‘Lesotho, SA courts freeze assets in M700m clothing industry fraud case’ 24 August 2026

The forfeiture of assets in Lesotho and South Africa bought with illicit proceeds diverted from one of Lesotho’s largest clothing companies is being hailed as a milestone by authorities for cross-border asset recovery. Three months later, however, none of the assets covered by the forfeiture orders has been realised as respondents have lodged appeals. In May, courts in Lesotho and South Africa delivered two related judgments within five days of each other. The Lesotho Court of Appeal upheld the forfeiture of a Masowe property worth about M1.6-million (M1=R1), as well as about M177,000 in cash, while the Free State High Court ordered the forfeiture of three Ladybrand properties worth R5.75-million.

Both courts found the properties and cash were the proceeds of criminal activity, related to the criminal diversion of M700-million from CGM Group companies and its subsidiary, Presitex, one of Lesotho’s largest garment manufacturers. Presitex employs about 3,000 people according to its website. Eugenia Shi-Chang, whistleblower and shareholder of Presitex, had laid complaints against CGM and Presitex’s former chief executive Madhav Vassant Dalvi, with Lesotho’s Directorate on Corruption and Economic Offences (DCEO). Shi-Chang had left the company in 2009 and returned in 2023. Upon her return, she found that Dalvi and his associates had orchestrated a scheme to divert millions from Presitex and related companies to entities created or controlled by them. The DCEO investigation led to criminal charges, including theft, fraud, money laundering and abuse of office, against Dalvi, his wife Sushama, their son Chaitanya, other former employees and managers, and clothing companies including Denimagic and Alchemy Textiles.

…Funds diverted from Presitex and related companies in Lesotho had been used to buy the properties. Two of the properties were registered in the names of Madhav and Sushama Dalvi, while a third was registered to Alchemy Textiles, a South African company partly owned by Sushama and established to procure textile accessories for the CGM Group in Lesotho. The court found that these properties constituted proceeds of crime. The court examined various transactions identified during the DCEO investigation, including a M9.6-million “performance bonus” paid to Dalvi while he was chief executive of Presitex.