In yet another troubling display of bureaucratic opacity, the Financial Intelligence Unit (FIU) has refused to provide any meaningful answers regarding the alleged under-declaration of fuel levies and tax evasion amounting to over M450 million by Tholo Energy, a case with significant implications for public revenue.
Newsday this week sent a list of questions to FIU via and email but the unit’s responses have been nothing short of dismissive, offering little more than a legal smokescreen to justify its silence.
The agency, mandated to combat financial crime including but not limited to money laundering, deflected the questions, hiding behind vague references to confidentiality laws while failing to offer any assurances that action is being taken.
This publication reported last week that an alleged staggering M450 million tax fraud scandal allegedly involving Tholo Energy and its Managing Director, Thabiso Moroahae, has been met with alarming silence from law enforcement agencies, despite evidence provided by a whistle-blower.
Documents obtained by Newsday reveal repeated communication with top institutions, including the FIU, Directorate on Corruption and Economic Offences (DCEO), the Lesotho Mounted Police Service (LMPS), the Revenue Services Lesotho (RSL), and the Director of Public Prosecutions (DPP) Advocate Hlalefang Motinyane.
However, this publication observed that the responses, ranging from dismissive bureaucratic jargon to outright non-responsiveness, suggest a dangerous level of institutional complacency.
This paper learned that while the FIU conducted and concluded an investigation and shared the results of its analysis with “both the investigatory and supervisory authorities,” in 2024, no further action has been taken.
The law enforcement agencies, including the RSL and LMPS, have either deflected responsibility or cited legal constraints to justify their inaction.
The case echoes past scandals where politically connected or wealthy individuals appeared immune to prosecution, raising concerns about whether corruption has effectively paralysed Lesotho’s justice system.
At the heart of this controversy is a straightforward question: Did Tholo Energy engage in fraudulent under-declaration of fuel levies and swayed regulation to evade tax, and if so, what is being done about it?
Instead of providing clarity, the FIU has opted for an astonishing level of secrecy, refusing to disclose its findings on the alleged wrongdoing, which investigatory authorities have been engaged, whether regulatory bodies have taken any action, and what, if any, public accountability measures are in place.
Rather than serving as a watchdog for financial crime, the FIU appears to be functioning as a firewall, protecting those implicated from public scrutiny.
Even more troubling is the FIU’s response to whether it ensures its reports lead to enforcement on those it fingers.
The agency made it clear that it has no authority over other institutions, meaning it cannot compel other law enforcement agencies or regulatory bodies to act on their findings.
This admission effectively suggests that the FIU’s work can be ignored with impunity, rendering it a powerless entity in the fight against financial crime.
With the case of collecting fuel levies, the levies form part of a critical source of government revenue, meant to fund infrastructure and essential public services. Any manipulation or under-declaration directly impacts the national economy and, by extension, the people of Lesotho.
In the interest of transparency and public accountability, Newsday this week requested FIU to respond to the following questions:
Question 1: Findings and Actions: What were the key findings of the FIU’s analysis on this matter, and what specific actions have been recommended or taken against Tholo Energy?
FIU Response: The FIU is enjoined by law to communicate the results of its analysis to competent authorities. Consequently, such information is not for consumption by any other party outside the parameters of the law.
Question 2: Law Enforcement Engagement: Which investigatory authorities have been engaged, and what has been their response or course of action so far?
FIU Response: Kindly note that the results of the analysis conducted by the FIU are confidential information in the form of intelligence. As such, it should not be compromised in any manner whatsoever. Thus, disclosure of relevant law enforcement agencies directly impacts the very essence of the confidentiality protocols.
Question 3: Supervisory Oversight: Which supervisory bodies have been informed, and what measures have they implemented to address potential regulatory breaches?
FIU response: The same answer in Question 2 above applies.
Question 4: Transparency and Public Interest: Given the significance of this matter to public revenue, does the FIU intend to issue a public update on the case to ensure transparency and accountability?
FIU response: The FIU operates within the prescripts of the law establishing the FIU and abides by such.
Question 5: Challenges and Roadblocks: Has the FIU encountered any challenges or resistance in ensuring that appropriate action is taken against those responsible? If so, what are those challenges, and how do you plan to address them?
FIU response: Once again, kindly refer to the principles within which the FIU should operate. In this respect, whatever action is taken on account of the work of the FIU is beyond the scope of the mandate of the FIU.
Question 6: There is an argument that the duty of the FIU extends beyond merely conducting analysis and submitting reports to investigatory and supervisory bodies. Some believe that stopping at reporting alone renders the FIU largely ineffective, which is unlikely to have been the intention of the drafters of the Money Laundering and Proceeds of Crime Act of 2008. Instead, the expectation is that the FIU should take proactive measures to ensure that appropriate action is taken based on its reports.
FIU response: Whether the argument holds water is neither here nor there. What should be clear and understood is the fact that the FIU is just one of the many role players with its distinct mandate in the fight against money laundering and counter-terrorist financing. In the wisdom of the legislature, each stakeholder has a role to play and should not encroach outside its legislative mandate.
Question 7: How does the FIU ensure that the reports it submits result in tangible enforcement actions?
FIU response: The FIU is not an authority over and above other agencies, such that enforcement of compliance measures with other agencies’ mandates is a non-starter.
Question 8: Does the FIU have mechanisms to track the progress of cases it refers to investigatory and supervisory authorities?
FIU response: The FIU seeks and receives feedback on the disclosures the FIU makes. This feedback enables the FIU to assess the usefulness or otherwise of the information the FIU disseminates. On the other hand, this feedback enables the FIU to also give feedback to those who provided the FIU with information.
Question 9: In cases where no action is taken, what steps does the FIU take to escalate or reinforce the need for enforcement?
FIU Response: Please refer to the answer in the first bullet above.
Question 10: Specifically regarding the Tholo Energy case, what actions, if any, have been taken following your report to the relevant authorities?
FIU response: With due respect, refer to the mandate of the FIU as provided for under the Money Laundering and Proceeds of Crime Act No. 4 of 2008 as amended (Act No. 7 of 2016).
The Money Laundering and Proceeds of Crime Act was promulgated in to establish an Anti-Money Laundering Authority and a Financial Intelligence Unit; to enable the unlawful proceeds of all serious crimes to be identified, traced, frozen, seized and eventually confiscated; and to require accountable institutions to take prudential measures to help combat money laundering.
Anti-Money Laundering Authority, according to the act, is a juristic person responsible for the prevention, investigation, and with the consent of the Director of Public Prosecutions (DPP), prosecution of money laundering and terrorist financing offences and any other matters relating to money laundering and proceeds of crime.
The act states: “The Directorate on Corruption and Economic Offences (DCEO) established by the Prevention of Corruption and Economic Offences Act 1999 shall for purposes of this Act be the Anti-Money Laundering Authority and accordingly the Director-General of the Directorate on Corruption and Economic Offences shall be the Director-General of the Authority.”
The act further states that the FIU shall be the central agency responsible for receiving, requesting, analysing and disseminating to the investigatory and supervisory authorities disclosures of financial information;
- concerning suspected proceeds of crime and alleged money laundering offences,
- required by or under any law in order to counter money laundering; or,
- concerning the suspected financing of terrorism and terrorist property.
FIU is further given authority to, among others, receive, analyse and assess reports of suspicious transactions issued by accountable institutions, collect, process, analyse and interpret information disclosed to it and obtained by it under the relevant laws, and inform, advise and co-operate with the investigatory and supervisory authorities, following consideration of reports received, where it has reasonable grounds to suspect that a transaction involves proceeds of crime or terrorist financing or money laundering.
Authored by our expert team of writers and editors, with thorough research.
