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[2023] ZAFSHC 126
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S v Thabethe and Others (08/2022) [2023] ZAFSHC 126 (21 April 2023)
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IN
THE HIGH COURT OF SOUTH AFRICA FREE STATE
DIVISION,
BLOEMFONTEIN
08/2022
THE
STATE
V
MBANA
PETER THABETHE AND 7 OTHERS
JUDGMENT
INTRODUCTION:
[1]
In this matter Mr Serunye, Ms Witbooi and Ms
Nkula-Nyoni appear for the State, Messers. Mantsha, Edeling, Semenya,
Forbay, Oldwage
and Hellens for the defence.
[2]
The defence at the close of the State's case,
brought an application in terms of section 174 of the Criminal
Procedure Act, Act
51 of 1977 for the discharge of accused 1, and
accused 3-8.
[3]
With regards to accused 2 no such application was
brought and she is merely mentioned herein for the sake of
completeness.
[4]
The State and defence
counsels
in addition to their oral submissions,
favoured this court with comprehensive heads of
argument. I am indebted to them.
THE
CHARGES:
[5]
The charges as preferred by the State are
extensive and have been fully canvassed in the indictment and on the
record. I shall therefore
only refer thereto succinctly as I am
loathe to overburden this judgment any more than is necessary.
[6]
Count 1 relates to accused 1 and 2 only. The State
alleges that the accused are guilty of contravening section 86(1) of
the Public
Finance Management Act (PFMA), Act 1 of 1999, read with
the provisions of sections 1, 36, 38, 39, 44(2) and 76 (4)(c) of the
Act,
and further read with the provisions of section 217 (1) of the
Constitution. In respect of this count the State conceded that the
evidence against accused 1 fell short of the required threshold and
accordingly the application for the discharge of accused 1
in respect
in respect of count 1 should succeed. Accordingly,
I
shall not take this any further than I have.
[7]
Count 2 relates to all the accused. The State
alleges that all the accused unlawfully and intentionally and with
common purpose
committed fraud.
[8]
Count 3 relates to accused 4, 5, 7 and 8 only. It
is alleged that they are guilty of contravening the provisions of
section 4 read
with the provisions of sections 1, 8(1) of Act 121 of
1998
and further
read
with the provisions
of section
51(2)
of the criminal law amendment act 105 of 1997.
[9]
The fourth and final count relates to accused 4,
5, 7 and 8. It is alleged that they are guilty of contravening the
provisions of
section 4 read with the provisions of sections 1, 8 (1)
of Act 121 of 1998 and further read with the provisions of section
51(2)
of the criminal law amendment act 105 of 1997.
THE
PLEA(S)
[10]
All the accused tendered pleas of not guilty to the charges as
preferred against them. All but accused 2 and 6 elected
to exercise
their constitutional right to remain silent. As accused 2 is not the
subject of this application I shall not venture
to deal with her plea
explanation. Accused 6 proffered admissions pertaining to certain
entities and their registration details
in terms of section 220 of
the CPA, which admissions have been fully canvassed on the record. No
purpose would be served by repeating
same here.
LEGAL
POSITION ACCOMPLICE WITNESS
[11]
The aforesaid charges evince that the alleged
unlawful conduct of accused 1-3 and Mr Cezula in respect of count 1,
is a precursor
to the remaining counts, as their alleged unlawful
conduct gave rise to the remainder of the charges as preferred. As
the other
alleged role players i.e. accused 1-3, stand accused in
this court, the State's case, on the disputed
facts, i.e. the circumstances surrounding and leading up to the
compilation and approval
of the deviation submission as well as the
authenticity of the signatures thereon, in respect of counts 1 and 2,
is premised primarily
on the evidence of Mr Cezula, who at the
request
of the State,
was
warned
by this court in terms
of
section 204 of the CPA, in respect of the offence of fraud. It deems
to be noted already at this stage of the judgment that Mr
Cezula is,
on this score, a single witness. His evidence therefore, as both a
single and an accomplice witness stands to be treated
with caution.
[12]
It is established law that a conviction can follow
even on the evidence of a single competent witness provided same is
trustworthy
and satisfactory in all material respects. In
S
v Sauls and Another
1981 (3) SA 172
(A)
the
court held that;
"There
is no rule of thumb test or formula to apply when it comes to a
consideration of the credibility of the single witness.
The trial
Judge will weigh his evidence, will consider its merits and demerits
and, having done so, will decide whether it
is trustworthy and
whether, despite the fact that there are shortcomings or defects or
contradictions in the testimony, he
is satisfied that the truth has
been told."
[13]
As regards the evidence of an accomplice, the court in
S
v
Hlapezula
and Others
1965 (4) SA 439
(A) at
440
D-H:
explained the position thus;
'It
is well settled that the testimony of an accomplice requires
particular scrutiny because of the cumulative effect of the following
factors. First, he is a self confessed criminal. Second, various
considerations may lead him falsely to implicate the accused,
for
example, a desire to shield a culprit or, particularly where he has
not been sentenced, the hope of clemency. Third, by reason
of his
inside knowledge, he has a deceptive facility for convincing
description -
his only fiction being the
substitution of the accused for the culprit. Accordingly there has
grown up a cautionary
rule of practice
requiring
(a) recognition
by
the trial court of the foregoing dangers,
and
(b) the safeguard
of some factor reducing
the risk of a wrong conviction, such as a corroboration implicating
the accused in the commission of the
offence, or the absence of
gainsaying evidence from him, or his mendacity
as
a witness,
or the implication by the
accomplice of someone near or dear to him; see in particular
R
v Ncanana,
1948 (4) SA 399
(AD) at 405-
6;
R v Gumede,
1949
(3) SA 749
(AD) at 758;
R v Nqamtweni
and Another,
1959
(1) SA 849
(A) at 897G-898D. Satisfaction of the
cautionary rule does not necessarily warrant a conviction, for the
ultimate requirement is
proof beyond reasonable doubt, and this
depends upon an appraisal
of all the
evidence and the degree of the safeguards aforementioned.' See also
Tshiki v The State neutral
citation (358/2019)
(2020]
ZASCA
92 (18
August
2019).
[14]
It is trite that by corroboration is meant other evidence which
supports the evidence of the complainant,
and which, on the issues in
dispute, renders the evidence of the accused less probable.
APPLICATION
FOR DISCHARGE
[15]
Section 174 of the Criminal Procedure Act provides
as follows;
"If,
at the close of the case for the prosecution at any trial, the court
is of the opinion that there is no evidence that
the accused
committed the offence referred to in the charge or any offence of
which he may be convicted on the charge, it may return
a verdict of
not guilty."
[16]
It is trite that "no evidence" does not
mean no evidence at all, but rather that there is lack of evidence on
which a
reasonable court, acting carefully, might convict. Whether or
not a discharge should be granted at the close of the State's case
entails an exercise of a discretion by the trial court, a discretion
which it must exercise judicially
(See
in this regard S v Dewani (CC15/2012)
[2014] ZAWCHC 188(8 December
2014).
[17]
In
S v Lubaxa,
2001 (2) SACR 703
(SCA)
the
court held that;
"I
have no doubt that an accused person (whether or not he is
represented) is entitled to be discharged at the close of the
case
for the prosecution if there is no possibility of a conviction other
than if he enters the witness box and
incriminates
himself.
The
failure to discharge
an accused in those
circumstances, if necessary
mero motu,
is in my view a breach of the rights
that are guaranteed by the Constitution and will ordinarily vitiate a
conviction based exclusively
on his self-incriminatory evidence.
The
right to be discharged at that stage of trial does not necessarily
arise, in my view, from considerations relating to the burden
of
proof (or its concomitant, the presumption of innocence) or the right
of silence or the right not to testify, but arguably from
a
consideration that is of more general application. Clearly a person
ought not to be prosecuted in the absence of a minimum of
evidence
upon which he might be convicted, merely in the expectation that at
some stage he might incriminate himself. That is recognised
by the
common law principle that there should be 'reasonable and probable'
cause to believe that the accused is guilty of an offence
before a
prosecution is initiated
(Beckenstrater v Rottcher
and
Theunissen
1955 (1) SA 129
(A) at 135C-E), and the constitutional
protection afforded to dignity and personal freedom (s 10 and s 12)
seems to reinforce it.
It ought to follow that if a prosecution is
not to be commenced without that minimum of evidence, so too should
it cease when the
evidence finally falls below that threshold. That
will pre-eminently be so where the prosecution has exhausted the
evidence and
a conviction is no longer possible except by self
incrimination. A fair trial, in my view, would at that stage be
stopped,
for it threatens thereafter to infringe other constitutional
rights protected by s 10 and s 12."
[18]
It is trite that the credibility of State
witnesses at this stage of the proceedings only play a very limited
role as it can only
be ignored only if it is of such poor quality
that no reasonable person could possibly accept it. In this regard
the court in
S v Agliotti,
2011 (2) SACR 437
(GSJ)
per
Kgomo, J held as follows;
"In
S
v
Lavhengwa
1996 (2) SACR 453
(W)
the view was expressed that the
processes under s 174 translate into a statutorily granted capacity
to depart discretionally, in
certain specific and limited
circumstances, from the usual course, to cut off the tail of a
superfluous process. Such a capacity
does not detract from either the
right to silence or the protection against self-incrimination. If an
acquittal flows at the end
of the State case the opportunity or need
to present evidence by the defence falls away. If discharge is
refused, the accused still
has the choice whether to testify or not.
There is no obligation on him to testify. Once this court rules that
there is no prima
facie case against the accused, there also cannot
be any negative consequences as a result of the accused's silence in
this context
.
...
I
agree with the view that it is an exercise in f tility to lay down
rigid rules in advance for an infinite variety of factual situations
which may or may not arise. It is thus, in my view, also 'unwise to
attempt to banish issues of credibility' in the assessment
of issues
in terms of s 174 or to 'confine judicial discretion' to 'musts' or
'must nots'."
[19]
The legal position with regards to applications in
terms of section 174 of the CPA can be summarised thus, therefore
summarise the
legal position regarding applications in terms of
section 174
:
(a)
An accused
person is
entitled to be discharged
at the close of
the case for the prosecution if there is no possibility of a
conviction other than if he enters the witness box
and incriminates
himself;
(b)
In deciding whether an accused person is entitled
to be discharged at the close of the State's case, the court may take
into account
the credibility of the State witnesses, even if only to
a limited extent;
(c)
Where the evidence of the State witnesses
implicating the accused is of such poor quality that it cannot safely
relied upon, and
there is accordingly no credible evidence on record
upon which a court, acting carefully, may convict, an application for
discharge
should be granted.
(See S v
Dewani
supra)
[20]
Having outlined the legal position,
I
now turn to analyse the evidence. The facts of this case are very
laborious as evinced by the number of witnesses called and the
duration of this trial. Once more I am loathe to overburden this
judgment, however in the circumstances I must.
MR.
SIMPHIWE STANLEY MAHLANGU:
[21]
Mr Mahlangu plies his trade at National Treasury
as a Director Forensic audits and has been with said unit for the
past 11 years.
His duties entail the performance of forensic and
performance audits in terms of the Public Finance Management Act. He
is responsible
for all 3 spheres of government and renders support to
these as well as law enforcement
agencies.
[22]
During February 2021 he was approached by Lt. Col.
Mtolo, who furnished him with certain documents and requested that he
peruse
same and determine which procurement procedure was followed by
the Department in appointing accused 5 as a service provider, more
specifically whether the procedure followed was a deviation from
normal procurement process or a PPP, and if so ascertained, to
then
determine whether the correct procurement procedures were followed.
He explained a PPP to be a commercial transaction between
a state
entity and a private entity wherein the private entity assumes a
function that ordinarily resides
with the
state. Alternatively, that it could be a commercial transaction
that involves both the state and a private entity
wherein the private entity will utilize a building belonging to the
state. In
such transactions the private entity would absorb most of
the operational, financial and technical risks.
[23]
In order to aid him in his quest, he was favoured with the following
documents which were provisionally admitted
into the record;
•
A
submission
drafted
by
Mr
Cezula
to
deviate
from
prescribed
procurement processes
•
A
contract
concluded
between
the
Free
State
Department
of
Agriculture and Nulane Investments
•
National
Treasury Practice Note 6 of 2007/2008 dealing with issues relating to
deviations from normal procurement processes
•
A
letter from an entity
known
as World Window
lmpex
which was attached to the submission drafted by Mr Cezula
•
A
letter from Dr Masiteng in response to Mr Mahlangu's letter.
[24]
He also extracted from the National Treasury Departmental system the
BAS payment printouts which indicated
that the Department of
Agriculture on diverse dates made payments to accused 5 totaling R24
984 240 (twenty four million nine hundred
and eighty four two hundred
and forty rand).
[25]
At this stage already, it is apposite to mention that all these
documents were copies and not the original
documents. After some
spirited objections from the defence I provisionally admitted these
into the record. I shall at the opportune
time revert to this aspect.
[26]
He testified further that the submission for deviation from
prescribed procurement processes, dated 06 October
2011 was compiled
by Mr Cezula. In it Mr Cezula sought approval for a deviation from
the departmental Supply Chain
Management
(SCM) processes in order to appoint Nulane Investments to
perform due diligence and feasibility studies for
the Mohoma Mobung Project. As
motivation
for the sought deviation, Mr Cezula used the contents of the World
Window lmpex India Pvt. Ltd letter which I deal with
in more detail
later on in this judgment. It would appear that it is on the strength
of this letter that Mr Cezula recommended
that deviation from the SCM
processes be granted and that Nulane Investments be appointed as a
service provider. The deviation
memorandum appears to have been
signed and dated on the 06 October 2011 in recommendation by Mr
Cezula, and Ms Dhlamini (Accused
3), who at the time was the CFO of
the Department. Same appears to have been signed on the 07 October by
Mr Thabethe (Accused 1),
in his then capacity as the Head: Rural
Development, and appears to have been approved on the same date by
Accused 2, Dr Moorosi,
in her capacity as the accounting officer of
the Department of Agriculture and Rural Development.
[27]
He testified that as per Treasury Practice Note 6/2008, regulation
16A6.4 (hereinafter Treasury Regulation 16A6.4)
a service provider
could be appointed without following prescribed procurement processes
in cases of emergency or in instances
where the goods and or service
sought to be procured was available only from a sole service
provider.
[28]
He further established that SSM 2 was a copy of a
contract concluded
between the Department
of Agriculture and Rural Development and Nulane Investments signed on
the 28 October 2011 in Sandton. As
appears from said document the
signatories purported to be Accused 6, Mr Dinesh Patel, as the
Project Director for and on behalf
of Nulane Investments. Mr Patel
was at the time a person unknown to him. Underneath Mr Patel's
purported signature, a Praveen Permal
purportedly appended his
signature as a witness. On the portion of the contract meant for the
signature of the official signing
for and on behalf of the Department
the names in manuscript, L Moorosi appeared, ostensibly signing as
the HOD of the Department.
The date and place of signature were left
blank. Underneath the names L Moorosi, appeared the names SS
Dhlamini, which person purportedly
signed as a witness. Both L
Moorosi and SS Dhlamini are persons
unknown
to Mr
Mahlangu.
He
however
testified
that
he
recognised
the
name
SS
Dhlamini
from some other departmental documents he had seen
prior, whose designation in those documents was indicated as the
departmental
CFO.
[29]
He further established that the contract was for a
study to be conducted for the development of a concept document for
the project
as outlined in the commercial proposal of the contractor
and to identify a possible strategic partner for the project. The
term
of the aforesaid contract entered into between the department
and Nulane Investments was with effect from 01 November 2011 to the
28 February 2012, and the total amount payable being R24 948 240
(twenty four million nine hundred and forty eight thousand two
hundred and forty rand).
[30]
Furthermore that in terms of the aforesaid
contract, a mobilization payment of R12 492 120 (twelve million four
hundred and ninety
two thousand one hundred and twenty rand) which
represented 50 % of the agreed upon amount, was to be paid by the
department to
Nulane Investments Nedbank's account number [....] in
advance, against issuance of a purchase order, with the remainder to
be paid
in three equal monthly payments within 30 days of completion
of monthly purchase milestones and sign off by the project manager.
[31]
He further ascertained that in terms of the
aforementioned contract, Mr Thabethe was indicated as the
departmental official to whom
any correspondence and or notices from
the contractor to the department regarding this contract had to be
forwarded and that in
turn, same for Nulane Investments had to be
forwarded to Mr Dinesh Patel.
[32]
Subsequent to perusing all the documents he had at
his disposal, he ascertained from the National Treasury whether the
project was
registered as a PPP, upon not finding such registration
at National Treasury, he then enquired from and requested the
Department
to furnish him with proof, if any, that the project was
registered as a PPP with the Free State Provincial Treasury. In
response,
Dr Masiteng, informed that the Department was not in
possession of any PPP documents as the project was not a PPP. Dr
Masiteng
instead furnished him with certain documents relating to
this project which documents were in the custody of the Department
at that time.
[33]
In the course of his investigations, he could also
not find any evidence
suggesting that the
entities Nulane Investments or World Window lmpex made any financial
contribution towards the project as required
in a PPP project.
[34]
He further stablished that the Department had a
SCM policy which outlined, amongst others, the processes to be
followed as well
as regulated how and when deviations ought to occur.
With regards to the deviation process, he could recall three
instances in
which deviations were allowed in terms of the SCM
policy,
viz,
emergency,
impracticality and when items of historical or value are to be
procured.
[35]
He could also not find any evidence that the
Department had complied with Treasury Regulation 16A6.4 in that it
did not report the
deviation from the prescribed procurement
processes in respect of the project. He based this conclusion on the
following; prior
to May 2016, governments were required to report any
deviations, in terms of Treasury Regulation 16A6.4 for all
transactions in
excess of a million rand, to the Provincial Treasury
and the office of the Auditor General. This was the sum total of Mr
Mahlangu's
evidence.
CROSS
EXAMINATION
[36]
Save to quibble with Mr Mahlangu regarding,
amongst others, his credentials as an expert on matters relating to
SCM, the fact that
in the course of his investigations he did not
consult with and afford any of the accused an opportunity to be
heard, nothing much
turned on his cross examination
which
had the effect of vitiating his evidence, I shall
therefore not take this matter any further than I have.
EVALUATION:
[37]
It is clear from the aforesaid evidence that Mr
Mahlangu, firstly, testified ex post facto, his evidence is based on
copies of documents
he was favoured with. His evidence does not take
the State's case anywhere, save to only confirm that the amount of
R24 948 240
(twenty four million nine hundred and forty eight
thousand two hundred and forty rand) somehow
made its way out of the coffers of the Department
and into the banking account of Nulane Investments.
[38]
Secondly, on the disputed documents, his evidence
did not serve as authentication of same, he was neither the author
thereof nor
was he presented when same were either authored and or
signatures appended thereto. On this aspect too, his evidence does
not take
the state's case any further.
[39]
With regards to the procurement processes embarked
upon by the Department, his evidence only served to show what
should've been
and not what was. Differently put, his evidence was
largely to demonstrate which procurement processes were to be
followed when
different services were to be procured etc.
MR.
SHADRACK CEZULA
[40]
Prior to Mr Cezula's
evidence,
the State informed
the
court that he is implicated in the offence of fraud and will, during
the course of his testimony, tender evidence that may incriminate
him
in the commission of said offence. Having duly warned him in terms of
section 204 of the CPA, he indicated that he understood
the
explanation and furthermore informed the court that he also took it
upon himself to seek independent legal advice on the provisions
of
the aforesaid section. Having satisfied myself that he understood the
import of the section as well as the implications that
may obtain
pursuant to his testimony, and that he freely and voluntarily
presented himself to testify, he proceeded to tender his
evidence.
[41]
He testified that he is a Manager in the
Department of Agriculture for the District of
Lejweleputswa
and
holds
a
Master's
degree
in
Public
Management.
He
is
responsible for projects implementation. He has been in the employ of
the Department
since 2007. In 2009 he was
appointed
as the Manager for Assets and
Disposal which is a unit within the Department's SCM unit. During
April 2011 he was appointed in an
Acting capacity as the Senior
Manager for the broader SCM unit as evinced by a copy of his letter
of appointment dated and signed
on the 12 April 2011 by the then MEC
for Agriculture and Rural Development, which was provisionally
admitted
into the
record. On the 13
th
April
2011
he accepted the acting appointment as
evinced by his letter of acceptance provisionally admitted into the
record.
[42]
Subsequent to his acceptance of the acting
appointment, Ms Dhlamini
,
the
then CFO and his supervisor and also Accused 3 in these proceedings,
on the 6 June 2011 addressed a letter to one Mr. M Ndumo
confirming
therein that Mr Cezula had acted for an uninterrupted period of 6
weeks as Manager: SCM.
[43]
He testified that due to the lapse of time, he did
not know the whereabouts of the originals of these documents. At the
end of the
State's case and upon a request from defence counsel, I
ruled these letters finally admitted into the record, as Mr Cezula
had
in the course
of his evidence
authenticated
same and
in any event no serious issue was taken therewith by the defence.
[44]
He further testified that during midday on the 6
October 2011 Accused 3 visited him in his office and with a sense of
urgency instructed
him to compile a
deviation
submission in order to appoint Nulane Investments as a service
provider for the Mohoma Mobung Project. No supporting documents
were
initially furnished to him, instead Accused 3 stood in his office and
dictated the contents of the submission
to
him, whilst he typed. He testified that this left him with a great
sense of trepidation as he felt that something was greatly
amiss due
to the haste with which the submission had to be compiled. He did as
instructed albeit he
was
anxious.
This
he
testified
was
an
error
of
judgment
on
his
part
as
he
could
have
indicated
to
the
CFO
that
what
she
wanted
done
amounted
to
an
irregularity.
[45]
At some point, whilst typing he indicated to
Accused 3 the difficulty of compiling a deviation submission without
any supporting
documentation. She then exited his office and
momentarily returned with the World Window lmpex Pvt. Ltd letter. He
testified that
accused 2 informed him that she was given this letter
by Accused 1. This letter, dated 3 October 2011, purported to be from
a company
called World Window lmpex Pvt. Ltd, being importers of
ferrous and non-ferrous metal scrap. As per the letter this entity
was based
in New Delhi, India and was addressed to the Free State
Department of Agriculture and Rural Development. He included this
letter,
as furnished, in the submission as supporting documentation
for the deviation.
[46]
For purposes of this judgment I deem it apposite
to refer to the letter in full, and it reads thus;
Subject:
Letter of intent to participate as a Strategic Partner in Project
Mohoma Mobung
Gentlemen;
Department
for this pioneering project, which we feel will be a flagship project
for the whole country and will go a long way in
alleviating the
poverty situation by creating a sustainable agro-business model that
will help the small-holder farmers gain financial
independence and
become positive contributors to the economy of South Africa.
We
wish to introduce ourselves as Worlds Window Group, which is a
diversified business conglomerate with global presence. The group
is
into the business of manufacturing, logistics, infrastructure, mining
and metal scrap trading. South Africa is a territory known
to us
since the last 15 years. We, until mid of last year,
were
operating outside of South Africa as metal scrap traders. The
presence, however, has further intensified with recent acquisition
of
some coal mines in South Africa. Going forward, we have plans of
major investments in the territory by replicating our Indian
business
model here. Our presence extends to the most developed economies of
the world
viz.
UK
and USA, as well as to the most dynamic countries
viz.
the Africa nations. The reach is
further pervading into the Caribbean, Far East Nations, UAE and the
entire Indian Sub-Continent.
In all, the Group has its own offices in
over 25 countries of the World. The Group is into logistics and
infrastructure segment
where we are running a fleet of around 400
trailers and several dry ports in India. Our freight forwarding
offices are extant in
India, London, Manchester, New Jersey, Los
Angeles, Durban, Dubai and Singapore. Several more are under final
stage of establishment
in Kenya, Germany and several other European
destinations.
We
are equally passionate about initiating social change and empowering
the weaker sections of society through similar projects
as initiated
by your Department.
Please
therefore consider this as a letter of intent from ourselves to
participate in a strategic partnership with the Free State
Department
of Agriculture and Rural Development under the Private-Public
Partnership (PPP) framework of South Africa to initiate
this project
by a funding mechanism that will be mutually aggregable to all
parties and in conformance with the requirements of
the National and
Provincial Treasury Departments of South Africa.
We
agree in principle to participate on an equal (50/50) partnership
basis to fund this project, which we understand has been initially
projected at R1 billion. This, however, would be subject to a proper
due diligence process conducted by a reputable Agency covering
the
commercial aspects of the project with detailed business plans which
we would request the Department to conduct in order for
us to take an
informed decision in the matter.
We
would request that the above due diligence and planning exercise be
conducted by an Agency of our choice to provide the necessary
comfort
to our
stakeholders.
In the event that you are in agreement with our proposal, we would
request you to revert to us in the affirmative
and we will
immediately advise you of the details of the proposed Planning Agent.
We
would consider it an honor to become part of this prestigious Project
and hope that we can form a strong strategic partnership
that will
enable us to jointly embark on this ambitious project that will
transform the rural landscape of South Africa.
Thanking
you, Yours faithfully,
For
World Window lmpex Pvt. Ltd Anil Misra
Director
[47]
The submission he compiled as dictated to by
Accused 3, reads as follows;
To
the HOD
DATE:
06 October 2011
REQUEST
TO DEVIATE FROM NORMAL TENDER PROCEDURES TO APPOINT NULANE
INVESTMENTS 204 t/a NULANE MANAGEMENT SERVICES
1.
Purpose
To
request approval for deviation in terms of the departmental SCM
policy and regulations for the appointment of NULANE INVESTMENTS
203
(PTY) LTD t/a Nulane Management Services to perform due diligence and
feasibility study for Mohoma Mobung Project.
2.
DISCUSSION:
The
unaccepted low results that were obtained with development attempts
especially also with land reform and agricultural development
were
also experienced in certain parts South Africa, and in spite of the
intensive attention that was given to development
aspects
over the past decade, mainly on political and academic fields, one
still finds a great degree of disillusionment and even
pessimism
concerning development in Africa and South Africa in particular. The
poverty problem has increased, which indicated that
development
strategies did not really show any meaningful results. Within the
land reform programme, which is one of the most strategic
and
political important development
and
affirmative attempts
,
a
success rate of less than 50 percent was obtained so far
.
The
poverty and development problems in the third world countries gave
rise to the stimulating of thoughts about the concept of
development
and a change in development strategies. It was accepted that the
development models which was inspirited due to the
growth and
modernization of first world countries, was not applicable for the
circumstances in under-developed countries. The conventional
development approach was criticized and questioned.
On
the other hand, the agricultural sector, which is the most natural
resource of the majority of the provinces, are however far
under-utilized, and only contributes a small portion to further
economic development.
The
department and the province recognised the need for an appropriate
development and land reform approach, and recommended that:
•
extension,
support and advisory services should be upgraded and trained to be
more holistic oriented, and
•
more
holistic
development
approach
should
be
followed
when
planning for agricultural and land reform projects
.
The
above discussions resulted in the decision by the department to come
up with a more integrated approach that will address the
issues and
concerns as raised and further address the zero hunger strategy;
hence MOHOMA MOBUNG PROJECT
.
3.
MOTIVATION
The
SCM regulations and policy of the department allow the accounting
officer to dispense with the official procurement process
established
and procure any required
goods
and
services
through
any
convenient
process,
which
may
include
direct negotiations, but only in the following
cases;
•
Emergency
or exceptional cases;
•
If
such goods or services are produced or available from a single
provider only;
•
For
the
acquisition
of
the
special
works
of
art
or
historical
objects
where
specifications are difficult to compile;
•
In any
other exceptional cases where it is impractical
or
impossible to follow the normal procurement processes.
The
appointment of Nulane Management Services makes it impossible for the
department to follow the normal procurement processes
due to the fact
that it is a condition from the intended Strategic Partner (World
Window lmpex India Pvt. Ltd) that for them to
be able to have comfort
and confidence in the due diligence and feasibility study, they
require us to use the services of Nulane
Management Services as they
know the quality of work they performed in similar projects around
the world.
Refer to the attached letter.
4.
FINANCIAL IMPLICATIONS
The
budget required for these services will require an estimated amount
of R 25 million.
5.
POWER OF APPROVAL
The
power of approval is vested in the Head of Department as the
accounting officer for the Department. The SCM regulations and
policy
of the department allow the accounting officer to dispense with the
official procurement processes established and procure
any required
goods and services through any convenient process, which may include
direct negotiations, but only in the following
cases;
•
Emergency
or exceptional cases;
•
If
such goods or services are produced or available from a single
provider only;
•
For
the
acquisition
of
the
special
works
of
art
or
historical
objects
where
specifications are difficult to compile;
•
In any
other exceptional cases where it is impractical or impossible to
follow the normal procurement processes.
6.
RECOMMENDATIONS
It
is recommended that:
•
Approval
be granted for deviation in terms of the departmental SCM policy and
regulations for the appointment of NULANE INVESTMENTS
204 PTY. LTD
t/a Nulane Management Services.
[48]
Subsequent to finalizing the submission he emailed
the draft submission to both Accused 1 and 3 as the originators of
the instruction
for deviation, for their comfort and or inputs. He
however did not attach the World Wide lmpex letter to the email sent.
A while
later, the submission was transmitted back to him via email.
[49]
Upon receiving the document back from Accused 3
with some changes made to it, he signed and recommended
that
the deviation be approved. Accused 3 in his presence and whilst both
were in his office, also signed and recommended approval.
He then
informed Accused 3 that the submission required the signatures of
Accused 1 and 2, to which she informed him that Accused
1 had
allegedly given the go-ahead for payments to be processed and that he
would reportedly sign the submission on the following
day. He
testified that he personally did not speak to Accused 1 regarding the
deviation submission. At the time he recommended
that Nulane
Investments be appointed as a service provider, he did not know if
any contract between the latter and the Department
had been
concluded, in fact, his evidence
is that,
as at the time of his evidence, he still did not know.
[50]
After he and Accused 3 appended their signatures
thereon, the submission was forwarded to the office of the HOD for
approval. Subsequent
to signing the submission,
he
and Accused
3 took same to the finance
section for the payment to be processed. As no financial details of
Nulane Investments were furnished
to him, none were captured in the
submission. At Finance however, Accused 3 handed to the processing
official a piece of paper
on which the banking details of Nulane
Investments were written on. This is how the initial payment of R12
000 000 (twelve million
rand) came to be processed, he however had no
knowledge with regards to when actual payment was effect to Nulane
Investments.
[51]
As per the submission, it appears that both
Accused 1 and 2 appended their signatures thereon on the 7th
October 20211, respectively, recommending and
approving the deviation. He was however not present when Accused 1
and 2 appended
their signatures thereon and could therefore not vouch
for the authenticity of said signatures.
[52]
He testified that During May 2012 he was
eventually moved from the SCM section to the Monitoring and
Evaluation section.
CROSS
EXAMINATION
[53]
As to be expected Mr Cezula was subjected to
lengthy and spirited cross examination which centered mainly on his
status as a section
204 witness. It was among others, put to him that
he had an incentive for implicating the accused in the manner that he
did in
his evidence in chief. What is noteworthy
of
his evidence in chief as well as during cross examination is that,
not once, did Mr Cezula implicate himself in the commission
of the
offence of fraud. Tried as he did, not even Mr Serunye could get Mr
Cezula to admit to committing an offence, let alone
fraud. Instead he
testified that he committed an error of judgment. At best what he
admitted to was contravening the Public Finance
Management Act, in
his words, he says;
"One,
you do not have
a
tax
clearance for
a
company.
When you do not have banking details for the company it means there
is
something
wrong and
you
need
to
take
time.
The
part
of
it
is
to
make
sure
that
you
have compared the market as to whether, is it
true that this company was
a
sole
provider of this service".
[54]
He further goes on and has the following to say;
"So
I have erred or contravened that act by allowing myself to go the
route of doing this that I had to be under pressure to
do"
.
EVALUATION:
[55]
I found Mr Cezula to be an evasive witness
especially on the very reason he found himself in court. He was
hell-bent
on distancing himself from
committing the offence of fraud. This I find rather disquieting.
Prior to testifying in court,
on
his own version, he was fully appraised of the provisions of section
204, firstly by Capt. Mtolo and secondly through the independent
legal advice he sought. Throughout his time in this court, I found
him to be an intelligent and well-spoken witness, and who more
often
than not, gave calculated responses to questions in cross
examination. Throughout his evidence he sought to downplay his
role,
to at best an employee who had no choice but to comply with an
instruction from a superior and at worst misconduct in not
complying
with the PFMA. I cannot conclude that he misunderstood his presence
and role in these proceedings, if anything his prevarication
must
point to his mendacity as a witness.
[56]
During arguments the State submitted that it was
not necessary for Mr Cezula to state in his evidence that his conduct
amounted
to fraud and was thus unlawful. They correctly submitted
that the court as the trier of fact must determine the facts, apply
the
law thereto and make the necessary finding. To avail himself of
the indemnity however, he should have either testified that he had
the intention to defraud the Department and acted in accordance
therewith. In the absence of an express admission of committing
fraud, he should at the very least have given factual evidence
fulfilling the essential elements of fraud from which this court
could then infer the commission of the offence of fraud. He did not
do that.
[57]
The facts in this case are that Mr Cezula
testified that he categorically did not commit fraud. In fact he
testified that he compiled
the submission
because
he was acting on an instruction from accused 3 and that he made an
error of judgment by not speaking up that it was wrong
to compile a
submission without supporting documentation. By his own admission he
lacked the requisite
mens
rea
to commit fraud.
[58]
Furthermore
it is quite
illuminating
that there is no corroboration
for the version as advanced
by
Mr Cezula.
This court
only
has his mere say-so
that the deviation
submission was compiled under the circumstances he says it was. It is
further illuminating that he could not
recall a single person to whom
he handed the deviation submission to for signature, or who the
official was he dealt with at Finance.
Perhaps
more illuminating
is the fact that having
realised that something was "abnormal" he kept a copy of
the original submission, but did not
make a copy or print out of the
emails with the now altered submission.
[59]
In
S v Gentle
2005
(1) SACR 420
(SCA)
the court held that
"It must be emphasised immediately that by corroboration is
meant other evidence which supports the evidence
of the complainant,
and which renders the evidence of the accused less probable,
on
the issues in dispute".
I must
hasten to add that Mr Edeling
in cross
examination,
did not place in issue the
signature of accused
3 on the deviation
submission, taking issue only with the why and wherefores thereof.
When regard is had to Gentle
supra,
that
aspect cannot lend corroboration to the version of Mr Cezula as it is
an aspect not in dispute.
[60]
The facts as placed before me and indeed the
evidence of Mr Cezula do not evince that there was any prior
agreement between him
and any of the accused and or a decision to act
in concert with any of the accused to defraud the Department,
in any event none was alleged
in
the indictment,
and even it were so
alleged, Mr Cezula testified that, save for accused 1-3, he did not
know the other accused at all.
[61]
The state alleged that the accused acted in
concert by misrepresenting to the Department of Agriculture and Rural
Development, that
the World Window lmpex letter was received in the
ordinary course of business. On their own version, this cannot stand.
Not only
did they not present evidence to prove the collusion, save
for introducing the letter into evidence, the state did not take the
trouble to investigate the origins of same. This could've been easily
ascertained.
[62]
Taking into account that a little more than R24
million (twenty four million rand) of tax payers money was at stake,
the lackadaisical
manner in which this
matter was investigated is truly to be lamented. To find that common
purpose under these circumstances existed
would be a quantum leap.
[63]
What perhaps stands to be lamented even more is
that the very witness the state depended on to prove counts 1 and 2
came to the
stand and lied. I say this emboldened by the following;
during cross examination Mr Cezula alluded that because of his
uneasiness
with how things unfolded, he
kept in a folder a copy of the deviation submission he authored as
well as copies of his acting appointment
letters. These he took with
him when he was eventually transferred to his current post in
Lejweleputswa. What I find improbable
is
why he would not keep copies of the allegedly altered submission. Why
would he not print out the email communication between
him and
accused 2 and 3 in this regard?
[64]
On the question of whether I should grant Mr.
Cezula indemnity from prosecution I hold the view that his evidence
and his mendacity
speak for itself, to justify a refusal to grant him
indemnity. He is therefore not granted indemnity
.
MR.
AVELAMADODA
STOFILE
[65]
Mr Stofile is a former employee of the FS
department of Agriculture whereat he plied his trade as a Director:
SCM, having joined
the Department in August 2017. He is currently
employed at the Local Government SETA. During 2021, whilst he was
still in the employ
of the Department, he was requested by the HOD,
Dr Masiteng,
to
assist
in
retrieving
the
documents
required
by
the
police.
The documents required were procurement documents
related to Nulane
Investments. Upon
searching for the said documents, he could not locate them at the SCM
unit.
[66]
Upon a further search he located two copies of the
same contract entered into between the Department
and
Nulane Investments
as well as a copy of the
Nulane report. These documents were located in the HOD's office.
[67]
At Finance he located copies of the following; the
deviation submission, registration documents relating to Nulane
Investments,
a document titled Amended Commercial Proposal Summary:
Mohoma Mobung, of two invoices from Nulane Investments.
[68]
At finance he retrieved an invoice for an amount
of R 4164 040.00 (four million one hundred and sixty thousand and
forty rand).
Both these invoices were from Nulane Investments to the
Department. From the departmental computer system the following
payment
stubs were retrieved indicating payments to the Nulane
Investments Nedbank account; R12 492 132.00 (twelve million four
hundred
and ninety two thousand) R4 000 000 (four million rand).
[69]
With regards the payment stubs and printouts, in
so far as they were computer generated documents I admitted same into
the record
[70]
He also handed to the police a document he found
with Dr Masiteng bearing the names of the entities Deloitte and
Nulane date 12
March 2012 and titled Final Report for due diligence
on selected projects identified by the Free State Department of
Agriculture
and Rural Development.
[71]
He testified that he bore no knowledge of the
whereabouts of the originals of these documents and surmised that
they may have been
lost when the Department moved to their Glen
offices.
CROSS
EXAMINATION:
[72]
Mr Stofile's evidence centered mainly on how and
where he acquired the documents requested by the police. He was
neither the author
nor the custodian thereof. He also could not
assist the court with regards the whereabouts of the original
documents. As his evidence
did not take the state's case any further
on the issues in dispute I shall not take it any further than I have.
MR.
SEKOTOANE
MOALOSI
[73]
Mr Moalosi testified briefly that he is the Deputy
Director: Financial Accounting. He testified broadly about the
processes that
need to be followed in order to effect payment to a
service provider. He testified amongst others that he had no
knowledge of the
originals of these disputed documents, as the
departmental documents were placed in boxes during the move to the
Glen offices.
He also could not explain by whom and when the
alterations
on the amount to be paid was
made or the inscription "irregular" on the transaction
logsheet.
MS.
SETOANE MERRIAM MOTSHUMI
[74]
Ms Motshumi is an employee of the Department of
Agriculture since her permanent appointment in June 2011. She is
employed at the
Finance section of the department. During the
financial year 2011-2012 her duties entailed capturing payments to be
made on BAS.
Her testimony can briefly be summarised as follows; on
the 12 March 20212 she was furnished with a sundry payment and an
invoice
which she captured on BAS. She further testified that after
authorization, the documents were brought back to her and she then
compiled the transaction logsheet and forwarded same together with
the documents for filing.
[75]
During cross examination Ms Motshumi conceded that
at the time she populated and signed the transaction logsheet the
words "irregular"
did not appear on the original document
she dealt with.
[76]
Ms Motshumi's evidence too did not take the
state's case any further on the issues in dispute.
MR.
KENOSI THUBISI
[77]
Mr Thubisi in an employee of the Department of
Agriculture and Rural Development and has been in its employ since
his appointment
in 2012. He is employed there as an Administrative
Clerk at the SCM unit. He recalls that on the 27 March 2012 he was
requested
by Mr Mofokeng to complete Sundry payment Advice for Nulane
Investments in the amount of RS 000 000. 00 (five million
rand). After completing same, he signed it and
took same to Mr Mofokeng who also signed and requested him to take
same to the CFO's
office, which he did, and this he testified, is the
last he had sight of these documents. He was not present when the
documents
were signed by whoever appended their signature thereon
after he did. He could not assist the court with regards to, by whom
and
when, the amount of RS million was altered to R4 million.
[78]
Mr Thubisi was subjected to lengthy and difficult
cross examination which reduced him to tears. Contrary to the
suggestions made
during cross
examination
that Mr Thubisi was an unreliable witness, hence the tears, having
had the opportunity to observe him, I am of the view
that he was
simply overwhelmed by the forum he found himself in. I am satisfied
that the tears notwithstanding, he was an honest
witness.
In
any event he too could not take the state's case any further on the
disputed issues. He too did not know what happened to the
original
documents he dealt with, he did not know by whom and when the
alteration
in the amount to be paid was
made on the copy.
MR.
JOSEPH MOLOI
[79]
Mr Moloi is a Senior State Accountant
in
the employ of the Free State Department of Agriculture and Rural
Development. His total tenure in the Department
is
36 years. He gave a broad overview of the workings
of
the unit with regards to how and when payments are processed.
His evidence did not take the state's case any
further.
MR.
MAHLOMOLA PETRUS MOFOKENG:
[80]
Mr Mofokeng is a retired employee of the
Department. He testified that during March 2012 he received documents
for payment of R5
million rand to Nulane Investments. He gave same to
Mr Thubisi and instructed him to compile a sundry payment advice and
then to
take same to accused 2 for her signature.
MR.
GODFREY MAHLATSI
[81]
Mr Mahlatsi was during the period between 2014 and
2021 employed
as the HOD of the FS
Provincial Treasury. He was requested to confirm whether the FS
Department of Agriculture registered a PPP
project in respect of the
Vrede Diary Project as well as to confirm whether there was a budget
for said project. As the said transaction
took place prior to joining
the Provincial Treasury, he had to consult various sources to get the
information requested. He ascertained
that the project was not
registered with the Provincial Treasury as a PPP. He testified that
albeit that the project was not registered
with the Provincial
Treasury, the Department could on its own conduct a feasibility
study, and if this course was chosen, they
did not require Provincial
Treasury approval, provided that upon finalization of the study and
the report being furnished, the
Department had to submit same to
National Treasury. He was able to ascertain that no such feasibility
study was registered with
National Treasury.
[82]
Mr Mahlatsi could not assist this court with
regards to whether the project was budgeted for or not. He testified
that his scope
was limited to ascertaining whether the project was
registered as PPP with Provincial Treasury or not and whether funds
were available.
He testified that at the beginning of the financial
year he ascertained that funds were not available but that during the
budget
adjustment an amount of R34 million was appropriated for the
project.
MR.
TAKISI MASITENG
[83]
Dr Masiteng is the current HOD of the Department.
He confirmed Mr Mahlangu's evidence in so far as it related to the
latter's request
to him for documents.
He
was furthermore approached by the police in terms of a section 28
warrant to furnish certain documents. He furnished the police
with
copies of the following documents;
•
Transfer
function in respect of the Department of Rural Development as signed
by Mr Magashule
•
Acting
appointment of Dr Moorosi signed by MEG Thlabathi
•
Acting
appointment of Mr Cezula signed by MEG Zwane
•
Mr
Cezula's acceptance letter
•
Confirmation
of acting appointment signed by accused 3
•
Mr
Cezula's
acceptance
letter
of
the appointment
as
Manager:
Logistics
and Disposals
•
Organisational
structure
•
Mr
Cezula's appointment as a manager signed by Dr DB Malakoane
[84]
Dr Masiteng could not account for the originals of
all these documents. He ascribed this to what he called confusion
that was caused
by the Department moving offices from town to Glen
College of Agriculture. He testified that this confusion resulted
because the
Dept. engaged the services of a service provider who was
responsible for the packaging, transportation and off-loading of the
boxes.
[85]
Dr Masiteng was called by the State ostensibly to authenticate the
disputed documents, sadly this fell flat.
Firstly it became apparent
during cross examination that he himself was not the custodian of the
documents seized. The copies were
found in different offices. He was
not present when Stofile collected some of the documents. He could
also not assist the court
with regards to which procurement strategy
was applicable during 2011, having located only the 2004 and 2012 SCM
policies.
MR.
OMRI VANZYL
[86]
Mr Van Zyl is a former employee of Deloitte. He testified that whilst
employed by Deloitte, the latter entered
into a sub-contracting
agreement with Nulane Investments to conduct a feasibility study for
the benefit of the Department. After
performing in terms of the
contract and submitting a report, Deloitte was paid an amount of R1
.5
million rand by Nulane Investments. He
testified that throughout his dealings with Nulane Investments, Mr
Dinesh Patel was his contact.
He was introduced to him by a Ms
Rapetti. He met Mr Patel once or twice in person and the bulk of
their engagements were per email.
He specifically recalled one in
person meeting at Tasha's attended by himself, Mr Botha, Mr Church
and Mr Patel. He specifically
remembered this meeting as they enjoyed
the now
infamous Dr Paw-Paw meal.
[87]
Mr Van Zyl was called to authenticate the copy of the report produced
by Deloitte. He could not produce the
original as he testified that
the original was probably destroyed due to Deloitte's 7 years
retention policy. With regards to the
report he testified that the
copy that served before the court was not the report that the
Deloitte team produced as it was altered
and showed numerous track
changes. In this regard the take-home point is that Van Zyl did not
know who made the changes on the
report or to whom at Nulane
Investments the report was ultimately sent to.
[88]
The less said about
Mr Van Zyl's bona fides
and credibility
the better,
suffice
to say that during cross examination the wheels came off.
MR.
WBOTHA
[89]
Mr Botha was also an employee of Deloitte. Whist at Deloitte he
worked on the Nulane project and he was a project manager.
He
testified that whilst working on the project, his point's person at
Nulane was a Mr Dinesh Patel. He communicated mostly via
email with
the said Mr Patel and only met him at the same Tasha's. I do not
attach any value to this identification, regard being
had to Mr Van
Zyl's evidence and the now known suggestions to and interference with
this witness. Mr Botha also alluded to some
changes being made on
their report but he too could not assist the court with regards to by
whom and when said changes were made.
MR.
CHARLES CHURCH
[90]
Mr Church testified that during 2010-2012 he worked as a consultant
for Deloitte. He and Mr Botha were co-project
managers on the Nulane
project. He testified that he knew Mr Sharma and was introduced to
him by Mr Van Zyl during a brief meeting
regarding the Nulane
project. He also knew Mr Dinesh and was also introduced to him by Mr
Van Zyl.
[91]
The take home points from his evidence is that Deloitte and not
Nulane Investments conducted the feasibility
study and produced a
report on their findings. He testified that the report they compiled
was handed to Mr Van Zyl.
The prickly point
though is, where is that report, because he categorically
testified that the report that served before the
court purporting to be the final report is not what he and his team
produced and
handed to Mr Van Zyl, as evinced by the many changes
thereon. He furthermore could not assist the court
with
regards
to, by and
to
whom,
how and when
the
report was
sent to Nulane Investments and
the Department.
MR.
ROBERT BOLZ
[92]
Mr Bolz is employed by Deloitte as an Internal
Legal Advisor and is an admitted attorney. He has been in the employ
of Deloitte
since 2012. Pursuant to Deloitte being served with a
summons in terms of section 28 of the NPA Act 32 of 1998, dated
12/11/2020
to furnish certain information relating to the Nulane
project, specifically, signed contracts, email communication,
invoices and
other ancillary documentation relating to the project
for the period between 2011-2012, he requested the individuals who
were involved
with the project as well as the Deloitte's risk team to
provide him with same. He was subsequently furnished with limited
information
and or documentation as most of the required information
was no longer available due to Deloitte's 7 year retention policy.
The
team were only able to locate some email communication and
invoices between Deloitte and Nulane.
[93]
It emerged during cross examination that the risk
team consulted comprised of Messrs. Kobus Swart and Eugene Lategan.
Save for the
retrieved documents being handed to him, Mr Bolz had no
knowledge of their origins or by whom they were compiled. Furthermore
that
the search for the retrieved documents was done by Mr Lategan
who retrieved the emails and the contract, the Deloitte Tech
retrieved
the invoices. It further emerged that during the course of
collating the information,
he consulted
with Mr Van Zyl, who initially was reluctant to provide an affidavit
as he reportedly had no recollection
of the
said transaction.
He further testified that
he knew of Ms Rapetti, albeit not personally, and that as far as he
knew she was not asked about any knowledge
she might have had
regarding the project. He was also quizzed on whether a search for
the email address
[….]
was
conducted to which he testified he had no knowledge of said email
address.
MRS.
LINDA CHANNING
[94]
Mrs. Channing is a retired ABSA employee. At the
time of her employment with ABSA bank, she plied her trade as a
Manager
for Digital Channels responsible
for operational processes and procedures in relation to the
onboarding of clients onto the CashFocus
/Business Integrator client
self-servicing system platforms. Prior to her retirement, she had
been in the employ of the bank for
41 years. She deposed to an
affidavit in terms of section 236 of the CPA.
[95]
Briefly, she testified that ABSA bank has a
facility known as ABSA Business Integrator Online Channel. This
facility enables clients,
upon application and approval by the bank,
to link any account, to the client's existing ABSA bank account. Once
the accounts are
linked, the client will notify and furnish the bank
with details of the persons authorized to approve transactions
between the
linked accounts. A system manager, the so-called super
-user, will also be created and will effectively take control of the
client
profile. Once the process of creating the super-user is
completed, the bank no longer had any control of the profile.
[96]
The system manager is able create users from his
environment to work on the system. What these people would be able to
do on the
system would be
whatever the
super -user granted them access to
.
[97]
She testified that Sahara Computers (Pty) Ltd has
such a cash focus facility, with Mr Atul Gupta as the system manager,
Ms Ugeshni
Govender, Mr Evan Tak and Mr Sanjay Das as the operators.
This cash focus facility consisted of approximately 32 accounts of
various
companies and private individuals. She testified that the
purpose of the link was to enable Sahara Computers to obtain full
access
to the linked accounts and to receive and disburse funds
without limitation between the accounts. The number and detail of
these
accounts within the cash focus facility are not in dispute.
[98]
The following emerged during cross examination; the fact that one was
a system manager of the facility, in
this instance Mr Atul Gupta, did
not necessarily mean that he was responsible for the transactions
conducted therein. Differently
put, it did not mean that a system
manager would necessarily have authorized each transaction or had
anything to do therewith.
In fact the evidence is that Mr Gupta
delegated authorization to effect transactions within the cash focus
facility to certain
identified operators.
[99]
Mrs. Channing testified that she was not requested by the state to
check who of the operators and or the
system manager was responsible
for the transactions in question. In fact she conceded that that
information was readily available
and would have been furnished had
it been requested by the state.
MR.
NORMAL PERCIVAL SMIT:
[100]
Mr. Smit is specialist data analyst employed in the Financial Crime
Compliance department of ABSA bank. He has been
with ABSA for some 40
years. Pursuant to being approached by the police, he compiled an
affidavit in terms of section 236 of the
CPA the subject matter of
which related to the ABSA account held by Pragat Investments (Pty)
Ltd with account number 4[....]9.
Annexed to his aforesaid affidavit
are Annexures A and B which are respectively the financial
transactional information for the
period 01 July 2008 to 16 February
2016 and bank statements for the same period. The aforementioned
period, he testified, represented
the inception and date of closure
of the account. He testified that aforesaid documents are or have
been in the ordinary records
of the band and the entries therein have
been made in the ordinary course of business of the bank and are in
the custody or under
the control of the bank.
[101]
The main thrust of his evidence was to show the
movement of money from Nulane Investments, Pragat Investments, Bank
of Baroda and
lslandsite Investments.
[102]
The cross examination of Mr Smit elicited nothing
to discredit his evidence, save only to point out that the records as
presented
to court were incomplete, with entries in June 2009 and May
2010 amongst others not accounted for.
MR.
THISELE RANKOUATSANA
[103]
Mr Rankuoatsana is a senior financial investigator
employed by the National Prosecuting Authority. He was tasked with
reporting
on the flow of funds from whence it was paid by the
Department of Agriculture to Nulane Investments. He also
assisted
Capt.
Bunu
of
the
DPCI
to
type
the
witness
statements
that
the latter obtained from witnesses at Glen College
of agriculture.
[104]
Col Mtolo, also of the DPCI, furnished him with
bank statements obtained from various banking institutions. Said bank
statements
related to the following
entities;
Nulane Investments, Burnelia, Pragat Investments, lslandsite
Investments and Bank of Baroda, He analysed the said statements,
the
process he embarked upon entailed the identification, comparison of a
link and timeline chart of deposits, withdrawals and
transfers from
the relevant accounts. The period of review was August 2011 to
October 2012. His investigation revealed, amongst
others, that the
funds moved with alarming speed in between the accounts and appeared
to not be in the ordinary course of business.
[105]
During cross examination Mr Rankuoatsana conceded
that his period of review was narrow and this led him to not take
into account
other funds which flowed from Pragat Investments to
Nulane Investments. It was put to him that there was nothing sinister
about
the movement of money in between these companies as these were
loans
intra
the
companies
and that lslandsite
was
merely performing a treasury function. He conceded that indeed there
was a regular flow of money by way of loans and nothing
sinister and
that the books were meticulously kept and in order and no funds were
concealed.
MR.
NTOKOZO ZAMA
[106]
Mr Zama is a chartered accountant who was attached
to the Zonda Commission of Inquiry into State Capture, commonly known
as the
State Capture
Commission, as a
financial investigator and is currently contracted to the
Investigative Directorate. He too analysed bank statements,
annual
financial statements and ledgers of Pragat Investments and lslandsite
Investments for the period February 2009 until February
2013.
[107]
His analysis revealed that the flow of funds
occurred with alarming and rapid speed. He also could not discern
from any of the statement
any business related expenses e.g. rental
and or salaries. His conclusion with regards to the loan agreements
attached to Accused
B's
affidavit were that they were concluded after the
fact, i.e. after the auditors requested same.
[108]
During cross examination Mr Zama was painstakingly
taken through each and every transaction as reflected on the entities
bank statements,
ledgers and loan accounts. Pursuant to this
exercise, he conceded that he made a fundamental error and started
with the wrong opening
balance. He readily conceded that this led to
him making the erroneous finding in his report. He further conceded
that had he used
the correct opening balance, his findings would have
been different and indeed would've evinced nothing sinister in the
manner
in which the books of lslandsite were kept. He further
conceded that the movement of money within the Cash Flow group of
accounts
did not evince suspicious transactions, they merely
represented movement of funds within the entities because of the
treasury function
performed by lslandsite Investments.
MR.
IM BUNU
[109]
Mr
Bunu
is
a retired
police
officer
who
together
with
Col
Mtolo
attended
to the Glen
College
of
Agriculture
in
order
to
effect
a
search
and
seizure
at
the
Department. The said warrant was addressed to Dr Masiteng the
departmental HOD. As per the warrant, they were looking for tax
invoices and quotations. The high water mark of his evidence is that
Dr Masiteng requested a clerk to look for the documents as
listed in
the warrant. Said clerk left and went to another office and moments
later, came back with certain documents.
He
was not present when the clerk was looking for and retrieved the
documents. He therefore could not assist the court with regards
to
where and how these were retrieved.
[110]
What followed is a comedy of errors; to say that the manner in which
he and Mtolo dealt with the disputed evidence is
to be lamented will
be the understatement of the millennia. One would expect that senior
police officials such as he and Mtolo
would know how to handle
evidence especially disputed evidence.
MR
MANDLA MTOLO
[111]
Mr Mtolo is a Col. at the DPCI and holds an LLB
and BA degree in forensic science. He testified that he and Capt Bunu
attended at
the Glen College offices of the Department
of
Agriculture for purposes of conducting a search and seizure. Upon
arriving and attending to the office of Dr Masiteng, they introduced
themselves and explained the purpose of their visit. He testified
that as he had another engagement, he left Capt Bunu there.
[112]
The high water mark to his cross examination is
that the defence successfully elicited from him that the disputed
documents from
the moment they were seized at Glen to where they were
eventually stored were mishandled with no correct chain of custody
being
complied with. He furthermore conceded that upon receiving the
documents he did not consult any of the accused if only to get their
inputs regarding said documents. With regards to the World Window
letter he conceded that he did not even attempt to establish
the
origins and or authenticity of
said
documents.
So too
was
the positions
with
regards
to the other
disputed
documents, he did not even attempt to have them authenticated
by their forensic crime laboratory.
[113]
At the risk of repetition, to say that the manner
in which this investigation was conducted is a comedy of errors would
be the understatement
of the millennia. Mtolo is not only an
experienced investigator, in fact, he is a specialist investigator,
and he holds degrees in law and forensic science.
One would expect
that
senior police officials such as he and Bunu would know how to
handle evidence especially disputed evidence.
CONCLUSION
[114]
The state with regards to accused 1 in argument
conceded that they did not pass muster of the threshold referred to
elsewhere in
this judgment, it follows therefore that in respect of
count 1 he is entitled to his discharge.
[115]
With regards to count 2, as per their indictment,
what the state had to prove was misrepresentation on the part of the
accused as
well as that they acted in
concert.
Count 2 primarily was premised on the evidence of Mr Cezula, the
deviation submission he compiled, as well the World Window
letter. In
a previous ruling, I ruled the letter and other documents
inadmissible as they remained copies even after the state
closed
its case. The state contrary
to
the application to have the documents
provisionally
admitted into the record, did not lead a single
witness and or evidence who successfully authenticated the disputed
documents. What
this court instead heard was the ineptitude of the
investigators and indeed the lackadaisical manner in which evidence
and disputed
documents was handled and a government department who
seemingly evinced a willful disregard to the manner in which official
documents
were to be kept and archived.
Just on these aspects
only,
the state's
case as presented
was
still born.
[116]
However even if it could somehow be successfully
argued that I misdirected myself on the admissibility of the disputed
documents,
the fact still remains, if admitted, what was the court
expected to do with same, in the face of the evidence it was
presented
with. The answer is zilch. With the findings I made in
respect of Mr Cezula, what weight, if any, could I attach thereto?
Secondly
the fact that Accused 3 appended her signature on the
submission is still not corroboration for the veracity of Mr Cezula's
evidence.
If regard is had to the Gentle decision
supra,
corroboration is other evidence which
supports the evidence of the complainant, and which,
on
the issues in dispute,
renders the
evidence of the accused less probable. Accused 3 does not dispute her
signature she disputes the circumstances under
which it was appended.
The state did not lead evidence to fortify Mr Cezula's evidence on
this aspect.
[117]
Furthermore save for the computer printouts of the
BAS and Sundry documents, the other Finance documents remained copies
too, and
to add salt to injury, even those in the form they were
presented in before the court, on the State's version, were altered.
Again
no evidence was proffered to this court with regards to when,
why and by whom the documents were altered. Lastly and perhaps more
importantly, the state did not prove any common purpose between the
accused.
[118]
On Count 2 the State regrettably
failed
to pass even the barest of threshold; prima facie proof. An
application for discharge cannot be refused in the hope that
the
accused persons will incriminate themselves when they give evidence,
thereby closing material defects in the state's case.
[119]
On Count 3 the state had to prove that accused 4,
5, 7 and 8 unlawfully colluded and conspired with one another and
with a common
purpose to launder the proceeds of unlawful activities
whilst they knew or reasonably ought to have known that the funds
form the
Department paid to Nulane Investments were proceeds from
unlawful activities. Having had regard to the evidence led, this
count
and the decision I reach is probably the single most count that
will invoke a sense of loss, if not dejection, to the citizenry
of
this country.
It is an inescapable
fact
that almost R25 million rand of tax payers' money left the fiscus.
The
question that remains is why and who
facilitated this. Regrettably,
in casu,
the institutions responsible to answer
those questions failed. With their concessions Messrs. Rankuoatsana
and
lama
put
the death knell on the state's case.
[120]
The state regrettably failed to pass even the
barest of threshold. At the risk of repetition; an application for
discharge cannot
be refused in the hope that the accused persons will
incriminate themselves when they give evidence, thereby closing
material defects
in the state's case.
[121]
With regards to the fourth and final count, the
State fared no better. The state was, amongst others, required to
prove the elements
of misrepresentation to the Bank of Baroda,
National Treasury and the Reserve bank and that in misrepresenting as
they did, the
accused acted in concert with each other. Needless to
say no evidence from the Bank of Baroda, National Treasury and the
Reserve
bank was led in this court.
[122]
I have already bemoaned the lackadaisical manner
in which this case was investigated
and
approached,
I can therefore not take this
aspect any further than I have save to conclude with the following
African Proverb; "Haste and
hurry can only bear children with
many regrets along the way".
[123]
In the circumstances
I
make the following order:
123.1
The application in terms of section 174 of the
Criminal Procedure Act for the discharge of accused 1, 3-8 is granted
as follows;
123.1.1.
Accused
1 is found not guilty and discharged in respect of counts 1 and 2.
123.1.2.
Accused
3 and 6 are found not guilty and discharged in respect of count2
123.1.3.
Accused
4,
5, 7-8
are found not guilty and discharged in respect of counts 2, 3 and 4.
123.1.4.
Mr
Cezula is not indemnified.
NG
Gusha: AJ
21/04/2023