Optimum coal, once the jewel in the Guptas’ business crown, will on Tuesday be the centre of a legal tussle in the high court in Pretoria as national director of public prosecution (NDPP) Shamila Batohi seeks preservation orders for Tegeta shares in the company.
The Guptas, well known for scoring billions of rand in tenders and contracts courtesy of their contacts in former president Jacob Zuma’s government, bought Optimum in 2016 and listed Zuma’s son, Duduzane, as a partner.
In Tuesday’s hearings, Batohi wants the court to grant urgent preservation orders and appoint a curator to control Optimum business, including the decisions of several business rescue practitioners who are on the brink of a sale.
Batohi says Tegeta bought Optimum Coal Mine and Optimum Coal Terminal “through fraud, money laundering, corruption and theft”.
She is seeking two preservation orders. First, she wants a preservation order for Tegeta’s shares in Optimum Coal Mine and Optimum Coal Terminal. The mine and terminal operations have been in business rescue for years.
Second, she has filed a claim against a Bermuda-based entity called Centaur Ventures Ltd (CVL) in which the Guptas held an interest through one of their sons-in-law. The NDPP claims CVL was “almost entirely financed” by the Guptas, represented by Akash Garg Jahajgarhia.
In 2013, Jahajgarhia married the Gupta brothers’ niece Chetali Gupta in a wedding at Sun City attended by various SA politicians and to which Zuma was invited. Duduzane, who has spoken publicly about his friendship with Gupta brother Rajesh “Tony” Gupta, attended, as did many cabinet ministers.
A private jet owned by the Guptas brought wedding guests from India to SA for the nuptials and landed at a national key point, the Waterkloof Air Force Base, causing a political and diplomatic crisis.
Papers lodged with the court reveal a web of sham loans and circular financial flows. The matrix of Gupta-linked transactions span companies in SA, Bermuda, China, Hong Kong, and the United Arab Emirates.
In her papers, Batohi said the Guptas’ half stake in CVL represented by Jahajgarhia was met by Danie McGowan, who held a 50% stake through Centaur Holdings Ltd (CHL).
She links McGowan, once a “close business partner” of the Guptas, to other deals with the Guptas, Salim Essa and Trillian. Following a reported falling out with the Guptas, McGowan has allegedly used his CVL stake to influence the business rescue of Optimum Coal Mine and Optimum Coal Terminal.
The state’s case hinges on the assertion that the rescue plans, which are set to be effected at the end of the month, are founded on the proceeds of crime based on CVL’s prepayment claims. If the plan were to go ahead, she insists, the business rescue practitioners would commit money laundering.
“The BRPs [business rescue practitioners] and Mr McGowan offer bald denials that the targeted assets are proceeds of crime. However, they provide no positive evidence of their own to refute any of the evidence adduced by the NDPP showing that the targeted property is proceeds of crime,” she said.
A detailed analysis of financial records shows how the Guptas sourced hundreds of millions of rand to buy Tegeta. The techniques identified by the NDPP include fixed deposits paid to the Bank of Baroda by Trillian Management Consulting and “an entity used by the Gupta family to launder money” called Albatime, for loans then granted to Tegeta.
“Three of these eight tranches (aggregating to more than R916m) are clearly the proceeds of unlawful activities. There are reasonable grounds to conclude that the fourth tranche (an additional amount of R842m) was also the proceeds of unlawful activities,” the court papers say.
Heads of argument submitted by the NDPP suggest the Investigating Directorate (ID) of the National Prosecuting Authority (NPA) is already benefiting from institutional knowledge and evidence gathered during the state capture inquiry.
Senior advocates Matthew Chaskalson and Kate Hofmeyr, who each led evidence at the commission, form part of the legal team that drafted the NDPP’s heads of argument.
The submission cites evidence including clauses from the Optimum sale agreement, a chart linking various businesses, schedules of transactions including figures to the cents, and three witness testimonies.
In August 2020, a change to the inquiry’s regulations allowed investigators who concluded their work for the commission to move to the NPA. The ID, which President Cyril Ramaphosa established in 2019, is the NPA’s designated office for state capture prosecutions. The ID, however, has been the subject of criticism and internal power struggles.
Advocate Andrea Johnson, a senior at the NPA who has been monitoring the reports filed by inquiry chair and acting chief justice Raymond Zondo, took over from advocate Hermione Cronje, who quit in December.
Correction: March 8 2022
We have corrected the names of Matthew Chaskalson and Andrea Johnson. Business Day apologises for the error.
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