NPA is smothering progress on reform
One of the benefits of the new remote work culture is that I’ve been getting to spend quite a lot of time in one my favourite places in the country, the sleepy seaside village of Zinkwazi, almost 100km north of Durban, where the local news flow is dominated by whether Steve, owner of the only general dealer shop, is going to neuter the feral cats.
The community WhatsApp group lit up over December when tension boiled over after rumours had been swirling for some time that an Islamic State of Iraq and Syria (Isis) cell leader was resident in the community. It is alleged that Isis cells are popping up all over SA, and a quiet North Coast dorp would provide the perfect cover.
The fear was crystallised in the community when, in November 2022, the US treasury announced sanctions on Zinkwazi resident Farhad Hoomer after designating him an Isis cell leader “who continues to pursue Isis’s objectives in Southern Africa and express the will and intent to attack the interests of the US and its allies”.
The US-led Counter Isis Finance Group warned recently that Islamic State is taking advantage of Africa’s inadequate counterterrorism infrastructure to raise finances on the continent, with SA serving as a key conduit for money transfers.
Hoomer is no stranger to terror-related allegations. In October 2018 police detained him and 11 others in a raid on his home, where they found an underweight and malnourished foreigner tied up in the cellar. Among charges against the 12 was an attack earlier in 2018 at the Imam Hussain Mosque in Verulam, in which mechanic Abbas Essop had his throat slit.
Hoomer was also accused of masterminding terrorist-related firebomb attacks at Woolworths stores and the Durban July horse racing event the same year.
While out on R200,000 bail Hoomer was again arrested, this time for possession of firearms, ammunition and suspected stolen property. Despite serious charges against him and his coaccused, their cases were provisionally dismissed in 2022. Hoomer has consistently denied any wrongdoing.
Natasha Kara, spokesperson for the director of public prosecutions in KwaZulu-Natal, said at the time that the state determined there was insufficient evidence to maintain the case on the court’s docket. Which brings me to this past week and what I’ve observed relating to SA’s greylisting by the Financial Action Task Force (FATF).
The FATF greylisted SA a year ago, on February 24, as it was judged inadequately compliant in terms of preventing money-laundering, terrorist funding and proliferation finance. To summarise, in the mutual evaluation report FATF found SA complied (in its ability to prevent money-laundering, terrorist funding and proliferation finance) in only 20 of the 40 FATF recommendations — 20 shortcomings, in other words.
The FATF has now evaluated 15 of the previous 20 shortcomings as no longer deficient, with 14 of them completely or substantially compliant. The FATF commended SA’s progress given that we are a year ahead of most other countries when dealing with such deficiencies.
It’s increasingly clear that the Financial Sector Conduct Authority (FSCA) and the SA Revenue Service (Sars) want to be seen to be enforcing compliance. This past month the FSCA fined asset manager Ashburton, a wholly owned subsidiary of FirstRand, R16m after finding the firm to be in breach of the Financial Intelligence Centre Act (Fica) by failing to identify and verify identities of some clients, including beneficial owners of clients, after a routine inspection from October 17 to November 15. And of course, the eye-popping civil case against Sasfin, with Sars claiming R4.87bn plus interest and costs in the form of a damages claim. It followed a 2023 investigation that found senior Absa, Standard Bank and Sasfin Bank officials were involved in laundering millions of dollars in dirty cash from the Rudland Gold Leaf Tobacco companies, among others, in exchange for regular bribes.
I spoke to senior counsel about the likelihood of Sars succeeding, and it’s extremely low. So one can only assume it wants to put on a show of force for the FATF given the resources it is dedicating to a losing case.
While it’s obviously encouraging to see the effort being put into getting us off the greylist, one has to ask where the National Prosecuting Authority (NPA) is in all of this. How can it be that Treasury-designated Isis cell leaders accused of serious crimes, with mounds of evidence, can walk away scot-free while taxpaying, law-abiding corporates are targeted for lax compliance? We know why. It’s because businesses are easy targets. They are inclined to open up their books and cough up. The fact is that in 2022 the US designated four SA-based alleged funders of Isis and Isis-Mozambique in a move that was meant to dismantle financial support networks for terrorist groups across the continent.
But Hoomer and his accomplices — who are alleged to be the main facilitators of funding for Isis branches and networks across Africa — walk free.
The failed turnaround of the NPA on Shamila Batohi’s watch has been the most jarring and stultifying component of the reforms implemented by the president in 2018.