First testimony in Gupta-linked Vrede Dairy Project trial points finger at Free State agriculture department

The Mohoma Mobung agriculture project — at the centre of the case that began on Monday — is a feasibility study with a price tag of R24.9-million paid by the Free State agriculture department to Nulane Investments (one of eight accused).

The study led to the controversial Vrede Dairy Project that cost the provincial department R280-million.

Read more in Daily Maverick: “Estina Dairy Farm: A corruption crime scene in Vrede”

The eight accused include two former Free State Department of Agricultural and Rural Development heads of department — Peter Thabethe and Limakatso Moorosi — and former chief financial officer Seipati Dhlamini.

Thabethe and Moorosi face charges of fraud and contravening Section 86 (1) of the Public Finance Act. The State alleged that the former heads of department unlawfully and wilfully contravened the Public Finance Management Act that resulted in wasteful expenditure.

According to the charge sheet, Nulane Investments — awarded the contract for the feasibility study — did not have the capacity and thus subcontracted Deloitte. It further alleges that more than R19-million of the R24.9-million was paid into a Gupta brothers’ offshore account. Upfront payments were allegedly made and some of the money was used to settle service provider invoices, the charge sheet alleges.

Read more in Daily Maverick: “The Estina/Vrede dairy scandal: A Gupta project from beginning to end”

The other accused are Iqbal Sharma, Dinesh Patel and Ronica Ragavan. A second company — Islandsite Investment One Hundred and Eighty — of which Ragavan was a director, is also among the accused.

All the accused have pleaded not guilty. Acting Judge Nompumelelo Gusha prohibited media from live streaming or recording witness testimony during the trial.

The first witness took the stand today. Siphiwe Mahlangu of the National Treasury testified on documents (provisionally accepted into evidence) that he received from the police.

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Mahlangu said he had been asked to peruse the documents and determine whether the provincial department had followed procurement processes, whether the contract had been in line with the requirements of a public/private partnership and whether the deviation that had been approved had adhered to Treasury rules and regulations.

Mahlangu said that in his opinion the contract might have been awarded illegally. During his investigation, he found that no public/private partnership had been registered with the provincial treasury and the deviation from tender procedures had also not been in line with Treasury regulations.

During cross-examination, Mahlangu’s qualifications were questioned and he was asked whether he was in a position to offer an expert opinion on the contract. Thabethe’s legal representative, Daniel Mantsha, drilled the witness on whether a deviation from procurement processes was at the discretion of an accounting officer — in this case, the head of department.

The case is set down for six weeks. Cross-examination is expected to continue on Tuesday. DM

Read our Explainer on this case and other related cases here:

https://www.dailymaverick.co.za/article/2023-01-23-nulane-investment-trial-inside-the-gupta-linked-r24-9m-free-state-fraud-and-money-laundering-case/