…despite suffering successive court defeats over alleged CGM fraud
…as the fugitive Dalvi and family remain wanted by DCEO
Moorosi Tsiane
FUGITIVE former CGM Group director and alleged fraud mastermind, Madhav Vasant Dalvi, has launched yet another legal bid against textile giant Presitex, this time demanding more than M4 million through one of the shell companies that the Directorate on Corruption and Economic Offences (DCEO) alleges he used to siphon hundreds of millions of maloti from the company.
The latest application comes barely weeks after Dalvi suffered two major legal defeats in both Lesotho and South Africa, where judges delivered scathing findings against him and companies linked to his family.
In Lesotho, the Court of Appeal dismissed an appeal by Dalvi-linked Denimagic, effectively confirming earlier findings that the company was used to launder Presitex funds and steal its property. Justice Petrus Damaseb said there was overwhelming evidence of “an insidious pattern of less than transparent conduct” by Dalvi and his associates.
Just days later, the High Court of South Africa ordered the forfeiture of three Ladybrand properties linked to Dalvi after finding they were the proceeds of unlawful activities and had been used to launder money diverted from Presitex and its parent company, CGM Group. The court concluded that Dalvi had orchestrated transactions designed to enrich himself, his family and close associates while siphoning funds from the textile group.
Dalvi, his wife Sushama and son Chaitanya remain fugitives after failing to appear before the Maseru Magistrates’ Court to answer fraud, corruption and money laundering charges involving more than M700 million. They are among several accused being prosecuted by the DCEO over what investigators describe as one of Lesotho’s biggest corporate fraud schemes.
Despite those setbacks, Dalvi has now approached the Commercial Division of the High Court through Blue Platinum Enterprises FZCO, demanding M4 016 964.10 from Presitex for fabric allegedly supplied to the company.
Blue Platinum is itself one of the companies under DCEO investigation. The anti corruption body alleges it was one of several shell companies created by Dalvi to facilitate the alleged looting of nearly M1 billion from CGM Group.
According to the DCEO, on 1 December 2021, Blue Platinum, registered in Dubai, entered into what investigators describe as a sham fabric supply agreement with Presitex. Dalvi signed the contract on behalf of Presitex while his co-accused, former CGM employee Asitha Medawewa, signed for Blue Platinum.
Investigators allege the arrangement enabled Presitex to pay US$164 770.76 (about M2.99 million) to Blue Platinum, despite the company serving merely as an intermediary. They further allege fabric was shipped directly from India to Lesotho while invoices were channelled through shell companies controlled by Dalvi, allowing inflated third-party invoicing.
In papers filed this week, Blue Platinum representative, Sundeep Purohit, says the dispute arises from a sales agreement concluded on 1 December 2021, under which Blue Platinum was contracted to procure textile fabrics from India and other countries for Presitex.
According to Mr Purohit, the agreement imposed strict quality control measures governing the procurement and delivery of the fabrics.
He alleges the parties agreed that Blue Platinum Enterprises would source fabrics from countries such as India while ensuring compliance with detailed specifications relating to shades, defect levels, colour fastness, packaging, inspection reports, roll identification and shipping requirements before dispatch.
Mr Purohit says Blue Platinum fulfilled every obligation imposed by the agreement and successfully delivered the fabrics requested by Presitex during July and August 2023.
“The applicant duly complied with its contractual obligations as set out by delivering fabric at the special instance and request of the respondent during the period July to August 2023. The respondent failed to pay for the delivered fabric,” he states.
He says the outstanding debt amounts to USD247 655.10 (M4 016 964.10).
“The respondent is, in as far as it relates to the current status, indebted to the applicant in the amount of USD247 655.10 which at the current ruling exchange rates translates to M4 016 964.10, which amount is due, owing and payable and has remained unpaid,” Mr Purohit submits.
Mr Purohit further tells the court that Blue Platinum only discovered, after supplying the goods, that Presitex had been placed under liquidation because of its inability to settle its debts.
“The applicant discovered that Presitex had been placed in liquidation as a result of failure to make payment on 7 September 2023.”
Following the liquidation, Blue Platinum lodges a formal claim with the company’s liquidators on 19 October 2023.
Mr Purohit says the claim is later scrutinised and accepted in full.
“On 28 February 2024 the liquidators of the respondent accepted and approved the claim of the applicant without any reservation in the sum of USD247 655.10.”
Despite the liquidators recognising the debt, Mr Purohit says Blue Platinum has still not received payment.
“Despite demand, Presitex has failed, refused and neglected to pay the aforesaid sums of money.”
He further submits that documentary evidence, including invoices, bills of lading and shipping documents, demonstrates that all deliveries are made as requested by Presitex.
“The summary of invoices and the invoices themselves, together with documents such as bills of lading and other documents which will be tendered at the hearing, will show that the delivery as requested by the respondent was made on various dates in 2023.”
Mr Purohit also says Blue Platinum makes formal written demands for payment before resorting to litigation.
“The applicant made a written demand for payment after the respondent failed to pay in accordance with the credit agreements between the parties, but the respondent indicated in clear terms that it was not able to pay the amount.”
He reiterates that the debt remains unpaid despite being formally acknowledged during the liquidation process.
Blue Platinum is therefore asking the court to order Presitex to pay M4 016 964.10 for the fabrics supplied, interest at 18.5 percent per annum from 28 February 2024 until final payment, costs of suit, and any further or alternative relief the court considers appropriate.
CGM Group owners are currently fighting the said liquidation which they claim was one of Dalvi’s scams aimed at paralysing operations at the Thetsane factory so he could take over its operations. He had even transferred its shares to his name, but that has since been reversed by the High Court.
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