Judge Raymond Zondo, the chairperson of the judicial commission of inquiry into state capture, said on Monday that the commission would have to alert the SA Reserve Bank and other authorities to probe cases of cash-in-transit providers operating like unregulated banks.
Zondo’s remarks came after he heard the evidence of Kalandra Viljoen, the former owner of Gauteng-based cash-in-transit business Asset Movement Financial Services (AMFS).
The inquiry, which has been investigating allegations of state capture, corruption and fraud at state entities since August 2018, is currently focusing its attention on the airline industry.
R500m a month
In testimony on Monday morning Viljoen told the commission that AMFS used to deliver R500m in cash during some “peak months” in 2016 and 2017.
AMFS, which was based in Springs and had a staff of four drivers, was active between late 2015 to late 2017. It was sold on in late 2017.
But after being quizzed by evidence leader advocate Kate Hofmeyr, Viljoen acknowledged that firm did not comply with regulations, as she could not say what the source of the funds were that she was delivering to her clients.
She confirmed she did not have, as required by law, a risk management and compliance programme; did not conduct ongoing due diligence of her clients and did not keep records of the company’s transactions for five years. She told the commission she did not know this was necessary.
Viljoen added that that some AMFS delivery slips which noted the names and locations where money were delivered had been lost in a cash-in-transit heist.
Hofmeyr put it to her that her company was acting like a bank, and not a cash-in-transit service. The evidence leader noted that traditional cash-in-transit services did not receive deposits into their accounts. In addition they usually pick up and drop off cash for bodies such as retailers.
AMFS, meanwhile, used to have money paid directly into its account and then pay this money out to its clients in the form of cash. It did not check the source of the funds or verify what businesses its clients were involved in apart from a visit to their premises.
Hofmeyr asked Viljoen whether she was aware that conducting the business of a bank without a licence is a criminal offence. Viljoen said she was not aware of this.
Zondo, in conclusion, said it was necessary to alert the SA Reserve Bank and the Financial Intelligence Centre to look into cash-in-transit companies acting like banks.
“It may well be that there are serious transactions that are illegal where the money might not be traced after some time,” he said.
The inquiry continues.