Two of the Gupta brothers have launched a legal challenge against Eskom and the Special Investigating Unit (SIU), who are trying to bring them to court as part of efforts to claw back R3.8bn, arguing that the case is legally flawed and fails to make a proper claim against them.
Ajay and Rajesh “Tony” Gupta want the high court in Pretoria to set aside Eskom’s and the SIU’s summons against them, saying should the SIU and Eskom fail to “correct” the alleged errors they say effectively invalidate the claim against them, they will apply to be removed as parties in the case.
The Eskom/SIU summons, which the parastatal says is aimed at recovering part of R3.8m illegally diverted from it to help the family buy Optimum Coal, is the only civil or criminal case that the Guptas are facing after numerous allegations of state capture against them.
Sources in the SIU and Eskom have dismissed the brothers’ recently launched court action as nothing more than a “delaying tactic” aimed at buying time to reply to the case against them, but lawyer for the brothers Rudi Krause rejects this.
“This is not a delaying tactic,” Krause told Business Day. “This is about my clients raising the obvious deficiencies in the case against them ... I honestly feel embarrassed for any self-respecting lawyer who needs to defend this case in court.”
The Guptas have defeated every previous attempt by the National Prosecuting Authority (NPA) and Asset Forfeiture Unit, when under the leadership of Shaun Abrahams, to freeze their assets and prosecute them in the Estina Dairy Project scam.
However, head of the investigative directorate Hermione Cronje has repeatedly stated that the NPA, now under the leadership of Shamila Batohi, intends to revive that prosecution in the near future.
Eskom spokesperson Sikonathi Mantshantsha said that the state-owned company, one of those hardest hit by alleged looting, remains “confident of the success of its litigation against those accused of the corruption of state capture”. The company will not address the claim made by Ajay and Rajesh Gupta as “Eskom will litigate in the relevant and competent court of law, and not in the media”.
SIU spokesperson Kaiser Kganyago took the same stance. “This matter is before court. We are not going to be pushed into a trial in the media. We have served the papers and they must respond and the matter will be heard in court.”
The SIU/Eskom legal action seeks to recover R3.8bn from multiple defendants, including former Eskom heavyweights Brian Molefe, Anoj Singh, Matshela Koko and Ben Ngubane — who they argue were integrally involved in the illegal diversion of money from the parastatal to support the purchase of Glencore’s Optimum Coal Holdings (OCH) by the Gupta-linked Tegeta in 2016.
They claim Eskom’s leadership effectively forced Glencore to sell Optimum, which was then bought by Tegeta in a deal allegedly facilitated by then mineral resources minister Mosebenzi Zwane and largely financed by Eskom.
According to Eskom and the SIU, “All of the former executives and board members breached their fiduciary duty of care and good faith to Eskom, and acted in a concerted state capture effort with the Gupta brothers, Mosebenzi Zwane and Salim Aziz Essa to illegally divert funds from Eskom”.
“These 12 defendants acted in a concerted effort whose objective was the corrupt, alternatively irregular, diversion of resources from Eskom.
“As a result of their actions in the acquisition of OCH during this period, Eskom suffered at least R3.8bn in losses which it is legally obliged and morally burdened to recover, together with the interest thereon,” Eskom and the SIU said.
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