- Fanourakis was arrested and charged for money laundering and contravening the Income Tax Order
- E 226 million should have been subjected to payment of income tax to the Eswatini Revenue Service
- The noble thing to do would have been to withdraw himself from public office
Mbabane-There are calls by scholars in Corporate Governance for Mtfongwaneni’s Member of Parliament, Roy Fanourakis to recuse himself from public office while his tax evasion case is still in court.
In January Fanourakis was arrested and charged for money laundering and contravening the Income Tax Order totalling E 226 million.
He was charged with seven counts of contravening the Income Tax Order and one count of breaching the Money Laundering and Financing of Terrorism (Prevention) Act of 2011. In that on or about the tax years 2014 to 2020, at or near Manzini being the Director of accused number two (Unionlet Property Limited), he did unlawfully file returns declaring that the company had not received any income during that period.
It is alleged that in 2015 the company received an income amounting to E 41 119 485.46. For the period 2016 he received E36 000 000.00, for the period 2017, he received E 23 000 000.00. For the period 2018 he received E 58 million, for the period 2019 he received E 18 million and for the period 2020 he received E 2 million as he underdeclared that the company had an income of E 300 000 that year.
The income should have been subjected to payment of income tax to the Eswatini Revenue Service
During his appearance at the Manzini Magistrates Court, Fanourakis pleaded not guilty. The former Minister said “I submit that I am innocent of the charges levelled against me and I plead not guilty to them. Actually, once evidence is led in the matter (if it goes to trial) I am sure that I will be acquitted.”
After an urgent bail application was made before Judge Maxine Langwenya, the Mtfonwaneni MP was ordered to pay E 15 000. An amount of E 5 000 was paid in cash and a surety was provided for the balance. Fanourakis is represented by Linda Dlamini of Linda Dlamini and Associates.
But certain observers who tout the principles of corporate governance are arguing that it is not enough for a person of Fanourakis’s stature to merely plead not guilty and leave it there. They are of the view that the noble thing to do would have been to withdraw himself from public office. Not only is Fanourakis a Member of Parliament but he is also head of a portfolio committee in the August House. Fanourakis is also a member of the Public Accounts Committee that is responsible for the oversight of public money in government.
They point out that before a Member of Parliament is sworn in, he gets vetted and one of the first things that are ascertained is whether he or she is fully compliant with the tax laws of the country. Therefore, during the five-year period that he or she is in office, they should uphold the law. The seriousness of the charges that have been preferred on the legislator are such that he should have done the noble thing. Failing which, the Speaker should have called the MP to his chambers and tried to determine the reason behind the charges.
Giving clarity on the matter, the Speaker of the House of Assembly, Petros Mavimbela said “I did get wind of the matter however there has been no one who has brought anything to my office formally, therefore in the absence of such a communique there isn’t much that I can do.”
However, observers feel that such an explanation cannot cut it in view of the fact that at this present time there are some candidates for positions in the Senate who were disqualified in September 2021 because they were alleged to have failed to comply with tax requirements. Their matters are currently before the courts.
In actual fact the High Court of Eswatini has stopped the Senate elections pending finalization of one of the candidates application to set aside the decision to disqualify him from the race. Judge Nkosinathi Maseko, ruled that the elections would proceed after the court has heard and determined his application,
Another one of the candidates was disqualified for owing the SRA an amount of E36 in respect of graded tax. The disparity in the amounts of tax owed by the aspiring Senator and that which allegedly has not been paid by Fanourakis conveys the gravity of the case that the Mtfongwaneni MP is facing.
When sought for legal advice on this matter, the Attorney General, Sifiso Khumalo stated that “in this case the rule of law to the effect that one is innocent until found guilty must apply.” Khumalo indicated that there is no law that compels Fanourakis to recuse himself from any public position while his court case is still in progress.
In neighbouring South Africa, we have seen corporate governance principals being applied to many politicians who have been forced to step aside from public office even before allegations go through the complete court process. Just last year the former Minister of Health Zweli Mkhize was forced to relinquish his position as a minister after it was revealed that the Digital Vibes company entrusted with a multi-million Rand communications contract had the money diverted into the pockets of Mkhize and his family.
Eliminating tax evasion has been a major focus of the UK Government in recent years. The Government’s stated intention is that there should be “no place to hide” for tax evaders, and it is seeking to achieve this by increasing the severity of sanctions for tax evaders and punishing those who facilitate people in evading tax among other penal measures.
It seems as if those calling for more transparency in the corporate governance space in Eswatini will have to exercise more patience and wait until a suspect is convicted before firm action can be taken.