NPA confident it can win frozen assets case
The National Prosecuting Authority (NPA) is set for its first major battle in its fight to prosecute those responsible for state capture corruption and claw back the billions stolen from public coffers when it defends the freezing of more than R1bn linked to the looting of Transnet.
But, as papers filed at the high court in Johannesburg show, it is clear that the state is confident it has done enough to show that there is a reasonable possibility that the directors of Regiments Capital will be convicted for their alleged part in that looting, and therefore there is a basis to freeze their assets as the potential proceeds of crime.
This crucial case will be heard via Zoom on May 18, when Regiments directors Niven Pillay, Litha Nyhonyha and Eric Wood will argue for the preservation order against them to be overturned or for the amount seized to be reduced.
It is important to remember that previous efforts by the Gupta family and their associates to reverse the state’s freezing of their assets, in connection with the aborted Estina dairy farm scam case, were all successful. Those cases, brought before Shamila Batohi took over as national director of public prosecutions, were a huge embarrassment for the state.
The Regiments case may well be a first step in the NPA’s recovery from that debacle.
Hermione Cronje, head of the NPA’s investigative directorate, has revealed in court papers that the state is preparing to indict Pillay, Nyhonyha and Wood for crimes linked to advisory services deals they scored with Transnet, primarily in relation to its purchase of 1,064 locomotives. The state says there is clear evidence that Regiments, as well as then Transnet bosses Anoj Singh and Brian Molefe, were involved in the “unjustified escalation” in the estimated total cost of that deal from R38.6bn to R54.6bn.
The state further contends that Molefe and Singh motivated for an unjustified and exponential increase in the fees that Transnet paid Regiments for its advisory services.
“The court has only to satisfy itself that there is evidence that might reasonably support a conviction and a consequent confiscation order, and whether that evidence might reasonably be believed,” the NPA says in court documents.
“Nothing which either Regiments or Wood have said in their answering affidavits suggests that the evidence relied upon by the national director of public prosecutions is manifestly false or unreliable.”
It adds that Pillay, Nyhonyha and Wood have “barely engaged with the substance of the allegations of unlawful conduct made against them” in their responses to the case made by the state to justify the freezing of their assets.
“They are not obliged to do so, but they bear the consequences of their election,” the NPA says.
The state says multiple forensic reports, evidence initially led at the state capture inquiry and witness testimony show that Pillay, Nyhonyha and Wood committed corruption, money laundering and fraud in relation to Transnet and the Transnet Second Defined Benefit Fund as “part of the state capture project, and enriched the defendants as well as members of the Gupta family and their associates”.
“Transnet paid the Regiments companies more than R1bn arising from the alleged offences and unlawful contracts which are in issue. This all constitutes proceeds of crime.”
It is the state’s case that Regiments was unlawfully appointed as adviser to Transnet because it paid Salim Essa, a key Gupta family associate, 30% of the fees it was paid by the parastatal. Because Transnet then paid Regiments more than R1bn as an alleged consequence of this corruption, the NPA argues, “they are all liable to be confiscated in due course”.
Regiments, Pillay and Nyhonyha paid back R639m to the Transnet fund after it launched legal action against them. It accused them of siphoning hundreds of millions of rand “misappropriated” from pensioners into a Gupta family bank account used to pay a deposit on the Optimum coal mine.
While the NPA has proposed that the high court’s final freezing order “should have regard” to that payment, it has urged the court to consider that the fund has since launched a more than R200m claim against Wood, based on his alleged part in the looting.
THE STATE CONTENDS THAT MOLEFE AND SINGH MOTIVATED FOR AN UNJUSTIFIED AND EXPONENTIAL INCREASE IN THE FEES THAT TRANSNET PAID
TRANSNET ACCUSED THEM OF SIPHONING HUNDREDS OF MILLIONS OF RAND FROM PENSIONERS INTO A GUPTA FAMILY BANK ACCOUNT