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Cash-in-transit firm delivered R500m a month without due diligence, inquiry hears
The state capture inquiry heard on Monday that a Gauteng-based cash-in-transit company was delivering up to R500m in cash per month without adhering to money-laundering laws to check the source of funds for the transactions.
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.
Kalandra Viljoen, the former owner of Asset Movement Financial Services, acknowledged on Monday that her company did not comply with provisions of the Regulation of Interception of Communications and Provision of Communication Related Information Act, commonly known as Rica.
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.
The inquiry heard that, at its peak in 2016 and 2017, the company was delivering R500m in cash per month to businesses in Gauteng.
Evidence leader advocate Kate Hofmeyr quizzed Viljoen on what steps she took to comply with regulations meant to flag illegal or suspicious transactions.
Viljoen, in response, said she used to “phone the clients” to check they had indeed deposited money into the AMFS account. AMFS would then transfer the funds into an accounts of SBV Services, who would package the money and check the amount. AMFS – who used unmarked vans – would then pick up the money and deliver it to clients.
A ‘feeling’ all was okay
Viljoen told the commission she understood that verifying the source of funds meant she would check whether the funds came from her client, not where the client had sourced these funds from.
She also acknowledged she did not have, as required by law, a risk management and compliance programme; did not conduct ongoing due diligence and did not keep a record of transactions for five years. She told the commission she did not know this was necessary.
She said she never flagged any transaction as suspicious.
Viljoen also said she would verify clients by obtaining a copy of their ID books, their income tax numbers visiting their premises. If all was okay she would “get a feeling […] that everything was okay”.
The inquiry has not yet delved in depth into who she delivered the funds to or received funds from, but two names were mentioned: Koroneka Trading and businessman George Markides. Viljoen acknowledged that her company delivered more than R20m in cash to Markides, and may have received R9m from Koroneka.
The inquiry heard last week that Koroneka was a group that clinched a deal with SA Express to manage ground handling services at Mafikeng and Pilanesberg airports in the North West. Babadi Tlatsana, Koroneka’s director, told the inquiry on Saturday that her business had been “hijacked” and payments made from the business that she was not aware of.
The inquiry continues.