The National Prosecuting Authority (NPA) is preparing to launch its first major state capture corruption case against key Gupta family associates.
Just over two years after Cyril Ramaphosa became president and put the restoration of the prosecution authority at the heart of his reform agenda, the NPA is set to charge individuals accused of stealing more than R1.6bn from ports and rails utility Transnet, with the alleged assistance of former bosses Brian Molefe and Anoj Singh.
Hermione Cronje, head of the NPA’s Investigative Directorate, said in court papers that the state was preparing to indict Regiments Capital directors for fraud, corruption and money laundering linked to advisory services deals with Transnet, primarily in relation to its purchase of 1,064 locomotives for more than R54bn.
The state contends that the company was one of the "primary vehicles" that the Gupta family and their associates used to extract billions of rand from state-owned enterprises (SOEs).
The impending case comes at a time when the NPA is under increasing scrutiny from those who say it has been too slow in going after those responsible for massive corruption, which derailed the economy over a decade and destroyed once thriving SOEs.
Government rescues for crippled SOEs were at the heart of the deterioration in the country’s finances, culminating in the loss of its last remaining investment-grade rating in March.
Denied wrongdoing
Molefe and Singh, who have consistently denied any wrongdoing, are heavily implicated in the case as they allegedly motivated for increases in Transnet payments to Regiments on an irregular and totally unjustified basis and were integrally involved in the "unjustified escalation" in the estimated total cost of the locomotives from R38.6bn to R54.6bn.
"The drafting of the provisional indictment is nearly complete," Cronje stated in an affidavit filed earlier in April.
The NPA has "the bulk of the statements that the state intends to rely on in support of its case".
The only "outstanding matters" that the prosecutors need to finalise are a financial analysis report, due to be completed this month, and "the analysis of material extracted from the digital devices" seized in a search and seizure operation.
"I confirm that the state has a serious intention to prosecute the defendants," Cronje said.
Cronje said that the pending prosecution had its genesis in a June 2017 criminal complaint that implicated "Regiments Capital, along with a number of Transnet officials and senior politicians in improper conduct" linked to that purchase.
First in the line of fire are Niven Pillay, Litha Nyhonyha and Eric Wood, whom Cronje has identified as key players in a criminal conspiracy that saw Regiments paying huge portions of the R1.6bn they scored at Transnet and one of its pension funds to key Gupta family associate Salim Essa.
Pillay, Nyhonyha and Wood were long-time partners in Regiments but fell out after a Gupta buyout offer that led to Wood leaving to set up Trillian Capital Partners with Essa in 2016. Trillian has been linked to allegedly corrupt deals at Eskom, the state-owned electricity utility that is drowning in debt approaching R500bn, or about 10% of SA’s GDP.
Court papers also showed that Pillay and Nyhonyha have made offers to "co-operate" with the NPA in the Regiments case, an indication that they are either seeking to do plea deals or want to turn state witness against Wood.
But in court papers Cronje said the pair’s offer failed to include "any acknowledgment or even intimation of wrongdoing" or "any offer to disgorge benefits that were improperly obtained" and "the most reasonable interpretation … is that Pillay and Nyhonyha offer to provide evidence of the wrongdoing of other persons".
She later said that national director of public prosecutions Shamila Batohi contends that Wood, Pillay and Nyhonyha played a "significant role" in the state capture project.
Wood, Pillay and Nyhonyha all argue that the evidence that the NPA has produced to justify the freezing of R1.6bn of their assets — pending the outcome of their yet to be launched criminal trial — is hearsay, conjecture, speculation, incomplete and inadmissible in criminal proceedings.
Cronje said the state had produced evidence that showed there was a reasonable possibility that the trio would be convicted and their assets forfeited as the proceeds of crime.
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