- Says financial statements of paper files compiled by Mokgethi have many errors and anomalies
In the report that has been filed with the Master of the High Court, the Chartered Accountant, Jenny Marinelli, states that the financial statements of the paper files compiled by Mokgethi have many errors and anomalies.
Punching holes in the contentious paper files, Marinelli notes: “There are basic accounting errors in that some figurers reported as brought forward from previous periods are not those reflected as carried forward in those previous periods.” In addition, she says, there are several instances where the information contained in the supporting notes is not correctly compiled in the balance sheet.
“The financial statements reflect an ‘Estate Capital Fund,’” Marinelli’s report says. “This is the value of the inventory at date of decease. This does not appear to be the case. There is no policy or note that will assist the reader to understand this line in the annual financial statements. Marinelli notes that further, the Estate Capital Fund varies from year to year with no explanation. She says if the Estate Capital Fund is indeed the inventory at date of death, she would expect to see it maintained at the value of death.
“The financial statements should reflect, separately, the impact of the trading of the Blackthread account, showing separately the movements in the share valuations and any share trading profit or losses, unless these were reported in the statement of comprehensive income,” she avers.
Marinelli says the interest from BBS notes that has been received in the BBS account until 2018 is not included in the statements of comprehensive income. She reveals that interest received in BBS for the seven years amounted to P5,404,446 plus an estimated P450,00 for the April 2016 distribution, for which (a) bank statement is not provided. The fees, she notes, charged by Blackthread of P4, 642,429 for the entire period covered do not appear to have been reported in the statements of comprehensive income.
“I am unable to reconcile the payments to the beneficiary, Shereen Pandor, as reported in the annual financial statements with the list of claims. The cumulative figure in the financial statements is P4, 780, 682,” she says. “The claims amount to P5,433,093. Ms Pandor has a signed statement that she has received P5,255,493 plus P137,600. On the basis of the information I have been given the claims made and received by Mrs. Pandor (Joseph’s daughter) amount to P5,433, 093.”
Marinelli adds that no authority from the Master for these payments to Ms Pandor was provided to her. “There are legal fee invoices for Motlhagodi and Company amounting to P2,413,896,” the Chartered Accountant points out. “I do not see these included in the annual financial statements as a cost or as an advance, in the event that they are permissible estate costs authorised by the Master.
“I do not see any income from any farming activities, I do not see any income from the shop and bar, and I do not see any information pertaining to the submission of the estate tax returns. With the above errors and omissions, I am unable to use the annual financial statements as any form of accounting for the estate.”
According to Marinelli, the two files of papers compiled by Mokgethi were inadequate in that there were many missing, illegible, redacted or inadequate documents. The Stanbic Bank statements for the period prior to 1st August 2013 are not in the file. There are some provisional statements for the period 4 January 2012 to 31 December 2012 (but) these do not have sufficient information.
“There are no Stanbic Bank statements for the period 31 December 2012 to August 2013,” she notes. “The copy of the Stanbic Bank statement for 31 August 2018 had been partially copied with the transactions on the bottom of the page cut off.” (A) copy of the bank statement for 27 September 2019 has also been partially copied with the transactions on the bottom of the page also cut off. “Mr Joseph’s ABSA (formerly Barclays Bank of Botswana) bank account from date of decease to date with supporting documentation are required as none has been provided. There is no information on the BBS account from date of decease to 1 October 2012.”
Regarding African Alliance Fund, Marinelli’s report points out that no statements were provided in the entire period while disbursements to Shereen Pandor are vague, in many instances, improbable and wholly unsubstantiated. “There are duplications in some costs claimed,” it says. “Several claims do not add up arithmetically, several claims are dated subsequent to the disbursement or the bank instruction date.”
The Chartered Accountant says legal fees paid from the estate: “Some are supported by a fee note, some a proforma fee note and others just a payment instruction. The total of the legal fees is P3,307,202.95 included in the legal fees is P1,180,994.38 charged in respect of the administration of the estate by Motlhagodi and Company.
“As the value of the estate has not been established, it is difficult to estimate what the regulated executor fees would be but if I apply the inventory as presented in page 387 of the bundles, the fee is calculated at P270,542 … “I’m unable to determine whether any of these fees are a cost of the estate. I have not been provided with the Master’s authorisation of the payment of legal fees.” Marinelli says she requires details of the estate bank account opened by the executrix (Mokgethi) and direct access to all banking accounts as well as signing mandates for all banking accounts.