KAMPALA (Reuters) – The building supply company behind the $3.7 billion fraudulent ABC building sale is being investigated by police over a fraud involving the sale of building supplies in the remote and impoverished areas of Botswana, a source close to the probe said on Wednesday.
Police were investigating the alleged theft of construction materials and a $3 million loan by the builder in 2015 to a firm called REekton, which supplied the ABC building to a South African company.
A source close the investigation said the company had been linked to a $2 billion scheme by the owners of a building supply store, which the ABC bought in 2007.
The owner of the building supply shop has been arrested, the source said, and is being questioned by police.ABC said it had been notified about the investigation and that it was cooperating with police.
“We are aware of the ongoing investigation and are in the process of providing information to authorities,” a spokesman said.ABC, which has more than 2,500 stores in South Africa, has more stores than any other commercial company in the country.
In a statement, the ABC said it was “looking into the allegations” and “will cooperate fully with any law enforcement inquiry”.
The company said it has been working with South Africa’s government and local authorities to “assess the matter”.
It has also provided a $1.6 million loan to a government fund to help repair damaged properties, the company said.
It did not say whether the bank had received any information about the alleged fraud.ABC did not respond to questions from Reuters about the allegations.
The ABC has said the building is being refurbished and will reopen as soon as it is safe.
A spokesman said: “The ABC is working closely with South African authorities to investigate the matter and to determine the appropriate course of action.”
The ABC does not comment on individual matters.”ABC chief executive David King said he had spoken to the South African president and that the ABC would cooperate fully.”
There is an ongoing investigation into the alleged loan fraud and we will cooperate fully to protect our customers and protect the integrity of our supply chain,” he said.”ABC has never had any financial dealings with any foreign entity and has always operated under strict quality assurance measures.
“This is all in accordance with our Code of Conduct, which is designed to prevent any breaches of our Code.”
It is an extremely difficult and complex issue that we are working with the South Africans authorities and we stand ready to assist them with any steps they may take.