E-fuel fraud claims burst open in court

CHARGES that a director of a company that was contracted to install electronic vehicle-identification systems in Government cars has been committing fraud to the tune of hundreds of thousands of dollars burst into the open in the High Court in Windhoek yesterday.

A former NBC television journalist and Air Namibia spokesperson, Esau Mbako, is at the centre of the claims of fraud made in an urgent application that was heard by Acting Judge Reinhard Toetemeyer yesterday. Mbako is alleged to have admitted to his business partners in South Africa that he misappropriated N$1,1 million from their joint venture.Mbako is in return claiming that this admission was extracted from him under duress.In a sworn statement in which he answers to allegations made against him, he confirmed, however, that the company of which he was a director until March 13, AFS Group Namibia, had submitted fictitious invoices to the tune of N$1,28 million to the Government Garage, and that payment was received on these fictitious invoices.In the application heard by Acting Judge Toetemeyer yesterday, AFS Group Namibia is asking for an order freezing Mbako’s assets and directing First National Bank of Namibia to give the company access to all information from two bank accounts and a home-loan account that Mbako has with the bank.Acting Judge Toetemeyer granted an interim order in terms of which the bank has to give the company access to information on the accounts.A company of which Mbako is a director and in which he has a share, Space Holdings (Pty) Ltd, has a 30 per cent stake in AFS Group Namibia, with a South African company, Automated Fuel Systems Group (Pty) Ltd, having the remaining 70 per cent shareholding.A director of AFS Group Namibia, Mark Culverwell, who is also the Chief Financial Officer of AFS Group, told the court in an affidavit that AFS Group Namibia had been awarded a tender to supply 3 000 so-called e-fuel units to the Ministry of Works, Transport and Communication for installation in Government vehicles.Some 2 300 of these units have been fitted so far, according to Culverwell.E-fuel units are “referred to as a Vehicle Identification Unit, which is fitted to a vehicle,” Culverwell explained in his affidavit.”Automated Fuel Systems Group then pre-programs an electronic chip, which is embedded in the unit.This chip, via an antenna, which is fitted in the fuel-inlet pipe of a vehicle, transmits a signal to corresponding technology at a fuel station, which is fitted to the fuel nozzle of a fuel pump.Fuel will only be released into the vehicle on validation with the chip details, which in turn has the details of the vehicle embedded in it.This device thus achieves secure fuelling.”AFS Group Namibia’s contract with Government also included the provision of maintenance and supply or repair of technology associated with the units, and the cost of this service may amount to about N$65 000 a month on average, Culverwell states.All invoices for the service provided by the company are generated in South Africa, he declared.Mbako’s responsibility as Namibian-based director of the company included collecting cheques due to the company at the Government Garage and depositing these into the company’s account.Last month, however, First National Bank alerted Culverwell’s office that Mbako had tried to deposit a cheque made out to the company into his personal bank account.His office launched an investigation, and established that numerous cheques due to AFS Group Namibia had already been paid into Mbako’s personal account in the past.So far they have been able to establish that these allegedly fraudulent deposits amounted to some N$1,42 million in total, Culverwell claims.He alleges that during a meeting with Mbako in Cape Town on March 13, Mbako admitted that he had misappropriated N$1,1 million from the company.During his investigation of the matter, he further established from discussions with Ministry of Finance officials and clients of the company in Namibia that Mbako had issued fictitious invoices purporting to be invoices of the company, and had presented them to the Government Garage for payment, Culverwell is also alleging.These do “not reflect goods sold by the (company) to the Government Garage,” he stated.Copies of Bank of Namibia cheques made out to AFS Group Namibia for the Government Garage, which Culverwell also placed before the court and which Mbako is alleged to have deposited into his own account, show that the dates of these range from as early as February 2004 to as late as November 2005.An allegedly fictitious invoice for the supply of 467 vehicle-identification units, in the total amount of N$537 050, which has also been revealed to the court, is dated December 23 last year.In an affidavit answering to Culverwell’s statement, Mbako said that “not all payments made by Government Garage were due and payable to” AFS Group Namibia.”The amount paid on the basis of fictitious invoices amounts to N$1 280 740,31, and the amount paid on bona fide invoices amounts to N$780 783,14,” he also stated.Mbako did not outright deny that he had paid the company cheques into his own account.He admitted the allegation that he had made up fictitious invoices and presented these to the Government Garage, but denied that any payment had been made on the invoice for N$537 050 that was disclosed to the court.The case is set to return to court on Tuesday next week for a further hearing of arguments.Mbako is alleged to have admitted to his business partners in South Africa that he misappropriated N$1,1 million from their joint venture.Mbako is in return claiming that this admission was extracted from him under duress.In a sworn statement in which he answers to allegations made against him, he confirmed, however, that the company of which he was a director until March 13, AFS Group Namibia, had submitted fictitious invoices to the tune of N$1,28 million to the Government Garage, and that payment was received on these fictitious invoices.In the application heard by Acting Judge Toetemeyer yesterday, AFS Group Namibia is asking for an order freezing Mbako’s assets and directing First National Bank of Namibia to give the company access to all information from two bank accounts and a home-loan account that Mbako has with the bank. Acting Judge Toetemeyer granted an interim order in terms of which the bank has to give the company access to information on the accounts.A company of which Mbako is a director and in which he has a share, Space Holdings (Pty) Ltd, has a 30 per cent stake in AFS Group Namibia, with a South African company, Automated Fuel Systems Group (Pty) Ltd, having the remaining 70 per cent shareholding.A director of AFS Group Namibia, Mark Culverwell, who is also the Chief Financial Officer of AFS Group, told the court in an affidavit that AFS Group Namibia had been awarded a tender to supply 3 000 so-called e-fuel units to the Ministry of Works, Transport and Communication for installation in Government vehicles.Some 2 300 of these units have been fitted so far, according to Culverwell.E-fuel units are “referred to as a Vehicle Identification Unit, which is fitted to a vehicle,” Culverwell explained in his affidavit.”Automated Fuel Systems Group then pre-programs an electronic chip, which is embedded in the unit.This chip, via an antenna, which is fitted in the fuel-inlet pipe of a vehicle, transmits a signal to corresponding technology at a fuel station, which is fitted to the fuel nozzle of a fuel pump.Fuel will only be released into the vehicle on validation with the chip details, which in turn has the details of the vehicle embedded in it.This device thus achieves secure fuelling.”AFS Group Namibia’s contract with Government also included the provision of maintenance and supply or repair of technology associated with the units, and the cost of this service may amount to about N$65 000 a month on average, Culverwell states.All invoices for the service provided by the company are generated in South Africa, he declared.Mbako’s responsibility as Namibian-based director of the company included collecting cheques due to the company at the Government Garage and depositing these into the company’s account.Last month, however, First National Bank alerted Culverwell’s office that Mbako had tried to deposit a cheque made out to the company into his personal bank account.His office launched an investigation, and established that numerous cheques due to AFS Group Namibia had already been paid into Mbako’s personal account in the past.So far they have been able to establish that these allegedly fraudulent deposits amounted to some N$1,42 million in total, Culverwell claims.He alleges that during a meeting with Mbako in Cape Town on March 13, Mbako admitted that he had misappropriated N$1,1 million from the company.During his investigation of the matter, he further established from discussions with Ministry of Finance officials and clients of the company in Namibia that Mbako had issued fictitious invoices purporting to be invoices of the company, and had presented them to the Government Garage for payment, Culverwell is also alleging.These do “not reflect goods sold by the (company) to the Government Garage,” he stated.Copies of Bank of Namibia cheques made out to AFS Group Namibia for the Government Garage, which Culverwell also placed before the court and which Mbako is alleged to have deposited into his own account, show that the dates of these range from as early as February 2004 to as late as November 2005.An allegedly fictitious invoice for the supply of 467 vehicle-identification units, in the total amount of N$537 050, which has also been revealed to the court, is dated December 23 last year.In an affidavit answering to Culverwell’s statement, Mbako said that “not all payments made by Government Garage were due and payable to” AFS Group Namibia.”The amount paid on the basis of fictitious invoices amounts to N$1 280 740,31, and the amount paid on bona fide invoices amounts to N$780 783,14,” he also stated.Mbako did not outright deny that he had paid the company cheques into his own account.He admitted the allegation that he had made up fictitious invoices and presented these to the Government Garage, but denied that any payment had been made on the invoice for N$537 050 that was disclosed to the court.The case is set to return to court on Tuesday next week for a further hearing of arguments.