High court seals NPA’s R500m Optimum Coal forfeiture settlement deal

The Gauteng Division of the High Court in Pretoria has granted the National Prosecuting Authority’s (NPA’s) application for two forfeiture orders to settle ongoing litigation over Optimum Coal Mine and Optimum Coal Terminal.

The order marks the end of the NPA’s case to seize Optimum assets on the grounds that the Gupta-owned Tegeta Resources bought it with the proceeds of crime in 2016.

They did this with the aid of cash raised via Eskom, Transnet and one of its pension funds and with the help of Eskom executives, Regiments Capital and a company in the Trillian stable.

Handed down on Thursday afternoon, the forfeiture orders flow from an agreement with former Gupta business associate, Daniel McGowan’s Templar Capital.

Daily Maverick first revealed details of the R500-million cash settlement last week.

It requires Templar to settle an approved list of Optimum creditors for just over R460-million, make payment towards curator fees and pay the NPA’s legal costs of roughly R20-million.

An amount of R19-million has been allocated to the Criminal Asset Recovery Fund.

In Thursday’s ruling, the court said it was satisfied that the draft orders put forward following the agreement between the NPA and Templar are appropriate as contemplated in terms of the Prevention of Organised Crime Act (Poca).

Optimum Coal is part of a basket of Gupta assets placed into voluntary business rescue after South African banks terminated their bank accounts a few years ago.

McGowan’s Templar acquired a R1.3-billion creditor claim in Optimum via a cession from Centaur Ventures Limited in Bermuda.

This claim came to serve as the basis for a debt swap deal that allows Templar’s indirect subsidiary, Liberty Coal, to take over Optimum.

Read more in Daily Maverick: NPA strikes forfeiture deal to end Gupta-linked Optimum Coal wars

In late 2022 the NPA’s Investigating Directorate, then under the stewardship of Hermione Cronje, filed the two preservation applications on the grounds that the assets were acquired by the proceeds of crime and/or were the instrumentality of crime.

One of the applications sought to attach the Gupta family’s shares in Tegeta as the owner of Optimum Coal Mine and Optimum Coal Terminal, and a second involved the preservation of Templar’s creditor claim.

Both orders were granted in May 2022 after which the NPA filed the forfeiture applications. By agreement with Templar, these are now settled.

In Thursday’s ruling, the court said it was satisfied that the draft order put forward following an agreement between the NPA and Templar is appropriate as contemplated in terms of Poca.

Significantly, the court accepted that cash used towards the purchase of Optimum was, on a balance of probability, the proceeds of crime.

The settlement only covers a portion of the overall R2-billion Optimum purchase price and the forfeiture amount is considered proportionate.

The settlement deal will likely put the NPA under fresh pressure to action prosecutions in respect of Optimum and the role played by some of State Capture’s usual suspects.

The undisputed proceeds of crime, according to the court order, are made up of a R660-million prepayment for coal that Eskom paid the Gupta-owned Tegeta Resources and Exploration plus cash extracted from Transnet and the Transnet Second Defined Benefit Fund (TSDBF).

In the case of Transnet and the TSDBF, the money was ultimately placed in fixed deposits that served as security for loans for the Gupta purchase.

These payments relate specifically to Regiments Capital, its offshoot, Trillian Capital Partners and Albatime, a company owned by Kuben Moodley, regarded as a Gupta fixer at the time.

Guptas tried, failed to block it