Category: Crime & Corruption News

The National Prosecuting Authority (NPA) made a significant breakthrough this week in the ongoing effort to end impunity for high-level corruption. The preservation orders in the Optimum Coal Mine case are a demonstration that the wheels of justice in relation to complex crime are starting to turn in meaningful ways.

The case also demonstrates the multifaceted nature of the NPA’s response to complex corruption matters, which includes civil processes to preserve assets with the ultimate aim being to bring back the money stolen and looted during the state capture years.

The Gauteng High Court granted preservation orders to the Asset Forfeiture Unit (AFU) of the NPA against those who, in 2016, were involved in “financing” the purchase of Optimum Coal Mine (OCM) for R2.1-billion by the Gupta-owned Tegeta Resources.

The preservation orders – issued in terms of section 38 (2) of the Prevention of Organised Crime Act (POCA) – effectively prevents any further steps to remove or dispose of the OCM assets, as they are now regarded as having been bought with the proceeds of criminal activity.

A curator has been appointed by the court to provide a proper valuation of OCM. The curator will also find a purchaser at fair value – which is good news for all the people who have been concerned about the fate of the mine, and the community in which it is situated.

A mammoth heist

The scale of the “heist” at OCM is unprecedented, as demonstrated by the size of the preservation orders; at least R3.4-billion. This is the largest preservation order in the history of the NPA.

The NPA developed a well-coordinated case strategy that was implemented by a team of expert prosecutors, who successfully brought two applications. The first pertains to all the Gupta-owned Tegeta shares in OCM and Optimum Coal Terminal, and the entire OCM business. The second pertains to a claim of R1.3-billion from Templar Capital Limited in relation to OCM.

In respect of the second application, Templar’s owner, Daniel McGowan, had stated under oath that the funds advanced to his company derived from “money stolen from the South African government”. The funds in question were advanced by Griffin Line — a company nominally controlled by Ajay Gupta’s son, Kamal Singhala – and, in Mr McGowan’s words, “laundered via Mr Singhala on behalf of his father and wider family members”.

These funds were, in effect, part of the elaborate “washing machine” used by the Gupta family and their associates to launder billions of rands of money stolen from the people of South Africa, to fund the purchase of OCM.

Legitimising the proceeds of crime

The High Court rulings stop any further attempts to implement a so-called business rescue plan at OCM, which the NPA has long argued would effectively have legitimised the proceeds of crime.

Moreover, the OCM ruling is significant for a number of reasons:

The civil court orders clear the way for criminal proceedings against those involved in the various money-siphoning and money-laundering aspects of the Optimum deal.

It confirms the central role played by the Gupta family in structuring the various “loans” and transactions, through various business entities.

The names of Gupta-owned companies and associates litter our court documents, naming them as recipients of millions of rands stolen from the public purse, and misappropriated through front companies as “loans” and “advances”. These companies include well-known Gupta companies such as Sahara Computers, Islandsite Investments and the then-JSE listed Gupta flagship, Oakbay Investments.

It confirms the large-scale theft of public funds to build the Gupta empire – including the corruption and deception which took place at Eskom, where rules were broken to steal public funds by rushing through contracts, which would enable Tegeta to part-fund its purchase of Optimum Coal. It also confirms the misappropriation of pension money from the Transnet Defined Benefit Scheme, facilitated by Gupta facilitators such as Trillian and Regiments.

Finally, it demonstrates the effectiveness of the NPA’s Asset Forfeiture Unit (AFU), working with investigators in the Investigating Directorate (ID) from the DPCI, in applying the provisions of the POCA to deal with the proceeds of crime and corruption, whether through criminal or civil actions.

A well-coordinated approach

The rulings also demonstrate the coordinated approach of the NPA and the DPCI, and send a strong signal about the NPA’s growing capacity to deal with State Capture and ensure accountability for those involved, and to seize, recover and return the stolen money.

It is a first and meaningful step in asserting the NPA’s capacity to use all avenues at its disposal to ensure justice is delivered for the most complex crimes in our country. The next step is to obtain a forfeiture order which will allow the curator to sell the property to a legitimate buyer at the correct market value.

What’s next?

The matter has been handed to the NPA’s ID for further criminal investigation and prosecution.

Colleagues are already hard at work preparing case files against all implicated roleplayers, and will be building on the court orders this week to ensure that the case is effectively and fairly prosecuted.

A prosecution to hold accountable those responsible in this seminal case, will go a long way towards restoring confidence in the criminal justice system in SA, and will be a powerful demonstration to state capture looters, that crime in SA does not always pay.

*Advocate Ouma Rabaji-Rasethaba is Deputy National Director of Public Prosecutions: Asset Forfeiture Unit

At least 27 people alleged to be involved in a fraudulent passport syndicate have appeared in the Krugersdorp Magistrate’s Court on charges of corruption.

National Prosecuting Authority (NPA) Gauteng regional spokesperson, Phindi Mjonondwane, explained that the alleged syndicate relied on South Africans selling their identities to them in exchange for a sum of money.

“Law enforcement authorities received a tip-off about the alleged passport making syndicate that works with Home Affairs officials, to identify South Africans that are willing to sell their identities for R500. The SA citizen’s details would then be used to produce a passport for foreign nationals and be sold at R40 000 each,” she said.

Mjonondwane said the 27 people were arrested following a multi-disciplinary sting operation.

“The arrest happened after a multi-disciplinary operation, involving the Hawks’ Serious Organised Crime Investigation, Cash In-Transit Task Team, Department of Home Affairs’ Anti-Corruption, and Johannesburg Central Tactical Response Team.

“The sting operation was conducted at the offices of the Krugersdorp Department of Home Affairs in the early hours of [last week] Friday,” she said.

The alleged fraudsters are expected back in court on April 5 for bail preparation investigations.

The accused will remain in custody until their next appearance.

Elsewhere, two men have been sentenced to life in prison for the murder of a 79-year-old woman in the Eastern Cape.

According to Eastern Cape NPA spokesperson, Luxolo Tyali, Mzoxolo Mpanda and Mluleki Madikizela carried out a hit on the order of the elderly woman’s neighbour who “believed she was practising witchcraft”.

“Mhlanyukwa Msongelwa paid Mpinda and Madikizela, as well as their accomplice Nathi Njilo an amount of R250 000 and a cow to have the grandmother killed. Njilo became the state witness in terms of Section 204 of the Criminal Procedure Act.

“On the night of 12 May 2019, the three men attacked the now deceased while she was sleeping at her home with her daughter and grandchildren. Msongelwa died after a stroke attack while in custody awaiting trial,” Tyali said.

Parliamentarians across the world have been challenged to encourage governments to strengthen cooperation among law enforcement agencies to investigate, prosecute and share information to prevent human trafficking.

Fikile Masiko, who is among the South African delegation to the 144th Inter-Parliamentary Union’s (IPU’s) Assembly, which is currently underway in Nusa Dua in Bali, made the call during a preparatory debate in the Standing Committee on Democracy and Human Rights on the proposed theme for the draft resolution.

The proposed theme must be written for the standing committee’s consideration at the 145th IPU Assembly to take place later this year.

The theme concerns parliaments’ developmental role in countries with high levels of international migration, as well as their role in preventing all forms of human trafficking and human rights abuses, including that sponsored by the state.

Masiko called for cooperation between law enforcement agencies to be accompanied by strong extradition treaties, pointing out that South Africa has such treaties with 18 other countries, to date.

She also called on parliamentarians to exercise their constitutional mandate to strengthen social and labour protection frameworks, thereby eliminating the barriers that increase people’s vulnerability to slavery and other forms of exploitation.

“In South Africa’s view, the draft motion on this text should cover comprehensively the IPU’s intention to protect victims by ensuring their access to secure shelters, health services, including reproductive health services, psycho-social counselling, legal assistance, as well as documentation issues,” Masiko said.

As a matter of procedure at the IPU, standing committees debate and agree on a theme for a draft resolution and elect rapporteurs to compile a draft from which IPU member states make written comments.

The committee concerned then meets to discuss the draft resolution and consider written comments, in order to produce a final draft resolution to be tabled for adoption by IPU Assembly.

The Standing Committee on Democracy and Human Rights will reconvene again on Wednesday to officially adopt the proposed theme for its next draft resolution.

The standing committees on Peace and International Security and on Sustainable Development will also finalise their draft resolutions, to be tabled in the Assembly for adoption.

The 144th IPU Assembly plenary is expected to adopt the two draft resolutions that seek to reframe how peace processes are approached, with a view to facilitating lasting peace and leveraging information and communication technology to support the education sector, including in times of pandemic.

The Unemployment Insurance Fund (UIF) Commissioner, Teboho Maruping, has issued a stern warning to those who attempt to defraud the UIF to be aware that they will be arrested and punished for their heinous actions.

This follows the recent conviction of a couple who cheated the UIF’s COVID-19 Temporary Employer-Employee Relief Scheme (COVID-19 TERS) out of more than R10 million.

Directors of Denmeng Trading, Moroko Moremi, 37, and his wife Treasure Moremi, 34, were recently found guilty of fraud by the Pretoria Specialised Commercial Crimes Court after applying for COVID-19 TERS for 553 workers when they only employed 22.

“Joint efforts by the UIF’s investigators, law enforcement agencies at the Fusion Centre such as the HAWKS, National Prosecuting Authority (NPA), and the Financial Intelligence Centre (FIC) led to the couple’s successful arrest and conviction,” the department said in a statement.

The couple is scheduled to be sentenced on 17 May 2022.

The department said that this latest conviction is against the backdrop of a recent court appearance of two suspects at the Pretoria Specialised Commercial Crimes Court after they received R2,7 million from the UIF, but allegedly failed to use the money in line with the Memorandum of Understanding (MOU) signed with the UIF.

Amongst others, the MOU requires that the COVID-19 TERS monies must be paid over to the qualifying workers applied for.

Commissioner Maruping has conveyed his gratitude to law enforcement agencies for the latest conviction and arrests.

He said that he hopes the latest conviction and arrests send a strong message to other would-be fraudsters that the long arm of the law will always catch up with them.

“Those who have helped themselves to funds earmarked for workers during the lockdown should always remember that the law is creeping towards them and they will not have any peace. We will not tolerate the siphoning of workers’ benefits by unscrupulous individuals. All fraudsters are on notice and we hope more suspects are arrested and sent straight to jail.

“Working together with law enforcement agencies, we will follow every lead pointing towards suspected fraud. We also thank the public for being vigilant about the abuse of COVID-19 TERS funds by blowing the whistle to us,” Maruping said.

To date, there have been four convictions of individuals who have defrauded the UIF of COVID-19 TERS funds, and more are expected as 15 cases have been referred to the SIU for further investigation.

In 2020, the Fund embarked on the “follow the money” project where close to R900 million was recovered.

The department said that the project is expected to resume in April 2022 upon the appointment of audit firms and it is anticipated that additional recoveries will be made, and more arrests will take place as fraudulent claims are uncovered.

Meanwhile, the Department has also noted and welcomed the sentence handed down by a Pretoria Magistrate Court on Tuesday to three undocumented immigrants for impersonating Labour Inspectors.

Okichukwu Michael Uzor (45), Loveness Mandivava (32), and Nyemudzai Muzvidza (33) were sentenced to twelve months in prison with an option of R10 000 fine.

The Department has applauded and welcomes the decision, stating that it sends a clear message to those posing as labour inspectors and performing any labour inspection functions to flee.

The Department said that it was concerned about the growing number of pretentious inspectors in the province but believes it is only a matter of time before the department pounces on them.

The Special Investigating Unit (SIU) is expected to begin an investigation into alleged corruption and maladministration at the Limpopo Department of Health.

This after President Cyril Ramaphosa signed a proclamation giving the corruption busting unit the authority to do so.

SIU spokesperson Kaizer Kganyago said although the investigation would zero-in on procurement of health waste management services in the province, it would not be limited to that scope.

“Furthermore, the SIU will probe payments which were made in respect thereof in a manner that was not fair, equitable, transparent, competitive or cost-effective; or contrary to applicable legislation or circulars or instructions issued by the National Treasury or the relevant Provincial Treasury,” he said.

According to Kganyago, officials at the department will also come under the microscope.

“The…investigation will also cover any unlawful, improper or irregular conduct by employees, officials or agents of the department; or any other person or entity, in relation to the allegations being investigated. The SIU will refer evidence of pointing to criminal conduct it uncovers during the investigation to the National Prosecuting Authority (NPA) for further action,” he said.

Kganyago explained that the investigation will cover a period of a decade at the department.

“The proclamation covers offences which took place between 1 January 2010 and 18 March 2022, the date of publication of this Proclamation, or which took place prior to 1 January 2010.

“It also covers any offences after the proclamation date that are relevant to, connected with, incidental to the matters or involve the same persons, entities or contracts investigated under authority of Proclamation R55 of 2022,” he said.

The spokesperson warned that where wrongdoing is found, the SIU will institute legal action against those found to have transgressed the law.

“The SIU is empowered to institute civil action in the High Court or a Special Tribunal in its name, to correct any wrongdoing uncovered during its investigation caused by acts of corruption, fraud or maladministration,” Kganyago said.

Police have taken in a Grade 10 learner, from Ntemoseng Secondary School in the Free State, for questioning, for the sale of allegedly poisonous cakes to fellow pupils.

According to reports, some of the learners who consumed the cakes are in a critical condition, while others have recovered after receiving medical attention. The learners who consumed the cakes are said to have started scratching themselves, with some experiencing headaches and others being hyperactive.

“Upon investigation, the learners alleged that they bought cakes from one Grade 10 learner when they arrived at school. About 17 learners were treated at the hospital and 12 have fully recovered,” said Free State Education MEC, Dr Tate Makgoe on Thursday.

The MEC said the learner who sold the cakes did so in contravention of the school code of conduct, and will “not be allowed at the school”.

“This should not be allowed in our schools. It is clear that older people are using our children to achieve their nefarious objectives. Collectively and individually as stakeholders, we to have condemn this in the strongest possible term,” Makgoe said.

The MEC extended his gratitude to the Department of Health for responding swiftly to the situation.

The Special Investigating Unit (SIU) says it is awaiting Special Tribunal adjudication on cases that could recover at least R2 billion which has been looted from public coffers.

This after the Special Tribunal ordered software company SAP to pay back at least R413 million to the Department of Water and Sanitation (DWS) after a licensing and support agreement between the two parties was declared unconstitutional and invalid.

According to SIU spokesperson, Kaizer Kganyago, the judgement serves as a warning for errant public servants and private companies.

“The SIU and DWS welcome the Special Tribunal order as it sends strong message to officials and companies doing business with the state that collusion and unethical business practice will not be rewarded.

“The outcome of the Special Tribunal order is a continuation of implementation of the SIU investigation outcomes and consequence management to recover financial losses suffered by state institutions. There are other matters enrolled in the Special Tribunal which are still awaiting adjudication to the combined value of R2.1 billion and will result in further recoveries for the state,” he said.

Kganyago added that department officials that were involved in the dodgy SAP contracts will not escape scrutiny.

“[The] SIU made disciplinary referrals to DWS against two senior officials. The SIU was informed that DC against one senior official has been concluded and judgment is expected within this week, while the DWS is considering disciplinary action against the other official.

“The SIU has also referred evidence pointing towards criminality to the National Prosecuting Authority, Asset Forfeiture Unit and South African Revenue Service,” Kganyago said.

The South African Police Services (SAPS) and the Department of Correctional Services (DCS) on Tuesday launched a manhunt for four inmates who escaped from the Rooigrond Correctional Facility, near Mahikeng.

SAPS spokesperson Brigadier SB Mokgwabone said: “Investigations will be instituted and the circumstances relating to the escape will be revealed once investigations have been concluded”.

The inmates are Zacharia Francisco Nyalimate (Mozambican) convicted for house breaking and murder. He is serving 27 years.

Alfred Gwambe (Mozambican) convicted for house breaking, theft, possession of a stolen vehicle. He is serving 65 years.

Siyabonga Sithole (South African) convicted for rape, theft and house breaking and serving a life sentence, and;

Edward Madiba (South African) convicted for robbery, possession of firearm and serving 15 years.

The Department appealed to the public to assist with any information that may lead to the re-arrest of the four. “They are considered dangerous and if spotted, information should be shared with the nearest Police Station,” he said.

The Special Investigating Unit (SIU) has obtained a search and seizure warrant from the Kimberley Magistrate Court in the Northern Cape to raid the National Lotteries Commission (NLC) offices.

The warrant, which was obtained on Tuesday, authorises the SIU to search and seize evidence from the NLC Kimberly offices, in relation to the funding of non-profit organisations (NPO) meant to uplift communities in the province.

Accompanied by members of the Directorate for Priority Crime Prevention (Hawks), SIU investigators are currently raiding NLC offices to seize evidence that might assist with an ongoing investigation.

The SIU was reliably informed by whistle-blowers that NLC officials had allegedly enlisted the services of runners, who were tasked with the responsibility of scouting NPOs in the province and encourage them to apply for NLC funding.

Immediately after the funding was approved and released to NPOs, it is alleged that the runners, together with NLC officials, would share approximately 30% of the funding.

Fearing that the normal procedure of requesting documents, in accordance with the SIU Act 74 of 1996, might result in crucial evidence being compromised, the SIU approached the court for a search and seizure warrant to raid the NLC offices.

The SIU is looking to seize documents, laptops and computer hard drives.

The SIU was, in terms of Proclamation R32 of 2020, authorised by President Cyril Ramaphosa to investigate allegations of corruption and maladministration in the affairs of the NLC and the conduct of its officials.

The proclamation covers offences which took place between 1 January 2014 and 6 November 2020, the date of publication of this proclamation, or which took place prior to 1 January 2014.

It also covers any offences after the proclamation date that are relevant to, connected with, incidental to the matters or involve the same persons, entities or contracts investigated under authority of Proclamation R32 of 2020.

The Department of Public Works & Infrastructure (DPWI), has welcomed the judgement handed down with regards to the Beitbridge Border fence project.

The judgment was handed down by Judge Lebogang Modiba on Tuesday.

This as the department and Special Investigating Unit (SIU) had sought just and equitable relief in terms of section 172(1)(b) of the Constitution, including an order seeking to divest the contractors (Caledon River Properties (Pty) Ltd and Profteam CC) from any profits derived from the contracts relating to the 40km long fence.

The construction of the fence was done as part of the emergency COVID-19 procurement during 2020 but soon after it was erected; it fell apart – prompting an SIU investigation.

Judge Modiba has stated that “it is just and equitable to apply the no profit and no loss principle” and dismissed the right of the contractors to retain the profits arising from these contracts.

The judgement requires that the profits accruing to the contractors from the project be repaid to the DPWI. The department also noted the statement from Judge Modiba that further corrective measures lie in holding to account “the officials who designed, approved and implemented” the project.

With regards to these further corrective accountability measures, the DPWI’s Acting Director General, Imtiaz Fazel, confirmed that in February 2022 the State concluded its case in the majority of disciplinary hearings against the implicated DPWI employees.

The defendant employees are scheduled to finalise their response to the State’s case by the 8th April 2022.

In addition to these disciplinary processes, the acting Director General, has offered the Engineering Council of South Africa the DPWI’s full co-operation to investigate the conduct of professional engineers within and contracted or sub-contracted to the DPWI in this matter.

“I wish to assure our employees and the wider public that the Department of Public Works and Infrastructure is committed to clean governance and enacting consequence management where necessary. I gratefully acknowledge the assistance and bravery of the State’s witnesses from the DPWI, SIU and National Treasury in last month’s disciplinary hearings.

“As the DPWI works to improve delivery, communication and consequence management, we are seeking to play our part in rebuilding the confidence and trust that South Africans have in their government,” said Fazel.