Online Reporter
Yeukai Karengezeka
Court Correspondent
THE fraud trial of Michael Smith, a former director of MA Auto Suppliers (Pvt) Ltd, trading as Mr Cruiser, resumed last week.
Smith stands accused of defrauding the company of at least US$38 000 and R124 000.
The charges against him include two counts of theft of trust property, 12 counts of fraud, and 25 counts of corruptly concealing transactions from his principal.
The State called Mr Michael Scott Asher, a current director and shareholder of the company, to testify against Smith.
Asher outlined how Smith, who was appointed as a director on January 16, 2017, allegedly abused his role to defraud the company.
Smith’s duties as a director included driving the company’s strategic vision, sourcing new products, problem-solving for various departments, managing company cash, and supervising senior employees.
Asher emphasised that Smith was bound by the Companies and Other Business Entities Act to act in the best interest of the company and avoid conflicts of interest.
However, Asher testified that Smith breached these duties for personal gain during his tenure, particularly while he was in Australia in 2019.
Smith was left in charge of the company’s operations alongside finance manager Mrs Christine Vellah, but allegedly withheld critical financial information and concealed fraudulent activities.
Asher became suspicious of Smith’s conduct after receiving several tip-offs and encountering difficulties accessing financial records.
Upon his return, Asher launched an internal investigation, uncovering what he described as a pattern of fraudulent behaviour.
He discovered that Smith had collaborated with his friend, Tony Oatley, to establish a company called Mantic Procurement (Pvt) Ltd.
Mantic was allegedly set up to inflate procurement costs for MA Auto. Smith misrepresented Mantic as a legitimate supplier, causing the company to pay 5–10 percent more on imported goods.
Further investigations revealed Smith had also used another entity, Flint Crest Projects, to charge excessive runner fees, adding unnecessary costs to transactions and pocketing the difference.
Asher provided evidence of several fraudulent transactions, including an undeclared loan.
In November 2020, Smith received a US$10 000 loan from Asher for a new business venture but failed to declare or account for the funds.
Smith also sold a Toyota Land Cruiser (Reg No. ACU8769) on behalf of the company for US$13 000 but only accounted for US$5 500.
In another instance, he sold a company car (Reg No. AEL 3470) to his son for US$2 000 instead of the agreed US$7 500 and later resold the same vehicle to another buyer, pocketing the proceeds.
Smith allegedly directed company-purchased goods, including tents, to clients without payment or diverted payments into his personal offshore account.
One such case involved US$1 700 paid by a client, Mrs Louisa Horsley, into Smith’s Isle of Man account.
Smith allegedly instructed clients, such as Anthon Bown, to deposit funds into Mantic Procurement accounts instead of MA Auto’s.
This resulted in significant financial losses, including R24 259 in profits that should have gone to the company.
Smith reportedly facilitated vehicle repairs for friends and family, collecting payments but failing to remit them to the company.
Asher also alleged that Smith traded debts owed to the company for personal benefits, such as luxury accommodation, without reimbursing MA Auto.
The court heard that emails, WhatsApp messages, and voice recordings retrieved by cyber experts showed communication between Smith and his accomplices, including Oatley.
These records, presented as evidence, were admitted without objection from the defence lawyer.
Asher testified that Smith used his position to manipulate financial records and engage in corrupt practices.
For example, Smith allegedly instructed employees to release goods or services without payment or at reduced prices, further prejudicing the company.
Smith has denied all allegations, claiming that all his actions were conducted transparently and in the company’s best interests.
The trial continues on April 30 with cross-examination.
