the amount outstanding of R1.777m but could only afford an amount of R100,000 a month due to the Covid-19 pandemic and the July 2021 looting unrest, which has affected his business.
In a letter dated October 11, 2021, Mwanandimai offered to pay over R10.9m, starting January 31, 2022, over a period of 72 months, which is less than the outstanding balance of R17.1m.
A certificate of balance indicating an amount of R17.1m was issued after all transactions were confirmed by the relevant banks, but Mwanandimai has not made any payments since June 2021.
Last Thursday, Acting Judge Sanet van Aswegen found that Mwanandimai did not manage or disclose his estate with sufficient transparency, and that supporting documentation was provided only at the hearing, despite the prior submission of both an answering affidavit and a supplementary answering affidavit.
"In my considered opinion, the interests of justice are best served by the court exercising its discretion to grant a final sequestration order.
"The issuance of such an order would benefit all the creditors by invoking the pertinent provisions of the Insolvency Act, thereby facilitating an investigation of the estate for their advantage," the acting judge declared.
ETU also filed a fraud case with the Yeoville police station in September 2020.
Mwanandimai's legal representative did not respond to requests for comment while attempts to contact ETU were unsuccessful.
Source - IOL
