What happens to the money lost to corruption after the state claws it back?

Are you telling me that the government sometimes gets its stolen money back?

Indeed it does! This is the major purpose of the Asset Forfeiture Unit (AFU), but money is also recovered through the Special Investigating Unit (SIU) and through litigation instituted by individual government departments.

How does it work?

Let’s start with the AFU, which gets money back through a legal instrument called the Prevention of Organised Crime Act (Poca) – as explained to DM168, in more technical language, by the NPA’s Bulelwa Makeke.

Imagine that Mr X has just been found guilty by a court of stealing money from the government. Once he has been convicted, the AFU can apply to the court to determine exactly how much money they should demand back from Mr X. The court decides on a figure after an investigation, and grants the AFU the power to confiscate that amount from Mr X.

In order to make sure that Mr X doesn’t suddenly get rid of all his luxury goods and houses, and empty his bank accounts, the court can grant a “restraint” – meaning that none of that stuff can be touched until the money has been paid back.

Is a “restraint” the same as a “freezing order”?

Yes. If you read that Mr X’s assets have been frozen, that’s what that means. Yet another term for the same thing: “preservation order”.

Then there’s also a way that the AFU can grab Mr X’s loot without his having been found guilty by a court. This, Makeke explained, is called “non-conviction-based forfeiture”, or “civil forfeiture”, and it specifically targets Mr X’s assets. There has to be a direct link between Mr X’s criminality and the assets, however – so the AFU must be able to prove that Mr X used the money he stole from the government to buy the house or car they want to nab.

The SIU recoups money for the state through civil litigation. In other words, it would in effect sue Mr X for the money he pilfered.

Can you give me a real example?

Here’s one from August 2022. The SIU announced that it had obtained a preservation order “to freeze five luxury properties in gated estates, and pension benefits valued at approximately R1.8-million, linked to Transnet executives and their spouses”. That freezing order prohibited four named people from “selling, leasing, donating or transferring title [of] their luxury properties in Rosebank and Dainfern”.

In translation, the SIU presented evidence to the court to show that these houses were bought with plundered Transnet money. When the civil legal proceedings wrap up, those houses will be sold and the money returned to the state, where it forms part of a pot known as “recoveries”.

How big can the freezing orders get?

Enormous. In March 2022, the AFU obtained a freezing order valued at R2.4-billion related to the Optimum coal mine and its assets, bought with the proceeds of crime by the Gupta-owned Tegeta company. The AFU’s Priya Biseswar later wrote in Daily Maverick that this was the largest freezing order in the AFU’s history, and that its value was expected to rise to over R8-billion when the value of the mine itself was thrown in.