MASERU — A Taiwanese national who stole a textile company from Basotho entrepreneurs with the help of a local lawyer was on Tuesday found guilty of fraud.
High Court judge, ’Maseshophe Hlajoane, found John Leu guilty of fraudulently taking over Lesotho Precious Garments from Basotho shareholders.
Leu will be sentenced next Monday.
Leu had earlier won a civil case that had been brought against him by the other directors from whom he allegedly stole the company.
He won the civil case on a technicality.
It is however the manner in which he manoeuvred to steal the company that is more interesting.
Most of the details of how Leu stole the company emerged in the civil case judgment that formed the basis of the criminal case.
In that case Leu’s chief’s accomplice, Mamocha Moruthane, who is a lawyer by profession confessed to have helped him steal the company.
Moruthane was however not charged.
Moruthane confessed that she helped Leu to cheat Basotho shareholders of the garment factory because she hoped that Leu would accommodate her in the company.
Moruthane had a power of attorney from the directors who included Leu to register Lesotho Precious Garments but later after the company’s registration she collaborated with Leu to kick out the other directors.
The company was registered in October 1998 with Moruthane as one of the directors together with her brother Thulare Moruthane.
The other directors included the Lets’oara brothers Makhamise and Sebala and Dr Ts’iu Makakole.
However Leu and Moruthane turned against the other four directors and connived to take over the company illegally.
Moruthane had helped Leu gain control by producing a letter that said the Basotho directors were selling their shares to two Taiwanese, Pai Yun-Hsin and Tsai Chu Hsia.
The signatures on the letter were forged.
The other directors did not know anything about the so-called sale to Yun-Hsin and Hsia.
The letter was sent to the registrar of companies who removed the other four as directors of Lesotho Precious Garments and replaced them with the fraudulent Taiwanese nationals.
The fraudulent transfer of shares was done in 1999.
The court heard that the purported transferors had not signed any document.
Moruthane prepared the documents to which there were no witnesses to the transferors.
Moruthane had only shown Makhamise Lets’oara as a transferee who had witnesses.
Chun-Hsia who was shown as buying shares had not signed the document.
Moruthane confessed that she did not even know who this Tsai Chun-Hsia was.
She also told the court that she did not know who Pai Yung Hsia was as well.
She admitted that she did not have authority from the directors to act as she did.
The documents, Moruthane confessed, were fraudulent and the registrar of companies issued share certificates to the fictitious Hsias as a result of the alleged transfers.
Moruthane had signed share certificates as company secretary. She told the court that she falsely claimed to be secretary.
At one time Leu gave her documents that said the directors had resigned and were to be replaced by new ones, and she signed them.
There was never a meeting of shareholders to appoint Leu as managing director of Lesotho Precious Garments.
She told the court that the directors never purported to sell their shares.
In an interview, Makhamise Lets’oara told the Lesotho Times that when they started the company they did not have funds and Leu said he could source money from his Taiwanese friends and they agreed.
He said Leu managed to attract investment from Taiwan to help Lesotho Precious Garments start operations but he also fraudulently kicked them out of the company.
“We believed him because being a Chinese who had experience in the textile industry and export to the US he was acquainted to many people in this trade,” he said.
“We were not aware that he was planning to cheat us,” he said.
Lets’oara said they believed Moruthane as a lawyer and shareholder in this company would safeguard their interests.
“We were only disappointed when we discovered that she had connived with this Taiwanese to cheat us, including his brother,” he said.
Lets’oara said Leu arranged with the now defunct Lesotho Hawk textile company to train them.
Lets’oara and some of the directors worked temporarily at the Lesotho Hawk.
Moruthane told the court that she received allowances while she was working at the Lesotho Hawk.
Moruthane confessed in court that Leu said he would cover her expenses since the Lesotho Precious Garments had not started operations.
During that time, Leu allegedly said he would provide the capital though it was to be strictly between them.
Leu had agreed to accommodate her in the company.
She said Leu told her that he had a huge order from overseas but did not wish to register a new company other than Lesotho Precious Garments.
She told the court that things she did were surreptitious.