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The long wait for State Capture cases to come to court — we examine the delays in some of them

The long wait for State Capture cases to come to court — we examine the delays in some of them
Vincent Cruywagen
By Vincent Cruywagen
7 Jul 2024
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The case against police Crime Intelligence boss Richard Mdluli took 13 years before a trial date was set. Granted, in that time the National Prosecuting Authority underwent profound changes, mostly positive, but the long delays, also in court, are cause for concern.

The fourth instalment of Judge Raymond Zondo’s report on State Capture, released on 29 April 2022, recommended that about 30 people be investigated for prosecution by the National Prosecuting Authority (NPA).

Yet, two years later, only a few are ready for trial and some have had disappointing results. The Nulane Investments case was dismissed in April 2023 and the Kusile corruption case involving Eskom’s former interim chief executive, Matshela Koko, was struck off the roll in November 2023.

The outstanding matters, including the Guptas’ extradition, present a significant challenge to the seventh administration in ensuring that those implicated have their day in court.

Read more in Daily Maverick: How the Guptas’ flogged dodgy dairy equipment to Ace’s Free State

In his inauguration speech last month, President Cyril Ramaphosa said the people have demanded an end to the theft of public funds and the capture of the state.

The Zondo Commission of Inquiry into State Capture began its work on 21 August 2018, investigating allegations of State Capture, corruption and fraud in the public sector, including organs of state.

The cost of State Capture to South Africa has been estimated between R50-billion and R250-billion, though Ramaphosa told the commission that it could have cost the economy as much as R500-billion.

Read more in Daily Maverick: Here you go: The final State Capture report recommendations – at last

Let’s examine the lengthy delays in some State Capture-related cases that affected the entire country.

Richard Mdluli & Co


The trial of former police Crime Intelligence boss Richard Mdluli and his co-accused, former supply chain manager Heine Barnard and former chief financial officer Solomon Lazarus, will finally start on 7 October.

In a case that was initially registered in 2011, the three are accused of grossly abusing the police’s Crime Intelligence slush fund between 2008 and 2012.

Charges of fraud, theft and corruption against them include their using public money to pay for private trips to Singapore and China, the leasing of Mdluli’s private residence to the state to pay his bond, and the conversion of a witness protection house for personal use.

Timeline


Mdluli has already spent time behind bars for an unrelated matter. He was sentenced to five years in prison in September 2020 for kidnapping, assault and assault with intent to cause grievous bodily harm, which occurred while he was commander of the Vosloorus Police Station in 1998. He was released on parole in July 2022.

The corruption charges for which Mdluli will now stand trial were brought in September 2011, controversially withdrawn three months later by the then newly appointed NPA special director of public prosecutions, Lawrence Mrwebi, reinstated in 2015 by the NPA, struck off the roll just months later, and then eventually enrolled at court in 2020 after some documents were declassified.

Delays since then stem largely from the refusal by the South African Police Service (SAPS) to pay Mduli’s legal fees. He rejected this and referred the case for further review, which led to much toing and froing.

Finally, in May 2024, Judge Mokhine Mosopa ruled in the high court in Pretoria that the continued delays were unreasonable and caused substantial prejudice to the State, the accused and the state witnesses, and needed to end.

On 10 June, the court postponed the matter to 7 October for the trial to start, regardless of the pending outcome of Mdluli’s application to compel the SAPS to pay his legal fees.

Meanwhile, the Pretoria Regional Court sentenced Lazarus to 10 years’ imprisonment in December 2020 for accepting undue gratifications from an SAPS service provider between 2008 and 2011. He had been involved in acquiring cars for Crime Intelligence. Barnard was acquitted on all charges in this case.

Brian Molefe & co at Transnet


In part 2 of the State Capture report, Judge Zondo said “evidence establishes convincingly that State Capture occurred at Transnet” between 2009 and 2018. This, he said, was “accomplished primarily through the Gupta racketeering enterprise and those associated with it who engaged in a pattern of racketeering activity”.

The charges stem from a contract that was awarded to a consortium led by McKinsey in 2012 to advise Transnet, which resulted in  the procurement of 1,064 locomotives at a cost of more than R54-billion.

Regiments Capital was allegedly irregularly onboarded and ended up benefiting from the contract, whose value and scope ballooned.

Timeline


In August 2022, former Transnet group chief executive Brian Molefe, former group chief financial officer Anoj Singh and Regiments Capital directors Niven Pillay and Litha Nyhonhya appeared in the Palm Ridge Specialised Crimes Court after their arrest by the NPA’s Investigating Directorate (ID). They were charged with contravention of the Public Finance Management Act and fraud.

They joined former group chief executive Siyabonga Gama, former group chief financial officer Garry Pita, former group treasurer Phetolo Ramosebudi, Regiments shareholder Eric Wood, former Novum Asset Management director Daniel Roy and Albatime owner Kuben Moodley, who had been charged with fraud, corruption and money laundering.

With the companies and their representatives added, the number of those accused of multibillion-rand corruption at the parastatal stands at 18.

Nearly two years later, on 10 May, Molefe and his co-accused appeared in the High Court in Johannesburg, where their matter was postponed to 11 October for a trial date. In total, the fraud is alleged to have involved R398.4-million.

France Hlakudi & Co at Eskom


In October 2020, former Eskom bosses Abram Masango and France Hlakudi appeared alongside businessmen Antonio Jose Trindade and Hudson Kgomoeswana in the Palm Ridge specialised commercial crimes court on fraud and corruption charges related to R30-million in kickbacks allegedly paid for ensuring that Tubular Construction Projects (TCP) won a contract at Kusile power station worth R1.2-billion.

Court papers detailed how Masango and Hlakudi allegedly fraudulently pushed for TCP to be awarded a R745-million contract, signed in April 2016, to build air-cooled condensers at Kusile. The original price was deliberately understated and it ballooned to R1.2-billion after Eskom approved a modification to the project.

Read more in Daily Maverick: Asset Forfeiture Unit to seize R33m in assets in Eskom water-trucking corruption case

Trindade, a TCP director at the time, and Michael Lomas, TCP executive and later chairperson, are alleged to have paid Masango and Hlakudi through various channels, including Kgomoeswana’s Babinatlou Business Services.

The case, which started in 2019, has had many delays in getting under way because of several postponements. Some of the delays were because Hlakudi changed his legal representatives.

Another stumbling block preventing the matter getting to trial has been the extradition of Lomas (75) from England. He was arrested on 15 April 2021 in Emsworth, London, and granted bail.

In May, the England and Wales High Court denied Lomas’s application to appeal a previous order that he should be extradited to South Africa. This means he is a step closer to being sent back here.

Hlakudi and his co-accused are due back in court on 31 July.

Matshela Koko’s case struck off roll


The corruption charges against former Eskom’s Koko and his co-accused relating to a multimillion-rand irregular contract for building the Kusile Power Station were struck off the roll for unreasonable delay in the Middelburg specialised commercial crimes court in November 2023.

Koko, his wife and two stepdaughters were among eight people arrested on 27 October 2022 on corruption charges stemming from alleged irregular contracts valued at more than R2-billion granted for the building of Kusile.

Read more in Daily Maverick: Don’t hold your breath waiting for State Capture culprits to end up in orange overalls

Koko stood accused of being central to a “corrupt scheme” in which he allegedly helped Swiss engineering firm ABB to secure a contract at the power station. According to the prosecution, kickbacks flowed to a number of figures, including Koko and his family.

The charges of fraud, corruption and money laundering can be reinstated once the state is ready to bring the matter to trial.

Nulane Investments case dismissed


In April 2023, the High Court in Bloemfontein found that the State had failed to prove its case against the eight accused in the R24.9-million Nulane Investments matter, and it was dismissed.

It was the NPA’s first State Capture case to proceed to trial and it came to an embarrassing end.

The accused in the case were former head of the Free State Department of Agriculture and Rural Development Peter Thabethe; former department accounting officer Limakatso Moorosi; and former department chief financial officer Seipati Dhlamini.

The other accused were Iqbal Sharma, a high-flying businessman and former senior official in the Department of Trade and Industry; Dinesh Patel, Sharma’s brother-in-law and the representative of his company Nulane Investments 204; and Ronica Ragavan, a long-time Gupta enterprise employee and the director of Islandsite Investments One Hundred and Eighty.

The case was based on an alleged corrupt contract in which the Free State government paid R24.9-million to Nulane Investments to conduct a feasibility study for the province’s flagship Mohoma Mobung project, on the basis that the company had unique skills to perform the work.

The controversial Estina (now Vrede) dairy project was one of the programmes included in the Mohoma Mobung campaign. The R280-million corruption case, in which former minister of mineral resources Mosebenzi Zwane is one of the 16 accused, was transferred to the Bloemfontein High Court in November 2022.

A huge impediment to this case has been the decision by the United Arab Emirates (UAE) to refuse the extradition of Gupta brothers Atul and Rajesh.

The UAE rejected South Africa’s bid to extradite the brothers in February 2023, but South African authorities were only alerted to this on 6 April that year.

In April 2024, the NPA urged the Presidency to help to resolve an impasse with the UAE over what it described as the Gulf nation’s lack of “willingness” to extradite Atul and Rajesh Gupta, who are wanted on charges of money laundering and fraud.

Who is to blame for delays?


Daily Maverick asked the Organisation Undoing Tax Abuse (Outa) who should be held accountable for the prolonged delays in all these cases. It elicited a straightforward, simple response from Outa’s CEO, Wayne Duvenage, who said: “We believe the blame must ultimately be laid at the feet of the NPA leadership, advocate Shamila Batohi.

“Of course one could say the NPA to this day lacks the required skills and resources, with the unit being negatively impacted during the [Jacob] Zuma-Shaun Abrahams period, but this is no excuse for the long delays in the matters you have raised, along with cases that we and others have presented to the NPA and the ID.”

Duvenage also said the ANC, during the previous administration, should bear much of the blame for failing to increase the NPA’s capacity. “We believe there is also an aspect of political will lacking, as it might not be in the best interests of the ANC to provide the necessary resources to the NPA to fast-track many of these cases, many of which implicate its leadership who, if cornered and having to get into the dock, could open the floodgates on others in the top echelons of the ANC.”

However, Duvenage added that Outa is confident that the new administration will be more aggressive in bringing these issues to the attention of Parliament and helping to build the capacity of the NPA, thereby greatly improving its efficacy. However, he said it is disappointing to see individuals who were seriously implicated during the State Capture Inquiry still sitting in Parliament and even filling a Cabinet position.

NPA efforts continue


ID spokesperson Henry Mamothame confirmed the trial date for the Mdluli case and said the Molefe matter had been postponed for a trial date.

He further noted that the NPA is awaiting judgment on Lomas’s latest appeal in the Eskom case, and that an investigation is under way with the goal of re-enrolling the case against Koko and his co-accused.

The Nulane matter is at the appeal stage, with the defence needing to file its heads of argument. The Supreme Court of Appeal will then advise when oral arguments will be heard. The Estina matter has been set down for trial from 5 August to 13 September, and the efforts to extradite the Guptas are still continuing.

“All other State Capture matters as per the Zondo Commission recommendations are still under investigation,” Mamothame said. DM

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.

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