SUMMARY: Practice—criminal appeal---appeal against the decision of the magistrate court to discharge the respondents at the close of the Crown case----principles applicable when evaluating evidence at this stage restated----the respondents having been discharged on the basis that the Lesotho Revenue Authority (LRA) had usurped the prosecutorial powers of the Director of Public Prosecutions(DPP) when it preferred charges against the respondents for contraventions of the fiscal and revenue-related provisions of the Money Laundering Act 2008, Penal Code Act no.6 of 2010, Prevention of Corruption and Economic Offences Act no.5 of 1999.
HELD, that the court a quo erred and misdirected itself when it adjudged the LRA to have usurped the prosecutorial powers of the DPP when it preferred charges and prosecuted the respondents in respect of contraventions relating to the provisions of the above-mentioned Acts.
IN THE HIGH COURT OF LESOTHO
HELD AT MASERU
In the Matter Between:-
NALA CAPITAL ADVISORS (PTY) Ltd 1ST RESPONDENT
RETŠEPILE JOSEPH KHENQOA ELLIAS 2ND RESPONDENT
CORAM : HON. ACTING JUSTICE M. MOKHESI
DATE OF HEARING : 11 DECEMBER 2018
DATE OF JUDGMENT : 21 MARCH 2019
Criminal Procedure and Evidence Act no.7 of 1981
Money Laundering Act of 2008
Prevention of Corruption and Economic Offences Act no.5 of 1999
Penal Code Act no.6 of 2010
Income Tax Act no.9 of 1993
R v Manyeli C of A (cri) 14/2007
DPP,Limpopo v Mokgotho (068/2017)  ZASCA 159 (24.11.2017)
R v Motsamai C of A (cri) no.21/2009  LSCA 32
Abubaker and Others v Director of Public Prosecutions C of A (cri) 3/2014 LSCA 29
National Iranian Tanker Co. v MV Pericles GC  ZASCA 145
The Lesotho Revenue Authority and Others v Dichaba Moutloatsi and Others C of A No.21/2018 (dated 01 /02/2019)
AS PER MOKHESI AJ
 This is an appeal against the decision of the Magistrate Court to discharge the accused at the close of the Crown’s case. The first accused is Nala Capital Advisors (juristic person), and the 2nd accused is Retŝepile Joseph Khenqoa Elias, who is its director. The two accused had faced an array of charges – thirty-four in total – which were at the commencement of the trial whittled down to seven charges, namely:
Count 25: Contravention of section 188 (1) (a) or (b) of the Income Tax Act No. 9 of 1993 read with section 188 (2) of the same Act.
Count 26: Contravention of section 25 (1) (a) and (i) of the Money Laundering Act of 2008, read with section 25 (2) of the same Act.
Count 27: First Alternative to Count 26:
Contravention of section 30 of the Prevention of Corruption and Economic Offences Act No. 5 of 1999 read with section 34 as amended.
Count 28: Second Alternative to Count 26:
Contravention of section 68 (1) of the Penal Code Act No. 6 of 2010.
Count 29: Third Alternative to Count 26:
Contravention of section 128 (i) read with section 175 (1) of the Income Tax Act No. 9 of 1993.
Count 30: Contravention of section 128 (1) read with section 175 (1) of the Income Tax Act No. 9 of 1993.
Count 31: Contravention of section 61 (1) (b) of the Value Added Tax Act No. 9 of 2001.
 The learned Magistrate had discharged the accused on two bases, viz, that, firstly, the Lesotho Revenue Authority (LRA) does not have power to investigate, charge, and prosecute offenders for infraction of the provisions of the Money Laundering Act (count 26), the Prevention of Corruption and Economic Offences Act (1st alternative to count 26) and the Penal Code Act (2nd alternative to count 26). Secondly, as regards counts 25, 29, 30 and 31 the learned Magistrate ruled that the Crown did not adduce prima facie evidence of the commission of these offences by the accused.
 Discharge of the accused at the close of the Crown case is governed by the provisions of section 175 (3) of the Criminal Procedure and Evidence Act No. 7 of 1981 which provides:
“If, at the close of the case for the prosecution, the court considers that there is no evidence that the accused committed the offence charged in the charge, or any other offence of which he might be convicted thereon, the court may return a verdict of not guilty.”
 It is trite that the applicable test in terms of this provision is whether at the end of this crown’s case, there has been adduced evidence upon which a reasonable court fully apprised of the evidence might convict the accused, not ought to, convict the accused, or any competent verdict thereof (Rex v Manyeli C of A (CRI) 14 of 2007 at para. 15). The question whether the accused’s explanation is reasonable or not does not arise at this stage. I will deal with this issue in due course. The view I have taken of this matter is that the appeal should succeed and the matter be remitted to the court a quo. Because of the position I have taken of this matter, I will not engage in detailed evaluation of evidence led, in an effort to avoid being preemptive of the decision the court a quo will make on remittal hereof.
 The crown case is anchored on oral evidence of a single witness, Mr. Daniel Rami Rantoa who is a Tax Investigation Specialist at Lesotho Revenue Authority, and a cache of documentary evidence which was admitted into evidence by consent of the parties.
 The factual matrix of this case has its genesis in the awarding of a logistics and services contract to an entity known as Advanced Business Solutions (PTY) Ltd Joint Venture (ABP), by the Ministry of Home Affairs during the year 2013 in respect of His Majesty the King’s birthday celebrations. In the immediate aftermath of being a successful bidder, ABP concluded an agreement of cession with accused 1 (Nala Capital Advisors) in terms of which ABP ceded all the rights and title and interest in the amount due under contract, to the first accused. The amount due under the contract was five Million two hundred and seventy one thousand twenty five Maloti – (M5, 271,025). After successful performance of contract by ABP the Ministry of Home Affairs duly paid the monies due under the contract into the bank account of Nala Capital Advisors. Accused 2, consequent thereto submitted its claim for withholding tax to the Lesotho Revenue Authority (LRA). The amount claimed evinced that the amount claimed exceeded the income declared by accused 2 to LRA when filing tax returns for the year 2013/2014. A withholding tax is the money which is calculated and statutorily set at 5%. This an amount which the payer withhold from the payment to payee if the payee is a Lesotho registered company or individual. It applies to all payments exceeding M3, 000.00. The payee only gets 95% of the due payment and at the time for filing income tax returns and financial statement the withholding tax certificate is then attached to the filings showing that 5% withholding tax had been paid. This 5% withholding tax serve the purpose of either offsetting the payee’s liability to LRA or she can claim it.
 PW1 testified that on 03 September 2014 while the 1st accused was still awaiting the withholding tax certificate from the Ministry of Home Affairs, it wrote a letter to the Lesotho Revenue Authority requesting its permission to submit its annual financial statement pending the said certificate. The amount indicated on the certificate is M253,551.25.
On one hand when Nala Capital Advisors filed its tax returns it reflected its income as M825,815.00, an amount which is clearly not in consonant with the amount reflected in the withholding tax certificate. If the withholding tax certificate reflected an amount indicated above the correct income to be declared should have been M5,271,025.00.
PW1 testified that his investigations positively established that Nala Capital rendered services to the Ministry of Home Affairs for the amount of M5,071,025.00 on top which the Lesotho National Insurance Group paid M200,000.00 as contribution to the amount which the Ministry of Home Affairs paid to the 1st accused, bringing the total amount to M5,271,025.oo.
 Confronted about the apparent discrepancies, accused 1 produced a written agreement between him and two partners in terms of which it is said accused 1’s share was M825,815.00. In terms of an instruction to Nedbank (dated 10 January 2014), the bank is instructed to pay the following individuals, ABP an amount of M769,626.00, Refiloe Martin Mokone an amount of M1,234,111.00, Nala Capital Advisors (PTY) Ltd to retain the balance in its bank account, once an amount of M5,271,025.00 which emanate from the Ministry of Home Affairs is credited into the accused 1’s account.
When transfers were eventually made the amount different from the ones indicated in the letter of instruction were made, viz,
Mokone got M1,142,111.00
ABP got M745,626.00
Nala Capital (A1) retained an amount of M3,383,288.00.
In view of these discrepancies, the LRA further sought explanation from the accused’s accountant regarding these apparent discrepancies. Significantly, Trusthouse Consult (PTY) Ltd (accused’s accountant) opines, under the heading “Income Recognition for the Year Ended 31 MARCH, 2014” (in relevant part)
“We were able to establish that in line with the major drive of NALA, they assisted in capital raising and financial mitigation for a project contract secured by another company, ABP. We recognized that the execution of the job obtained by the major contractor – ABP from Ministry of Home Affairs, our client, NALA concluded a cession of payment from ABP, in order to mitigate against default by ABP of repayment of capital raised from various parties using a “power of attorney”. Hence NALA did not issue any invoice with respect to the sum transferred to their bank statement rather it was paid into their account by the power of attorney executed to NALA by ABP through cession of payment”.(emphasis provided)
Contrary to the assertion that NALA Capital did not issue invoices, the latter had indeed issued invoices to the Ministry of Home Affairs. The LRA concluded from the explanation given by the accountants and other surrounding facts that the accused had rendered services to the Ministry of Home Affairs. PW1 testified that A1’s undeclared income is M2, 557,473.00. PW1 further intimated that the accused did not file any income tax returns for the year 2015/2016. With this brief factual background in mind I proceed to deal with the issues which arise for determination in this matter.
 (i) Proper approach to evaluating evidence at the stage of discharging the accused at the close of the Crown case.
It is apposite to deal with the manner in which the learned Magistrate invoked the test applicable at this stage. In his ruling he says;
“Did the accused receive the amount of M5,271,021.00 on their own behalf and for their own benefit? I submit not. The explanation that the accused made to LRA in their meetings and indeed in their defence put to crown witness, which explanation the investigator failed to follow up, is reasonably true. The crown has failed to prove a prima facie case against accused.” (emphasis provided)
It is plainly clear from this except from the judgment of the learned Magistrate that he got the approaches to evaluating evidence at this stage muddled up, and in the result used the test which is inapplicable at this stage of the proceedings. The test applicable at the close of crown case is whether the state has adduced a prima facie evidence of commission of the offence charged upon which a reasonable court might convict. The prime focus of the evaluation is on the crown evidence because it is the only one adduced at the stage, and the only one to be subjected to the test stated above. The statements of the accused put to the witnesses during cross-examination should not and cannot be equated with evidence. It follows that reasonableness of the explanation of the accused does not arise at this stage as the accused has not as yet testified. This is trite as several judicial pronouncements on the issue are legion;
In DPP, Limpopo v Mokgotho (068/2017) [ 2017] ZASCA 159 (24 November 2017) the following was said:
At para. 35
“It is of course correct that a trial court, in determining the guilt or innocence of an accused, may have regard to an accused’s statement in substantiation of his or her plea of not guilty. And that a court must consider both the incriminatory and exculpatory material of the plea explanation…… But what a trial court is not permitted to do is to equate the exculpatory material of a plea explanation and questions put to state witnesses with an accused’s version when in fact they are clearly not. (See S v Mjoli and Another 1981 (3) SA 1233 (A) 1238 C – E and 1247 H – 1248 A) The court below merely glossed over the fundamental issue raised by the State in its application for reservation of a question of law. In so doing, it ignored the most elementary principle applicable in a criminal trial in determining the quilt or innocence of an accused in instances where such an accused has not testified.” ( emphasis provided)
In R v Motsamai (C of A (CRI) No. 21/09  LSCA 32 (22 October 2010) ar para. 11 Smalberger JA (as he then was) said:
“ A further feature of the trial Judge’s judgment is that she appears to equate the accused’s version of events as put to the crown witnesses under cross-examination to evidence by the accused. There is a significant difference in the legal effect of what is put under cross- examination in that respect, as opposed to evidence actually given under oath. Only when the accused has given evidence, and been subjected to cross-examination, can his evidence properly be evaluated and weighed up against that of PW1.”
 (ii) Competency of the Lesotho Revenue Authority to investigate and prosecute individuals for offences emanating from contravention of the provisions of Money Laundering Act, Prevention of Corruption and Economic Offences Act( hereinafter ‘the Corruption Act’) and Penal Code
When the learned Magistrate discharged the accused in respect of the above-mentioned statutes he reasoned that the LRA being a creature of statute, its area of operation is limited to Customs and Excise Act 1982, Income Tax Act 1993 and VAT Act 2001.
The appellant attacked the court a quo’s judgment on the basis of interpretation. The crown’s argument is that the LRA is given power to investigate and enforce tax-related laws stated above, and that the power to investigate and prosecute fiscal infractions stemming from Money Laundering Act, Penal Code and Corruption Act are reasonably incidental to the proper carrying out of the powers conferred on the LRA by the empowering Act (the LRA Act), and therefore the LRA should be taken to have been empowered to investigate and prosecute in relation thereto.
It is without doubt that the LRA has been statutorily created, and therefore its power to investigate or prosecute whenever the statutes in question have been contravened can only come from the statute creating it or from any statute which specifically provides for such power. In terms of the Lesotho Revenue Authority Act 2001 read with Customs and Excise Act No. 10 of 1982, the LRA has been endowed with wide and extensive investigative powers in addition to its core function of assessment and collection of fiscal revenue. These extensive powers are in line with the recognition that the LRA has a special expertise to investigate and unearth these type of matters (see: Abubaker and Others v Director of Public Prosecutions C of A (CRI) 3/2014 LSCA 29 (24 October 2014).
What seemed to have caused discomfort to the court a quo is LRA’s prosecutorial powers. It is to this issue that I turn. Prosecuting authority is vested exclusively in the Director of Public Prosecutions (DPP) by section 6 (3) of the Criminal Procedure and Evidence Act No. 1 of 1981. The same section, however, empowers the DPP to delegate his or her powers (section 6 (1) of Criminal Procedure and Evidence Act). Section 6 (2) also empowers the DPP to retain counsel for purposes of conducting any criminal proceedings.
 Money Laundering and Proceeds of Crime Act of 2008.
When this Act was enacted in 2008 it established, in terms of section 11 (1) of the said Act, what was called Anti-Money Laundering Authority. This Authority was vested with investigative powers. It was empowered to investigate money laundering, terrorism financing matters, and any matters incidental thereto. However, in terms of section 11 (4) of the same Act no prosecution under the Act should be instituted without the consent of the Director of Public Prosecutions.
Section 11 was amended by section 5 of Money Laundering and Proceeds of Crime (Amendment) Act, 2016. Section 5 of the Amendment Act introduced what is called ‘competent authorities’. These competent authorities are empowered to investigate, prevent and with the consent of the DPP prosecute money laundering and related offences. Under section 3 of the same Amendment Act, competent authorities are:
Of the three competent authorities only the DCEO and LRA are empowered to prosecute money laundering offences, but they may only do so with the consent of the DPP. In relation to the offences emanating from Money Laundering Act, it is not clear where the court a quo draws its conclusion that the LRA prosecutors usurped the DPP’s prosecutorial powers. It has not been established as a fact the LRA prosecutions were not delegated powers to prosecute. This could have easily been established. But since the issue whether or not the DPP had consented was not argued in the court a quo, it therefore, does not arise in these proceedings. I do not think for a moment that an institution such as the Lesotho Revenue Authority would be so remiss to prosecute without due delegation from the DPP. I therefore conclude that the court a quo erred and misdirected itself in concluding that the Lesotho Revenue Authority has no power to prosecute Money Laundering Offences.
 Competency of the LRA to investigate and prosecute infractions of tax and fiscal provisions the DCEO Act.
This Act establishes the Directorate on Corruption and Economic Offences (DCEO). The functions of the DCEO are spelled out under section 6 of the same Act. In terms of section 6 (c), the DCEO is empowered to investigate and prosecute suspected contraventions, among others, of any of the “provisions of the fiscal and revenue laws of Lesotho.” In terms of this Act, the DCEO can only prosecute with the written consent of the DPP. It has to be recalled that in terms of Lesotho Revenue Authority Act of 2001 read with Customs and Excise Act No.10 of 1982 the LRA is also empowered to investigate contraventions of fiscal and revenue laws. Quite plainly, the DCEO Act has created concurrent jurisdiction between the DCEO and LRA when it comes to investigating fiscal and revenue laws contraventions.
In the light of this concurrence can it be said that the LRA overstepped its powers when it preferred and prosecuted offences emanating from contravention of fiscal and revenue-related provisions of the DCEO Act? If the DCEO was endowed with a special expertise which the LRA did not possess that would have been a clear sign that the lawgiver has intended exclusivity of jurisdiction in favour of the DCEO, but because of the exceptional expertise which the LRA possess in this field, over DCEO, it can safely be concluded that when the LRA investigates and prosecute contraventions of the fiscal and revenue-related provisions of the DCEO Act it is not acting inimical to this Act . Speciality is always a good indicator of exclusivity ( see; Lesotho Revenue Authority and Others v Moutloatsi Dichaba and Others C of A No.21 /2018 (unreported) dated 01/02/2019 from para.23 to 25). It has to be stressed however, that concurrent jurisdiction between the two agencies is limited only to fiscal and revenue provisions of the DCEO Act. All that is needed is for the LRA to seek consent of the DPP before it can prosecute. It follows therefore that the court a quo erred and misdirected itself when it adjudged the LRA to have overstepped its powers when it prosecuted contraventions emanating from the fiscal and revenue provisions of the DCEO Act.
 Competency of the LRA to investigate and prosecute contraventions of Fraud under Penal Code Act of 2010
Tax fraud investigation falls within the jurisdiction of the Lesotho Revenue Authority, and therefore, there is absolutely nothing wrong with LRA invoking fraud provisions of the Penal Code Act and prosecuting its contravention. All that is needed is a delegation or consent from the DPP.
 Retrospectivity of Money Laundering (Amendment) Act 2016
An argument was advanced by counsel for the respondents that despite the fact that this Amendment Act confers jurisdiction on the LRA as one of the competent authorities to conduct investigations into money laundering, he argued that it was not applicable in this case as investigations happened before the Amendment Act could be promulgated. This argument should be rejected on the following score; There is a common law presumption that statutes are not to affect vested rights and are promulgated to regulate transactions in the future and not in the past (National Iranian Tanker Co. v MV Pericles GC  ZASCA 145 at para. 15).
Regarding retrospectivity the National Iranian Tanker case (ibid) at para. 5 – 15 – 16 said:
“ There is at common law a prima facie rule of construction that a statute (including a particular provision in a statute) should not be interpreted as having retrospective effect unless there is an express provision to that effect or that result is unavoidable on the language used. A statute is retrospective in its effect if it takes away or impairs a vested right acquired under existing laws or creates a new obligation or imposes a new duty or attaches a new disability in regard to events already past….
 … There is an exception to this rule in the case of a statute which is purely procedural and operates prospectively on all matters coming before the court after the passing of the statute, though even here it is the intention of the legislative which is paramount. Moreover, a provision which is procedural in form may in essence affect the substantive rights of persons.”
The respondents’ argument in regard to retrospectivity of the Money Laundering (Amendment) Act flounders on the strength of the above dicta. The respondents do not have a right to be investigated or prosecuted by a particular agency, and therefore they cannot be heard to be saying, the Amendment Act, by enlarging the list of investigating agencies, negatively affected their rights. This Amendment Act does not impose any duty nor create any obligation with regard to past events. The retrospectivity of the Amendment Act in terms of widening the ‘competent authorities’ is in my considered view, benign in the least, and therefore, cannot ground an attack to exclude the LRA from prosecuting the applicants for contraventions of the Money Laundering Act.
 Whether the respondents should have been discharged at the close of the Crown case.
Count 25 – Contravention of section 188 (1) (a) or (b) of the Income Tax Act 1993 read with section 188 (2) of the Income Tax Act 1993.
Based on the facts discussed above, which are mostly common cause, viz, the submission by the second respondent of tax return showing an income of M825,815.00, while the amount deposited into the first respondent’s bank account amounted to M5,271,021.00, taken together with an amount claimed based on withholding tax certificate confirming that the respondent generated an income much more substantial than what was recorded in the tax returns filed with the Lesotho Revenue Authority. All these facts create a prima facie evidence of contravention of section 188 (1) (a) or (b) and section 188 (2) of the Income Tax Act 1993. I deliberately retrain from delving into an analytical exercise of these facts lest I be interpreted to be preempting the outcome of the decision by the court a quo.
Count 29 – failure to keep proper accounts
– section 176 of Income Tax Act 1993
It is evidence of PW1 Daniel Rantoa, that after the 1st respondent received an amount of M5,271,021.00 from the Ministry of Home Affairs, certain transfers were made to two individuals, while Nala Capital (1st respondent) retained the balance, but that in its books the 1st respondent did not record the gross amount received, showing deductions and expenses, in order to account accurately for the income generated . It emerged also that Nala Capital had invoiced the Ministry of Home Affairs for work done, while on the other hand when Nala Capital’s accountant prepared a financial statement, made a contrary declaration that Nala Capital did not invoice the Ministry of Home Affairs. All these factors points to a prima facie evidence of failure to keep proper accounts.
Count 30 and 31 – Failure to file tax returns
Section 175 (1) of Income Tax Act 1993.
It is Crown’s evidence that the 1st respondent did not file tax returns for the years mentioned in the charge sheet, however no documentary evidence was produced to show this. This seems to have been the basis of the decision of the court a quo when discharging the accused in respect of this charge. I am inclined to agree with the learned Magistrate that PW1’s bare allegation is not enough to create a prima facie evidence of contravention of section 175 (1) of the Income Tax Act. The respondents were correctly discharged in respect of counts 30 and 31.
 In the result it follows that the court a quo erred in discharging the respondents at the close of the crown case in respect of count 25, 27, 28, 29.
 In the result the following order is made.
“The application for the discharge of the accused is refused.”
M.A. MOKHESI AJ (MR.)
FOR APPLICANTS: ADV. Ntema
FOR RESPONDENTS: ADV. Metlae
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