To my mind

Finweek English Edition - - Front page - BY RIKUS DEL­PORT rikusd@fin­

THE WHEEL TURNS slowly but surely. To an out­sider it of­ten seems as if there’s lit­tle law or jus­tice in the case of whitecol­lar crime – prob­a­bly be­cause it takes so long be­fore a guilty party is pun­ished. For many of us, es­pe­cially in­vestors who lost money and who have had to look on while Peter Gar­dener and Rod Mitchell – the main char­ac­ters in the LeisureNet saga – were ap­par­ently still hap­pily liv­ing nor­mal lives, it looked as if the wheel of jus­tice had ground to a halt.

How­ever, last week – af­ter about seven years – both were fi­nally found guilty of fraud, so they should now spend a good few years be­hind bars.

That ex­tended process is in sharp con­trast to the speedy hear­ing, con­vic­tion and sen­tenc­ing to 25 years in jail of one of David Rat­tray’s mur­der­ers. In that crim­i­nal in­ves­ti­ga­tion and hear­ing it took a mere 10 days for the law to mete out pun­ish­ment.

It would be naïve to think that fraud and cor­rup­tion cases could be dealt with as quickly as mur­der. Com­mer­cial crime is much more dif­fi­cult to prove. That’s clear from the num­ber of high-profile cases that have dragged on for aeons.

At the be­gin­ning of this year we re­ported that al­leged fraud­sters such as Gary Por­ritt, Dave King, Jo­han My­burgh and Jeff Leven­stein have all been ar­rested – some more than four years ago – but their cases haven’t yet been heard.

Di­nesh Gi­h­wala, joint cu­ra­tor in the cur­rent Fi­den­tia case, has al­ready in­di­cated that it could take years to de­ter­mine the ex­tent of the al­leged mis­ap­pro­pri­a­tion of funds in SA’s latest case of al­leged cor­po­rate fraud.

How­ever, it’s be­ing said that the Fi­nan­cial Ser­vices Board’s in­ves­ti­ga­tion, which has been pro­ceed­ing for six months, hasn’t been able to shed any light on the al­leged scan­dal.

To meet the re­quire­ments of a fair hear­ing, it’s im­por­tant for jus­tice to be served. How­ever, we have se­ri­ous reser­va­tions con­cern­ing the State’s abil­ity to achieve that. With an en­tire slew of high­pro­file cases that must come be­fore the courts this year, the State’s re­sources and skills – al­ready thinly spread – will be tested to the ut­most.

We re­ported ear­lier that SA’s law en­force­ment agen­cies’ rep­u­ta­tions are in the bal­ance. Agen­cies have al­ready shown that they have a suc­cess rate of around 90% when cases even­tu­ally reach the court, but many of those are set­tled through plea-bar­gain­ing, which is in­creas­ingly be­com­ing the norm.

The sys­tem al­lows “lesser” crim­i­nals to give ev­i­dence against and help con­vict the al­leged mas­ter­minds. For ex­am­ple, PSC Guar­an­teed Growth founder Jack Milne served less than a year of an eight-year sen­tence for his role in the fraud in which in­vestors lost mil­lions. In ex­change, Milne gave ev­i­dence against the al­leged mas­ter­mind.

But de­spite the ev­i­dence of Milne and of the com­pany’s so-called au­di­tor, Grant Ram­say, who also signed a plea-bar­gain­ing agree­ment, the State has not yet com­pleted its case against Gary Por­ritt. That raises the ques­tion of whether the pleabar­gain­ing sys­tem re­ally is a suc­cess.

Though a plea-bar­gain­ing sys­tem can cer­tainly play a use­ful role, it’s more im­por­tant for the skills and re­sources of agen­cies spe­cial­is­ing in com­mer­cial crime to be strength­ened and ex­panded so that it won’t be nec­es­sary for them to rely so heav­ily on the sys­tem. That, along with the in­tro­duc­tion of spe­cialised com­mer­cial crime courts, could help speed up tri­als.

If SA wants to show that it’s se­ri­ous about tack­ling com­mer­cial crime and cor­rup­tion, it will have to give ev­ery sup­port to those agen­cies re­spon­si­ble for bring­ing guilty par­ties to jus­tice.

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