Chinese Laundry

South Africa pockets R190m illegally destined for Beijing.

- Jonathan Erasmus

Just 11 days before christmas the SA Reserve Bank declared R192 million of “tainted” China-bound money that had been seized from the bank accounts of a Sandton currency-exchange business, forfeited to the state. The money had been deposited there more than five years ago by scores of local Chinese business people, many using false identities and forged bank documents, in an attempt to send their undeclared millions back home, under a cloak of anonymity.

They had somehow been led to believe that Ace Currency Exchange (Pty) Ltd – owned by a Zambian with a history of shady dealing on the continent – offered a means of repatriating their funds to China under the radar of exchange control regulations.

This story reveals the ease and confidence with which anyone can move illgotten gains out of or into South Africa through currency exchange businesses on the assumption that, even if caught, no one will be punished.

Despite prima facie evidence of currency exchange violations, forgery, fraud and possibly money-laundering, the state appears to be in no hurry to prosecute the Ace Currency Exchange (Pty) Ltd based in Fredman Towers, Sandton or any of its more-than 100 Chinese clients fingered in the scam.

Instead, in March, the Financial Intelligence Department of the Reserve Bank, reaffirmed Ace’s licence when it released a document titled “Currency and Exchange Guidelines for Consumers” which helps consumers make informed decisions when choosing a currency exchange provider.

The Reserve Bank, despite numerous requests, refused to provide any information. Noseweek’s requests for substantive reasons as to why they seized the money and when they were going to prosecute, were ignored.