The Investigating Directorate’s (ID) agreement with global company Asea Brown Boveri (ABB) not to prosecute it after it paid R2.5bn in punitive reparations in a state capture case faces a legal test before the Gauteng High Court, as former Eskom CEO Matshela Koko wants the deal set aside.
Koko argues that there is no legislative authority that allows the state to reach such a deal in a criminal case, but the National Prosecuting Authority (NPA) describes Koko’s case as “fundamentally flawed”.
In December 2022, the NPA announced the ID (now the Investigating Directorate Against Corruption) reached a settlement with the Swedish-Swiss engineering company not to prosecute.
In exchange, ABB agreed to pay R2.5bn to the state in reparations and assist law enforcement with evidence of tender corruption at Eskom.
The company had R2.2bn worth of contracts with Eskom for Kusile Power Station in 2015.
Part of ABB’s agreement would be to give the NPA evidence linking Koko to bribery and corruption charges.
The NPA, opposing the case, argued Koko’s litigation is aimed at collapsing the criminal case against him.
Koko is among former executives probed on tenders allegedly awarded through bribes, but his case was struck off the roll in 2023 due to delays.
Koko wants the high court in Johannesburg to issue an order declaring the immunity deal with ABB South Africa to be unlawful and unconstitutional, setting it aside.
ABB has warned if the agreement were to be set aside, the state might have to pay back the R2.5bn.
Koko’s legal representative, advocate Frans Barrie, argued before judge Richard Moultrie on Monday that the agreement was unlawful because there is no legislation that exists authorising what has been described as a “novel” deal.
“The non-prosecution agreement is unlawful. No legislation exists that authorises the NPA to conclude agreements of the like of the non-prosecution agreement … which the NPA agreed not to prosecute ABB SA and the ABB group companies for serious crimes in exchange for, among other things, payment of a large sum of money into the Criminal Asset Recovery Account,” he argued.
The NPA also usurped the court’s powers when considering the payment as a form of “punishment or penalty” because only the judiciary has legal power to issue penalties, he argued.
This is as Koko seeks a declarator that the ID overreached by usurping the function of the courts when it entered into a non-prosecution agreement with ABB South Africa.
“It is for the court to decide if a crime has been committed and what the penalty should be. Without legislative authority to exchange money for non-prosecution means the NPA has usurped the powers of the court.”
The argument is that the NPA jumped the gun and snatched the bargain of R2.5bn, and Barrie maintained that the right to punish through penalising rested with the judiciary.
Moultrie quizzed whether there is anything in the constitution that prohibits the NPA from entering into such agreements and whether anything in the constitution exists that stipulates that only the judiciary enjoys the power to punish in the case of mutual agreements.
Barrie argued that the constitution stipulates that judicial authority of the republic is vested in the courts, adding that the agreement imposed a fine as a form of punishment.
For the NPA, advocate Geoff Budlender argued that Koko seeks to collapse the criminal case against him in challenging the agreement.
“What is special about this case is that the offender self-reported. The entity said, ‘We committed the offence; we are guilty.’ They said, ‘Our company has entered this corrupt arrangement with Mr Koko.’
“They said, as you are aware, ‘Without our assistance you do not have a case’,” Budlender said.
He said the suggestion there was special treatment for ABB was absurd. He argued that the applicants failed to identify a provision that stipulates the NPA needed judicial oversight in an agreement such as that it entered into with ABB.
“We submit the R2.5bn payment is irrelevant to Koko’s complaint because it affects no one’s rights.”
Budlender said the NPA would have entered into the agreement with ABB without the payment because assistance in the prosecution is vital.
He emphasised the NPA has the power to decide to prosecute or not to prosecute.
“If you ask where the legal authority is, it is in the policy in black and white. We draw attention to the discretion the prosecutor has. Mr Koko’s case is fundamentally flawed.”
It is Koko’s case that the agreement is a breach of the constitutional right that everyone is equal before the law because he was never given the opportunity to negotiate with the NPA like ABB was.
He argues the agreement sets a culture that only corporates can reach such deals with the NPA because of deep pockets, while discriminating against those who do not have large sums of money.
ABB’s evidence against Koko falsely implicated him, Barrie said.
“There is no evidence of money going to Mr Koko. ABB SA is asserting he is guilty and is assisting NPA in its attempt to prosecute him. He has shown he will never be found guilty. He was not on the scene. The decisions were taken by the board. [It] is very difficult to see how he could be found guilty of anything,” he said.
Reuben Phala, a representative of civil organisation Democracy in Action, an intervening party, argued that the NPA’s decision was irrational because it would have the effect that if a person steals a car, they can negotiate and pay a penalty and not be prosecuted.
“The public outcry of what happened at Eskom cannot be bought,” he said.
“What is so special about this entity [ABB]? That is the question they need to answer so that we can sleep at night knowing that our NPA prosecutes without fear or favour.”
The case will continue being heard on Tuesday, facing pushback from ABB and the NPA.
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