Johannesburg - A Zimbabwean businessman and presidential hopeful has had his license withdrawn by the Financial Sector Conduct Authority (FSCA) over an R200 million loan granted to controversial fugitive and self-proclaimed Malawian prophet Shepherd Bushiri.
Joseph Makamba Busha’s JM Busha Asset Managers was stripped of its license as a registered financial service provider (FSP) in April last year in terms of the determination of the fit and proper requirements after the FSCA found that its assets did not exceed its liabilities.
Busha, 56, has already launched his presidential bid in Zimbabwe through his FreeZim Congress and is expected to square off against President Emmerson Mnangagwa and Citizens Coalition For Change leader Nelson Chamisa in the 2023 elections.
JM Busha Asset Managers’ attempt to challenge the FSCA’s ruling at its Financial Services Tribunal was unsuccessful as it was dismissed on September 14, according to the tribunal’s written decision.
The company was also required to comply with the additional asset, working capital and liquidity requirements at all times and submit half-yearly annual statements, among others.
According to the FSCA, JM Busha Asset Managers invested its clients’ money (two pension funds and three provident funds) – Inyatsi Construction Group Holdings, Shepherd Bushiri investments and SME Bank of Namibia.
In Shepherd Bushiri investments, the company invested R200m, R150m in Inyatsi and R60m in SME Bank. JM Busha Asset Managers has indicated that it has recovered the R150m invested in Inyatsi and has initiated steps to recoup the other outstanding amounts from Shepherd Bushiri investments and SME Bank.
In July, Independent Media reported that the South Gauteng High Court confirmed Bushiri’s provisional sequestration following the JM Busha Investment Group’s application to force the Malawian fugitive to repay R100m and another R103.5m that were due in April and May 2020.
Shepherd Bushiri Investments entered into a loan agreement with the JM Busha Investment Group in 2017 to be lent R200m, which was to be used to renovate the Enlightened Christian Gathering Church head’s luxury Sparkling Waters Hotel and Spa in Rustenburg in the North West.
After investigations, JM Busha Asset Managers was found by the FSCA to have underwritten a credit instrument to Shepherd Bushiri Investments for the funding of the renovation and expansion of the Sparkling Water Hotel development, which was a breach of its mandate.
Following the Bushiris’ arrest for fraud and money laundering in October 2020 and their release on bail, after which the couple and their children fled South Africa, Busha called Bushiri to enquire about the non-payment, and the Malawian pastor promised to make payment in full within a week.
However, before the end of that week, the Bushiris hastily left the country and returned to Malawi. The South African government is currently busy with the extradition process.
The FSCA found that JM Busha Asset Managers knew that it was not authorised to invest in Shepherd Bushiri Investments and that JM Busha Asset Managers also did not stop there but went on to keep this information from its client.
"The applicant (JM Busha Asset Managers) does not meet the financial soundness required by Section 48 of the fit and proper requirements. The solvency test has not been met because the current liabilities exceed the current assets,” the tribunal declared.
JM Busha Asset Managers’ authorisation was withdrawn due to its contravention of the fit and proper requirements, the code of conduct for administrative and discretionary FSPs and the general code of conduct for authorised FSPs and representatives, as well as the Financial Advisory and Intermediary Services Act.
Busha’s lawyer Kevin Schaafsma told the Sunday Independent that he was not involved in the FSCA matter while Bushiri’s attorney in his legal battle against the Zimbabwean businessman, Clifford Levin, did not respond to questions this week.