Staff say they can't authorize any transactions. Clients can't open accounts. But the newcomer remains in suspended animation at the center of a political tussle.
Eswatini : The Central Bank in a Tiny Africa n Country Tried to Block a Suspicious Banking Venture. Then the King's Allies IntervenedStaff say they can't authorize any transactions. Clients can't open accounts. But the newcomer remains in suspended animation at the center of a political tussle.
Leaked documents capture multiple contradictions that played out in the Farmers Bank saga between a central bank designed to be independent and ensure financial probity and an opaque and unaccountable monarchy. They tell the story of how the CBE was alarmed by a litany of discrepancies in Farmers Bank's application for a banking license, and in trying to put the brakes on the process, the CBE ran up against the political interests of King Mswati III and his associates.
The EFIU obtains so-called suspicious transaction reports, or STRs, from banks and financial institutions and uses that information to provide financial intelligence to Swazi and international authorities. Its task is to identify, monitor and investigate suspicious financial transactions, but its investigative powers are tightly circumscribed, and in most cases it cannot subpoena witnesses, conduct interviews or gather intelligence.
The thought of a new bank opening in Bulembu provoked the curiosity of local media. One journalist who traveled to the town asked in an article:"what is a bank doing in the sleepy town with virtually no activity to attract banking business?" The origin of Farmers Bank, however, starts before Rijkenberg was appointed finance minister in late 2018, and there were signs that the bank was beginning the process to enter the Eswatini market in late 2016 or early 2017. This finding is from a 2022 report by the New York-based financial and risk advisory firm Kroll, which was commissioned by the CBE to review Farmers Bank's application for a banking license.
"When we talk of the Swazi economy we can say the king himself is the economy, because Swaziland is emblematic of a country where the entire economy is actually captured by royal interests," said one Swazi human rights activist who asked not be named for fear of retribution. But that building, under construction at the time, was owned by South African property company Dynarc, via a related company. Dynarc's financial director, Vanessa Blom, told ICIJ that Equity Check Capital, a company that listed John Asfar's brother as its sole director, was going to lease a large portion of the building. Blom says Dynarc mostly dealt with John Asfar and that neither Equity Check nor Farmers Bank ended up moving into the building.
In a long letter to ICIJ, John Asfar didn't respond to any of the specific questions ICIJ posed to him for this story but wrote that"For the record, 99.99% of each question/subject is a false narrative" and that the story ICIJ was planning, as he discerned it, was"financial terrorism.
Two days after its license was revoked, Farmers Bank notified Rijkenberg of its intention to appeal. According to media reports, when the appeal was lodged, Rijkenberg, who as finance minister would normally have heard the appeal, recused himself. He appointed the minister of commerce, industry and trade, Manqoba Khumalo, to adjudicate the matter.
The CBE objected to the"procedural improprieties" used for the appeal, specifically that"the appeal was conducted in the absence of the regulations governing the process" — a claim backed up by the Kroll report.
Bank statements reflect various payments involving Rijkenberg and the nonprofit he founded, Bulembu Ministries, and entities linked to Farmers Bank. The payments were relatively small but showed a link between the finance minister and those behind the bank. Bank statements from 2019 to 2021 show that both Worldwide Capital and Pentillion — two of the companies tied to the Asfars — made multiple payments of differing amounts to Bulembu Ministries. These were usually worth a few hundred dollars .
The transaction was referred to Eswatini's Anti-Corruption Commission for investigation. In a May 2020 report, years after the Usutu transaction was first reported, the commission noted that the matter was still"under investigation" and that Usutu was thought to be a conduit for the Royal Eswatini Police Service to procure"investigative tools."
Farmers Bank's coyness about the identity of who owned and controlled it, and about the source of its funding, only fueled suspicion at the CBE. At first, when it applied for its license, the bank did not specify the origin of its funding, which the central bank inferred from the included financial statements would come from its ultimate parent company, Tetrillion. But the CBE wanted to know more.
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