Secret cash deal ended ‘State Capture’ tiff between Paul O’Sullivan and Dudu Myeni lawyers, ENSafrica

11 Jun 2020

Law firm ENSafrica has confirmed that it smoked a multimillion-rand peace pipe with forensic investigator Paul O’Sullivan.

ENSafrica paid O’Sullivan R3.5-million as part of a secret settlement borne out of a dispute over the firm’s work for former South African Airways chairperson Dudu Myeni.

Daily Maverick has established that the deal also provides for O’Sullivan to stop any verbal or written criticism of the firm and, importantly, for him to abandon his assertion that ENS had advanced State Capture.

The agreement, a copy of which Scorpio has seen, contains a provision for O’Sullivan to “immediately cease” and no longer make or publish any remarks, allegations, statements… orally, by email, Twitter, or any other electronic medium about his dispute with ENS, or in relation to the firm and that he “abandons any assertion” that it had advanced State Capture.

There have been no formal claims of State Capture against ENS, but O’Sullivan – known for his ability to weaponise an email – over a number of years, accused the firm of allegedly having protected the controversial Myeni through its legal representation of her.

Myeni was not party to the settlement, although she is a key feature thereof. This is because O’Sullivan charged that her former lawyers at ENS had allegedly helped her to orchestrate his unlawful arrest, detention and malicious prosecution and that this had caused him physical and financial harm.

The firm denied this and, in response to questions from Daily Maverick, emphasised a boilerplate stipulation in the settlement agreement that there was no mea culpa.

Save for a single hindsight concession, it said it settled the dispute with O’Sullivan to avoid costly and drawn out proceedings.

According to ENS, payment of a once-off lump sum to O’Sullivan via EFT was done without “admitting any liability or wrongdoing”.

ENS told Daily Maverick that it had represented SAA and Myeni in her capacity as the chairperson of the airline in a separate dispute between her and O’Sullivan.

The settlement agreement does not contain details of that dispute, but Daily Maverick has confirmed that it involved a fake offshore bank account debacle in 2015.

(In that incident O’Sullivan unwittingly became embroiled in a plot to paint Myeni as an offshore millionaire, when he sent what later turned out to be allegedly fraudulent documents to the office of the president, the public protector and the national police commissioner. He apologised to Myeni upon realising the documents were fake, but the incident triggered a criminal case that was later withdrawn).

“Mr O’Sullivan alleged that ENSafrica had caused him harm during the currency of those proceedings (relating to the 2015 dispute) and in the context of the firm’s provision of legal services.”

While ENS denied this, Daily Maverick understands that O’Sullivan regards the payment from the firm as damages for a different arrest in 2016.

“As a matter of principle and legal ethics, we do not buy anybody’s ‘silence’ and do not believe that Mr O’Sullivan is susceptible of being bought by anybody.” — ENSafrica

On 1 April 2016, about to travel to the UK with his two young children, O’Sullivan was yanked from the aircraft at OR Tambo International and arrested on a bizarre immigration violation.

He believes the 2016 arrest was somehow linked to his efforts to investigate Myeni, who had wreaked havoc at the state-owned airline during her controversial tenure.

O’Sullivan told Daily Maverick that although ENS had denied his claims, the parties agreed to refer the matter to a senior advocate for adjudication.

However, the settlement agreement came about prior to a formal process.

Read O’Sullivan’s full response here.

The settlement agreement was concluded on January 23 2019 – six days before ENS formally terminated Myeni as a client (for unrelated reasons) in a delinquency application brought against her by civic organisation Outa.

It also came about roughly three months after O’Sullivan had publicly suggested that the firm’s work for Myeni had put it on the wrong side of State Capture.

In an October 2018 open letter, published after a clash with the Sunday Times newspaper, O’Sullivan said the following:

“I also intend to pursue and expose the role of ENS Africa, who seem happy to run with the foxes and hunt with the hounds at tax-payer expense. It was ENS that pursued criminal charges against me, on behalf of Dudu Myeni, whilst being paid by a bankrupt airline, from tax-payer funds.”

ENS maintains that the payment to O’Sullivan was not compensation because the firm had done nothing wrong and, based on a question from Daily Maverick, said it was also not intended to silence him.

“The settlement was concluded in order to resolve the dispute between us and Mr O’Sullivan (and his company) and not to “silence Mr O’Sullivan as suggested by you”.

“Your questions in this regard suggest far more powers of influence than we could ever possess. As a matter of principle and legal ethics, we do not buy anybody’s ‘silence’ and do not believe that Mr O’Sullivan is susceptible of being bought by anybody.”

The firm confirmed that O’Sullivan, as part of the settlement, abandoned his assertion that it had advanced State Capture and qualified:

“Because the issues between Mr O’Sullivan and Ms Myeni which lay behind our dispute directly concerned the question of ‘State Capture’, part of his issue with us was our alleged conduct in relation to State Capture in aiding and abetting Ms Myeni, which we deny.

“In an effort to resolve matters, Mr O’Sullivan and we agreed to refer the dispute to an independent senior counsel acceptable to both parties, for final adjudication. ENS agreed to pay the costs in this regard.

“Before that process was finalised, Mr O’Sullivan approached us through the offices of the senior counsel and proposed a settlement. The settlement was entered into without any admission by ENSafrica of any liability or wrongdoing, and was motivated by the realisation that all parties could avoid a long, drawn out hearing, and thereby minimise the costs.”

The law firm said it remains confident that all its work for SAA was above board and, because the settlement was reached without any admissions, there should be no question regarding professional fees earned.

The payment to O’Sullivan, reflected as a non-tax deductible expense in its audited financial statements, was done in line with the firm’s internal governance protocols.

The law firm also said it has made submissions to the Zondo Commission about its role as SAA’s legal adviser and that it has made every effort, publicly and privately, to disassociate from persons or entities connected to State Capture.

“In fact, ENSafrica took such steps even before the term State Capture had any currency in SA. We have turned away significant work where we have been uncomfortable with the role players, issues at stake and/or the assets in question.”

“We have publicly aligned ourselves with the fight against State Capture, and have acted in many matters where we have pursued alleged perpetrators of State Capture.” DM

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