The first “state capture trial”, which involved the Free State department of agriculture and entities linked to the Gupta family, was tossed out by the court, before the accused were even asked to defend the case.
The Free State High Court slammed prosecutors for failing to “pass even the barest of thresholds” to establish criminal liability for the accused. This means the months of work and resources devoted to the case since the beginning of the year will bear no fruit, as the accused walk away untouched.
Jameelah Omar, associate professor of law at the University of Cape Town, who lectures in criminal procedure, says criminal discharges like these where the state has failed to make out a case, are important. “It would be a waste of public resources,” she says, to continue the trial if “the state’s case is so weak”.
Analysing the judgment, Omar says: “The witnesses called by the state could only provide circumstantial evidence and it appears that the investigation was not as thorough as it should have been. For the offences charged, it was necessary to establish intention, which is a subjective inquiry — that is, did the accused themselves intend the unlawful conduct — and in the absence of witnesses providing evidence and corroboration of same, the state could not prove fault beyond a reasonable doubt.”
Linked to the infamous Vrede Dairy project, the accused were charged with corruption and fraud. The 2012 project established by the Free State provincial department of agriculture & rural development, aimed at empowering black farmers. The community, however, was sidelined as other parties, with ties to the Guptas, allegedly benefited unlawfully instead.
The state accused officials from the department and others of paying almost R25m to Gupta-linked company Nulane Investments. This was for a feasibility study as part of the project.
The state charged eight people, including the former head of the department, with corruption. After making its opening case and calling its witnesses, however, Free State High Court acting judge Nompumelelo Gusha was called on by all the accused (except one) to have the charges dropped. This was done before the accused themselves had even presented any of their own witnesses or testimony.
Gusha examined the state’s case and found problems with every witness and evidence presented by the state.
No witness, for example, could testify to the authenticity of any document. Where witnesses gave their version of events, it served little purpose since the original documents they relied on were not before the court.
Other important documents were different versions from those the witnesses had sight of. For example, a Deloitte employee testified he “conducted the feasibility study and produced a report”, but “the report that [was] served before the court ... is not what he and his team produced and handed [in].” Therefore he could be of “no assistance” to the court.
Gusha also criticised other witnesses as merely having knowledge of how processes were supposed to work, and none of what actually happened.
One witness who worked at Absa testified about a particular Absa facility used by Sahara Computers, founded by Atul Gupta. This was part of the state’s attempts to link the Gupta empire to the department.
However, during cross-examination, this came to nothing as the Absa employee confirmed a client “would [not] necessarily have authorised each transaction” with that facility. Gupta, in fact, delegated authorisation to others. Worse still, she testified the state had never requested that she check “who of the operators ... was responsible for the transactions.” She then conceded that this “information was readily available and would have been furnished had it been requested by the state”.
It is an inescapable fact that almost R25m of taxpayers’ money left the fiscus. The question that remains is why and who facilitated this. Regrettably ... the institutions responsible to answer those questions failed.
— Nompumelelo Gusha, acting judge
Gusha also noted the findings of a financial investigator who works for the National Prosecuting Authority’s Investigative Directorate and who was also involved in the state capture commission’s operations. He analysed various bank statements and made adverse findings pertaining to another Gupta-linked company, Islandsite Investments.
However, under cross-examination, he admitted he had made “a fundamental error and started with the wrong opening balance” in his calculations. This then “led to him making the erroneous finding in his report”. Had he used the correct opening balance, there would have been “nothing sinister in the manner in which the books of lslandsite were kept”.
“To say that the manner in which this investigation was conducted is a comedy of errors would be the understatement of the millennia [sic],” Gusha wrote in her judgment.
One witness, Shadrack Cezula, who himself was implicated in criminal activity, testified to obtain indemnity from prosecution. He said that he was told by his superior to make a submission to appoint Nulane Investments and sign off. Gusha found him to be “evasive”, with no evidence to support him, and he refused to align himself to the fraud that occurred. The court refused to grant him an indemnity.
In the end, Gusha concluded that all she heard “was the ineptitude of the investigators”, and “the lackadaisical manner in which evidence and disputed documents [were] handled”. She ruled that “just on these aspects only, the state’s case as presented was still-born”
The state attempted to use the common purpose doctrine to implicate the accused, but did nothing to show this.
Gusha concluded: “The decision I reach ... will invoke a sense of loss, if not dejection, to the citizenry of this country. It is an inescapable fact that almost R25m of taxpayers’ money left the fiscus. The question that remains is why and who facilitated this. Regrettably ... the institutions responsible to answer those questions failed. With their concessions, [the state’s own witnesses] put the death knell on the state’s case.”
Responding to the judgment, Investigating Directorate head Andrea Johnson said: “We will be reflecting on the judgment with a view to determine legal avenues to explore. The outcome of this case has no bearing on our ability to prosecute other state capture cases. We remain resolute in our commitment and ability to vigorously prosecute those responsible for state capture and corruption.”
Omar suggests that the state “should ensure that all necessary and available documentary evidence is [properly] obtained during the investigation”. This would allow for less reliance “on the credibility of witnesses”.
As this judgment shows, when that is all the state has, its case can collapse in its entirety.
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