SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document
in compliance with the law and SAFLII Policy
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case No : 839/2023

In the matter between:
THE STATE APPELLANT
and
MBANA PETER THABETHE FIRST RESPONDENT
LIMAKATSO MOOROSI SECOND RESPONDENT
SEIPATI SILVIA DHLAMINI THIRD RESPONDENT
IQBAL MEER SHARMA FOURTH RESPONDENT
NULANE INVESTMENTS 204 (PTY) LTD FIFTH RESPONDENT
DINESH PATEL SIXTH RESPONDENT
ISLANDSITE INVESTMENT ONE SEVENTH RESPONDENT
HUNDRED AND EIGHTY (PTY) LTD
RONICA RAGAVAN EIGHTH RESPONDENT

Neutral citation: The State v Thabethe and Others (Case no 839/2023 ) [2025]
ZASCA 88 (12 June 2025)
Coram: SCHIPPERS , MEYER and MATOJANE JJA and MUSI and
NORMAN AJJA
Heard: 7 March 2025
Delivered: This judgment was handed down electronically by circulation
to the parties’ representatives by email, publication on the Supreme Court of
Appeal website and released to SAFLII. The time and date for hand -down is
deemed to be 11h00 on 12 June 2025 .
2

Summary: Application for leave to appeal – Criminal Procedure – reservation
by State of questions of law under s 319(1) of the Criminal Procedure Act 51 of
1977 – respondents charged with contravention of s 86(1) of Public Finance
Management Act, fraud and money laundering – found not guilty at close of State
case – High Court committing numerous errors of law – reserved questions of
law decided in favour of State – acquittal of respondents set aside – respondents
may be retried before a different Judge.
















____________________________________________ ____________________
3

ORDER
________________________________________________________________

On appeal from: Free State Division of the High Court , Bloemfontein (Gusha
AJ, sitting as court of first instance):
1 The application for leave to appeal is granted.
2 The questions of law reserved in questions 2, 3, 4, 5, 6 and 7 are decided
in favour of the State.
3 Questions 8 and 9 are not properly reserved for want of a factual
foundation.
4 The order of the Free State High Court dated 21 April 2023, in terms of
which :
4.1 the second respondent was acquitted on Counts 1 and 2 ;
4.2 the first and third to eighth respondents were acquitted on Count 2 ;
4.3 the fourth, fifth, seventh and eighth respondents were acquitted on
Counts 3 and 4 ; and
4.4 Mr Shadrack Cezula was not indemnified against prosecution under
s 204 of the Criminal Procedure Act 51 of 1977,
is set aside.
5 It is ordered that the respondents may be retried for the same offences in
respect of which they were acquitted by the Free State High Court on
21 April 2023, as if they had not previously been arraigned, tried and
acquitted: provided that a different Jud ge shall preside over the trial.
________________________________________________________________
JUDGMENT
________________________________________________________________
Schippers JA and Norman AJA (Meyer and Matojane JJA concurring )
Introduction
4

[1] This is an application for leave to appeal referred for oral argument in terms
of s 17(1) (d) of the Superior Courts Act 10 of 2013. It arises from a criminal case
tried before Gusha AJ in the Free State Division of the High Court, Bloemfontein
(the High Court), in which the respondents were found not guilty and discharged
at the close of the prosecution’s case . The app licant (the State) applied to the High
Court to reserve certain q uestions of law under s 319(1) of the Criminal Procedure
Act 51 of 1977 (CPA) . The High Court dismissed th e application , essentially on
the basis t hat the questions sought to be reserved by the State were not clear , and
are questions of fact, not law.

[2] Ordinarily, when a High Court refuses to certify a question of law under
s 319(1) of the CPA , this Court exercise s its discretion in favour of the State only
if there is a reasonable prospect that (i) a mistake of law was made ; and (ii) but
for the mistake of law , the accused would have been convicted.1 However, in this
case the requirement in (ii) does not arise (save for the second respondent , who
was found not guilty after she had closed her case ), because the remaining
respondents were found not guilty at the close of the State case in terms of s 174
of the CPA .2 So, the question is whether, had the mistake of la w not been made,
there was evidence on which a reasonable person might convict the respondents .3
Stated differently, it is whether at the close of the State case , there was no
possibility of a conviction unless the respondents incriminated themselves .4


The indictment

1 S v Basson 2003 (2) SACR 373 (SCA); 2003 3 All SA 51; 2004 (1) SA 246 paras 10 -11.
2 Section 174 of the CPA provides:
‘Accused may be discharged at close of case for prosecution
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.’
3 S v Khanyapa 1979 (1) SA 824 (A) at 838F.
4 S v Lubaxa 2001 (2) SA CR 703; 2001 (4) SA 1251 (SCA) (Lubaxa) para 15. This test was held to apply to a
case in which there is a single accused.
5

[3] The respondents were indicted in the High Court on the following counts ,
in broad summary :
(a) On Count 1, t he first and second respondents were charged with
contravening s 86(1) of the Public Finance Management Act 1 of 1999
(PFMA ), read with s s 38(1) (b), 38(1) (c)(ii), 38(1) (n) and 38(2) thereof .
The State alleged, inter alia, that they committed the Free State Department
of Agriculture and Rural Development (the Department) to a contract in
the sum of R24 984 240, without following a tender process ; that they
failed to ensure effective and transparent use of the Department’s
resources ; and that they failed to take steps to prevent irregular, and
fruitless and wasteful expenditure .
(b) Count 2 charged t he first to eighth respondents with the crime of fraud . The
State alleged that act ing in common purpose , they unlawfully and
intentionally conspired with one another and others, and made the
following misrepresent ations to the Department . A letter dated 3 October
2011 from Worlds Window Impex India PvT Ltd (Worlds Window) , had
been received by the Department in the ordinary course of business.
Worlds Window genuine ly inten ded to participate as a strategic partner in
the Department’s Mohoma Mobung Project (the Project). Worlds Window
required the appoint ment of the fifth respondent, Nulane Investments 204
(Pty) Ltd (Nulane), to do a feasibility study for the Project , which made it
impossible to follow the Department’s normal procurement processes . A
request, motivation and approval to deviate from these processes , dated
6 October 2011, was valid and bona fide . The amount of R24 984 240
charged by the fourth, fifth and sixth respondents for the feasibility study ,
was justified . The payments made to Nulane in terms of the contract
concluded with it, were lawful. By means of these misrepresentations the
respondents induced the Department , to its prejudice, to procure the
services of Nulane in contravention of the Constitution, the PFMA and the
6

Department’s procurement processes; to conclude a contract with Nulane ;
and to pay it R24 984 240 . When they made the misrepresentations , the
respondents knew that the Department had not received the Worlds
Window letter; that it had not advertised a need for a service provider to
undertake any feasibility study for the Project ; that the deviation from the
procurement processes , the appointment of Nulane and the contract
concluded with it, was unlawful ; that the contract price was inflated ; and
that the payments to Nulane were not lawfully due .
(c) On Count 3 the fourth, fifth, seventh and eighth respondents were charged
with money laundering in contravention of s 4 read with ss 1 and 8(1) of
the Prevention of Organised Crime Act 121 of 1998 (POCA ). The State
alleged that between Nove mber 2011 and July 2012, these respondents
unlawfully conspired with one another and others , and shared a common
purpose to launder R19 070 934 , which Nulane unlawfully obtained from
the Department through the contract , and which represented the proceeds
of unlawful activities (the proceeds) . The respondent s arranged for the
proceeds to be transferred from Nulane’s Bank of Baroda account to the
offshore Standard Charter Bank (SCB) account of Gateway Limited
(Gateway) , a company in the United Arab Emirates (UAE), under the
pretext that the sum of R19 070 934 was payment by Nulane for services
rendered in terms of a contract between Nulane and Gateway . This
arrangement by the respondents had the effect of concealing or disguising
the nature, source, location, disposition and movement of the proceeds, or
the ownership thereof, in breach of s 4(1) of the POCA.
(d) Count 4 charged the fourth, fifth, seventh and eighth respondents with
fraud. It was alleged that these respondents, acting in common purpose to
defraud, intentionally misrepresented to the Bank of Baroda, the Reserve
Bank of South Africa or the National Treasury and their employees, that
payments of R8 800 000 and R10 200 000 made in 2012 by Pragat to
7

Nulane’s Bank of Baroda account , were made in the ordinary course of
business ; that Nulane had concluded an agreement at arm’s length with
Gateway; and that the amount of R19 070 934 transferred to Gateway was
due and payable to Gateway as a result of a legitimate transaction . By
means of these misrepresentations the respondents induced the Bank of
Baroda, the Reserve Bank of South Africa or the National Treasury , to their
actual or potential prejudice, to grant permission for the transfer of funds
in circumstances where that permission should not have been granted as it
resulted in an outflow of funds from South Africa, and impacted
improperly on the balance of payments and the regulation of currency
exchanges between South Africa and the UAE. It also had the effect of
placing the proceeds of fraud beyond the reach of the South African
regulatory and criminal ju stice authorities. When the respondents made
these representations, they were aware that the payments by Pragat to
Nulane’s Bank of Baroda account were not made in the ordinary course of
business ; that the contract between Nulane and Gateway was not a
transact ion at arm ’s length ; that the agreement between them was
illegitimate ; and that t he amount s paid to Gateway were the proceeds of
unlawful activities described in Counts 1, 2 and 3.

[4] All the respondents were legally represented and pleaded not guilty to the
charges. They made no statements to indicate the basis of their defence as
contemplated in s 115 of the CPA, save for the second respondent. The sixth
respondent made certain admissions in terms of s 220 of the CPA.

[5] The second respondent’s s 115 statement was essentially the following. On
7 October 2011 s he approved a recommendation that the Departmen t deviate
from the Supply Chain Management (SCM) Policy and Treasury Regulations to
appoint Nulane ‘to perform due diligence and feasibility stud ies’ for the Project
8

(the deviation request ). She did so because Mr Shadrack Cezula, then the Acting
Director: S CM, and the first and third respondent s had endorsed the deviation
request. The second respondent admitted , in terms of s 220 of the CPA, that her
signature on the contract concluded with Nulane ‘appears l egitimate’.

[6] The sixth respondent , Mr Dinesh Patel, made the following s 220
admissions , inter alia . He is the brother -in-law of the fourth respondent , Mr Iqbal
Meer Sharma, a businessman . The fourth respondent is the sole director and
shareholder of Nulane, a South African company which held accounts at the Bank
of Baroda (account number 9[...] ) and Nedbank (account number 1[...] ). The
seventh respondent , Islandsite Investment One Hundred and Eighty (Pty) Ltd
(Islandsite), is also a company registered in South Africa.

[7] The trial was conducted over some six weeks. The State called
approximately 20 witnesses. The first and the third to eighth respondents were
found not guilty and discharged at the close of the State case . The second
respondent did not apply for a discharge in terms of s 174 of the CPA. She closed
her case, chose not to testify and called no witnesses. She was found not guilty
on Counts 1 and 2 .

The basic facts established in evidence
[8] In 201 2 the Free State Provincial Government introduced the Project. It
was a public -private business partnership concept, aimed at generating income
through farming , manufacturing and expa nding infrastructure in the rural areas
of the province ; creati ng agribusiness and value chain enterprises ; reducing the
costs of logistics to farmers ; alleviating poverty; and advancing black economic
empowerment. The private sector was encouraged to invest in the Project .

9

[9] It is a matter of public knowledge that the Department adopted the Project
on 22 March 2012 .5 Even before its adoption , on 3 October 2011 World s
Window , a company incorporated in India which trades in scrap metal , addressed
a letter to the Department (the Worlds Window letter). The State alleged that this
letter was not received by the Department in the ordinary course of business. In
the letter World s Window expressed its intent ion to participate in the Project as a
strategic partner ‘under the Public -Private Partnership (PPP) framework of South
Africa’ , which it said was projected at R1 billion . Worlds Window stated :
‘We agree in principle to participate on an equal (50/50) partnership basis to fund th is 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 inform ed 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 Planned Agent.’

[10] The State allege d that the Worlds Window letter started a process of
fraudulently extracting public funds from the Departm ent. These funds were then
laundered through , inter alia , the f ifth respondent , Nulane , Islandsite , Pragat
Investments (Pty) Ltd (Pragat) , Tegeta Resources (Pty) Ltd (Tegeta) , Oakbay
Investments (Pty) Ltd (Oakbay) , Gateway and the Sahara Group of companies
(Sahara) . Tegeta , Oakbay and Sahara are companies owned by the infamous
Gupta family , who t he Zondo Commission of Enquiry into State Capture found,
were involved in the corrupt capture of various government departments and
state-owned enterprises in this country , to ‘help themselves to the money and
assets of the people of SA’.6


5 The Weekly. Available at <www.theweekly.co.za >. Accessed 7 April 2025.
6 State Capture Commission Report, Vol 4, Part 4 , p 1041 para 2493 .
10

[11] Based solely on Worlds Window letter , the Department appointed Nulane
to carry out due diligence and feasibility studies, at a cost of nearly R25 million.
It is common ground that Nulane was appointed without a tender process in
violation of s 217 of the Constitution,7 purportedly in terms of the deviation
request.

[12] Mr Cezula drafted t he deviation request three days after the date of the
Worlds Window letter . It was not disputed that he did so on the instruction of the
third respondent . The first respondent , as the Head : Rural Development and the
third respondent , the C hief Financial Officer (CFO) , recommended the deviation
request and the appointment of Nulane . The second responden t, in her capacity
as the Accounting Officer of the Department, approved the deviation request .
These facts, and the signatures of these resp ondents on the deviation request , were
not disputed. The reason advanced for the deviation was that Worlds Window
required the appointment of its own agent ‘to be able to have the confidence in
the due diligence and feasibility study ’, apparently because it knew of the quality
of Nulane’s work. Nulane was not identified as the agent in the Worlds Window
letter .

[13] The deviation request records that the SCM Policy and Treasury
regulations allow the Department’s accounting officer to dispense with the
official procurement process only in an emergency or exceptional case . The
process can be dispensed with only if the goods or services sought to be procured
are available from a single provider; when acquir ing special works of art or
historical objects where the specifications are difficult to compile; and in any

7 Section 217 (1) of the Constitution provides:
‘Procurement. – (1) When an organ of state in the national, provincial or local sphere of government, or any
other institution identified in national legislation, contracts for goods or services, it must do so in accordance with
a system which is fair, equitable , transparent, competitive and cost-effective. ’

11

other exceptional case where it is impractical or impossible to follow the normal
procurement process.

[14] This was no exceptional case. Despite this, the memorandum states :
‘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 , the World Window Impex India PvT Ltd, that for them to be able to have
comfort and confidence in the due diligence and feasibility study, they require them to use the
services of Nulane Management Service s as they know the quality of work they performed in
similar projects around the world. Refer to the attached letter .’8

[15] According to the deviation request , the budget required for Nulane’s
services was R25 million. This was recommended and approved by the first,
second and third respondents .

[16] On 28 October 2011 the Department concluded two contract s in virtually
identical terms with Nulane . Nothing however turns on this, because the
Department paid Nulane in terms of a contract signed on its behalf by the second
respondent , in her capacity as the Department’s Accounting Officer . The third
respondent signed the contract as a witness . The sixth respondent signed the
contract on behalf of Nulane in his capacity as Project Director . The first
respondent was designated in the contract as the Department’s Project Officer.
He certified that Nulane had done the work and was entitled to payment.

[17] The contract describes the services to be rendered by Nulane as
‘Undertaking a study for the development of a Concept Document’ and
‘Identifying a possible strategic Investment Partne r’ for the Project (which,

8 Emphasis added.
12

according to the Worlds Window letter, was supposed to be Worlds Window
itself).

[18] The amount payable under the contract was R24 984 240. Of this amount
50% was payable to Nulane ‘as mobilisation funds in advance’ (the advance
payment) . Contrary to what is stated in the Worlds Window letter, t he contract
makes no provision for a 50/50 partnership between Nulane and the Department.
In fact, Nulane contributed not one cent to the Project.

[19] Neither did Nulane undertake any feasibility study, nor identify a strategic
investment partner. Instead, it immediately subcontracted the feasibility study to
Deloitte Consulting (Pty) Ltd (Deloitte) on 20 October 2011. The evidence
disclosed that the sixth respondent represented Nulane throughout its engagement
of, and negotiations with, Deloitte . Nulane instructed Deloitte to perform ‘high
level due diligence on identified projects in the Free State’. Deloitte rendered this
service at a cost of some R1.5 million and in voiced Nulane in February and April
2012 .

[20] Gateway, based in the UAE, was part of the scheme to defraud the
Department. On 2 December 2011 Nulane , represented by the fourth respondent,
concluded a contract with Gateway in terms of which services, described as a
‘statement of work’, would be ‘performed by Gateway’ (the Gateway contract) .
This work supposedly include d developing an understanding of the challenges
facing black smallholder farmers in the Free State, and utilising an investment
fund to create economic opportunities for smallholders and i nfrastructure
investments. The Gateway contract states that the Department has awarded a
contract to Nulane; that Gateway would present invoices for fees and expenses
monthly, which Nulane would pay into a bank account designated by Gateway
13

from time to time; and that the value of Gateway’s ‘services’ is USD 2 550 000.
These facts also, were not disputed.

[21] It was also not disputed that despite rendering no services to Nulane,
Gateway received a total amount of R19 070 934 , out of the R24 984 240 that the
Department paid to Nulane. Neither was it disputed that the sum of R24 984 240
was moved by way of numerous transactions into the bank accounts of various
companies associated with Nulane and Gateway, through layers of transactions ,
in which Islandsite and its financial manager, Ms Ronica Ragavan, the eighth
respondent, played a prominent role . Where appropriate, we refer to Ms Ragavan
as ‘the e ighth respondent’. As is shown below, this was done to distance the funds
from their criminal source – the fraud on the Department .

[22] So, what was established in the evidence, is that Nulane rendered no
services to the Department. All it did was to engage Deloitte to do a feasibility
study at a cost of about R1.5 million. Despi te this, the Department paid Nulane a
total of R24 984 240 . These facts also, are common ground. The amount w as paid
as follow s:
(a) R12 492 120 on 8 November 2011;
(b) R4 164 040 on 22 December 2011;
(c) R4 000 000 on 2 April 2012;
(d) R4 328 080 on 19 April 2012.

[23] The movement of the se funds paid by the Department to Nulane, was
determin ed by Mr Thesele Rankuoatsana, a financial investigator with the
National Prosecuting Authority . He analysed the information contained in five
bank accounts, namely the Nulane Nedbank account number 1[...] ; Burnelia (Pty)
Ltd (Burnelia) Standard Bank of South Africa account number 2[...] ; Pragat
14

Investments (Pty) Ltd (Pragat) Absa account number 4[...] ; Islandsite A bsa
account number 407217143 1; and Nulane Bank of Baroda account number 9[...] .

[24] Mr Rankuoatsana testified that the bulk of the R24 984 240 was transferred,
back and forth, through the Burnelia Standard Bank account, Nulane’s Bank of
Baroda account and the Pragat Absa account . These accounts were utilised as
conduits for the transfer of funds to and from the Islandsite A bsa account.

[25] The State also established that the transfer of funds into the Nulane Bank
of Baroda account from the Nulane Nedbank account was always followed
immediately by a transfer to the Pragat A bsa account with no transactions in
between. Likewise, the payment into the Nulane Bank of Baroda account from
the Pragat A bsa account was always followed immediately by a transfer to the
Nulane Nedbank account or the Gateway SCB account, with no transactions in
between.

[26] All these payments were made with no reference on the bank statements to
any document or transaction supporting the origin of , or the reason for, the funds
that were being transacted through the account s of the various companies . This
modus operandi was never challenged by the respondents. In short, the
prosecution proved , prima facie, that the true nature, source, disposition,
movement, rights with respect to, or ownership of the bulk of the R24 984 240
paid by the Department to Nulane, was concealed or disguised.

[27] The evidence showed that the fourth respondent, Mr I qbal Sharma, was a
signatory to the Nulane accounts, both at Nedbank and the Bank of Baroda . The
State demonstrated that Islandsite played a central role in utilising the Burnelia
Standard Bank account, Nulane’s Bank of Baroda account and the Pragat A bsa
15

account as conduits for the movement of funds to and from Islandsite ’s Absa
account.

[28] The funds paid by the Department to Nulane were also channelled through
a ‘cash focus system ’ held at Absa Bank by Sahara . Ms Linda Channing, a retired
employee of Absa Bank , testified that the cash focus system is a facility that
enables a customer to load multiple accounts on to the system for the movement
of funds. The system manager (also known as a ‘super user’ ) has full control of
it and can add various bank accounts to, and other persons as operators of , the
system. In this case, the manager of the cash focus system was Mr Atul Gupta.
He had unlimited access to the system, and was able to move funds, through the
operators, without limitation , to and from accounts which he had linke d to the
system. The evidence was that Sahara Holdings (Pty) Ltd, Sahara Systems (Pty)
Ltd, Sahara Consumers (Pty) Ltd, Sahara Distribution (Pty) Ltd, Oakbay, Tegeta ,
Pragat and Islandsite, formed part of the cash focus system .

[29] Counsel for Islandsite and Ms Ragavan put it to Mr Rankuoatsana that she
was ‘the financial manager of Islandsite’; that she was one of the operators of the
Islandsite account; and that ‘she would discuss with the operators [of the system]
the cash flow needs of the companies and the operators ’. Counsel also referred
Mr Rankuoatsana to various ledgers of Islandsite which records Ms Ragavan as
the ‘user’ in relation to various deposit s into Islandsite’s Absa account , described
in Islandsite’s ledger as a ‘transf -loan Pragat Investment . . . Ronica ’.

[30] One of these deposit s is an amount of R9.8 million , which Pragat moved
into Islandsite’s account on 8 November 2011 . On that day the Department paid
R12 492 120 into Nulane’s Nedbank account . This amount was the advance
payment in the contract awarded to Nulane , which was part of the proceeds of the
fraud. On the same day, ie 8 November 2011, Nulane moved R10 million of the
16

R12 492 120 to Pragat’s bank account ; and Pr agat, in turn, moved R9.8 million
of the R10 million to Islandsite’s bank account.

[31] In the next movement of funds relating to the advance payment , Nulane
paid R2 million of the initial R12 492 120 into Pragat’s bank account on
11 November 2011. On the same day, Pragat moved R2 million to the Islandsite
bank account, which contains the same reference as the R10 million deposit , ie
‘transf -loan Pragat Investment . . . Ronica’. That same day ie 11 November 2011,
Islandsite , in turn, moved R2 million through the cash focus system to another
company, Annex Distribution (Pty) Ltd (Annex Distribution). The latter company
is part of Sahara Holdings (Pty) Ltd. Mr Rankuoatsana testified that the directors
of Annex Distribution are Mr Atul Gupta, Ms Chitali Gupta and Ms Ragavan .

[32] Crucially, none of these transactions were disputed, let alone denied, by
either Islandsite or Ms Ragavan. Prima facie, the facts show that Ms Ragavan, in
her capacity as the financial manager of Islandsite, and as a director of Annex
Distribution, knew or must have known that the advance payment constitutes the
proceeds of the fraud perpetrated on the Department. These are but two
transactions which called for an explanation by Ms Ragavan.

The High Court’s judgment
[33] In the High Court, t he State rightly conceded that it did not make out a case
against the first respondent in respect of Count 1. Section 86(1) of the PFMA
provides that an accounting officer is guilty of an offence if that officer wilfully
or in a grossly negligent way fails to comply with the provision of s 38, 39 or 40
of that Act. The first respondent was not an ‘accounting officer’ as contemplated
in s 36 of the PFMA .

17

[34] The second respondent was the Accounting Officer of the Department as
defined in the PFMA. However, t he High C ourt did not consider s 86(1) of the
PFMA at all, and the judgment contains no reasons for the discharge of the second
respondent on Count 1.

[35] The court found that Count 2 was based mainly on the evidence of
Mr Cezula, the deviation request and the Worlds Window letter . It found that the
State case was ‘stillborn ’, solely on the following grounds : the State did not
adduce evidence to authenticate disputed documents ; the investigators were inept ;
and the evidence and documents were handled in a lackadaisical manner . Even if
it could somehow be argued that the Judge had misdirected herself on the
admissibility of disputed documents , given the evidence presented , the answer as
to what could be done with the documents, was, as the Judge put it, ‘zilch’.

[36] The High C ourt found that Mr Cezula was an evasive witness; that he ‘was
hell ben t on distancing himself from committing the offence of fraud’ ; and that
he sought to downplay his role in the preparation of the deviation request . It held
that Mr Cezula had to admit that he had committed fraud to avail himself of the
indemnity under s 204 of the CPA ; and that there was no corroboration for his
version regarding the compilation of the deviation request .

[37] The court went on to find that neither the facts nor Mr Cezula’s evidence
showed that ‘there was any prior agreement between him and any of the accused’
to act in concert to defraud the Department . Given the lackadaisical way the
matter was investigate d, the Judge said, ‘to find that common purpose under these
circumstances existed would be a quantum leap’ . The court found that Mr Cezula
had lied and that it could not attach any weight to his evidence. The fact that the
third respondent had not disputed that she signed the deviation request did not
corroborate his evidence. The court concluded that Mr Cezula’s evidence and
18

mendacity spoke for themselves, and made an order that he was not indemnified
in terms of s 204 of the CPA.

[38] On Count 3 the court found that the State ‘failed to pass the barest of
threshold’, and the question as to who facilitated almost R25 million of taxpayers’
money leaving the fiscus, and why, remained unanswered. The Judge said that
the concessions by the State witnesses concerning the flow of the funds which the
Department paid to Nulane, ‘put the death knell on the state’s case’.

[39] Regarding Count 4, the court held that the State did not prove a
misrepresentation to the Bank of Baroda , the National Trea sury and the Reserve
Bank. There was also no evidence that the accused had acted in concert in the
commission of the offence in Count 4.

[40] In the result , the court found the second respondent not guilty on Counts 1
and 2. In terms of s 174 of the CPA: the first respondent was found not guilty on
Count 1; the first and third to eighth respondents were found not guilty on Count
2; and the fourth, fifth, seventh and eighth respondents were found not guilty on
Counts 3 and 4. Mr Cezula was not indemnified against prosecution in terms of
s 204 of the CPA.

The questions of law
[41] The State submits that the High Court should have reserved the following
questions of law in its favour:
(a) Question 1: Whether on the proven facts, the conduct of respondents 1, 2,
3, 4, 5, 6, 7 and 8 prima facie was brought within the ambit of the offences
of s 86(1) of the PFMA, fraud and money laundering, as charged
respectively.
19

(b) Question 2: Whether in the light of the prima evidence that was placed
before the court, the decision to discharge the respondents at the end of the
State case, contrary to legal precedent, was such an error of law that it
constituted a gross irregularity in the trial, which prejudiced the State and
should be set aside.
(c) Question 3: Whether the Judge erred in law by misinterpreting,
misapplying or overlooking legal precedent as authority for the discharge
of the accused under s 174 of the CPA, specifically whether the Judge
applied the law in the context of a case involvin g several accused who may
implicate each other.
(d) Question 4: Did the court err in terms of the law of documentary evidence
in that after the court found exhibits TJM 11 (sundry payment advice),
TJM 12 (transaction log sheet) and TJM 13 (Nulane tax invoice dated
12 March 2012 for the amount of R8 328 080) to be originals, the Judge
later ruled the very same documents inadmissible ?
(e) Question 5: Whether the court, in respect of its ruling on 23 February 2023
that documents tendered in evidence by the State were inadmissible,
wrongly applied the best evidence rule, did not exercise its discretion
judicially or was influenced by wrong principles.
(f) Question 6: Did the court, in its application of the doctrine of common
purpose, contrary to established law, wrongly expect the State to prove a
prior agreement between the parties, or that they knew each other?
(g) Question 7: Whether the court correctly applied s 204(2) of the CPA, that
requires a witness to answer frankly and honestly all questions put to him .
(h) Question 8: Whether the court misdirected itself by conflating the question
of the indemnity of a witness in terms of s 204 of the CPA with the
discharge of an accused under s 174.
(i) Question 9: Whether the Court’s failure to make findings of fact as
enjoined by s 146 (a) of the CPA and Article 9 of The Code of Judicial
20

Conduct adopted in terms of s 12 of the Judicial Service Commission Act
9 of 1994 rendered the trial unfair.

[42] Three preliminary points are required to be made at the outset. First, the
State rightly abandoned its request that question 8 be reserved as a question of
law: there are no facts showing that the High Court had conflat ed the question of
indemnity of a witness under s 204(2) with s 174 of the CPA.9 The State also
conceded that there are no facts to support its request in question 9 that the alleged
failure of the Judge to comply w ith the Code of Judicial Conduct drafted in terms
of the Judicial Service Commission Act 9 of 1994 , rendered the trial unfair.
However, it persisted in its submission that the court failed to make findings of
fact as enjoined by s 146(a) of the CPA.10 This submission is incorrect: the court
made numerous findings of fact, as is evidenced by its judgment summarised
above.

[43] Second , a recurring theme in the respondents’ submissions is that the
questions sought to be reserved are inaccurately framed; and that the facts upon
which the point hinges are neither clear, nor fully set out in the record together
with the question of law, as r equired by Schoeman .11 However, this submission
is baseless, as is shown below.

[44] Third , a disturbing finding by the Judge – central to the entire case – is that
the State case was abortive from the outset . The Judge put it thus:
‘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

9 Question 8 reads: Whether the Court misdirected itself when conflating the question of indemnity of the witness
in terms of s 204(2) of the Act with the judgment in terms of s 174 of the Act.
10 Question 9 states: Whether the Court’s failure to make findings of fact as enjoined by s 146 (a) of the Act and
Article 9 of The Code of Judicial Conduct adopted in terms of s 12 of the Judicial Service Commission Act 9 of
1994 rendered the trial unfair.
11 Director of Public Prosecutions, Western Cape v Schoeman and Another [2019] ZASCA 158; 2020 (1) SACR
449 (SCA) para 39.
21

disputed documents. What this court instead heard was the ineptitude of the investigators and
indeed the lackadaisical manner in which evidence and disputed documents [were] handled
and a government department who seemingly evinced a wilful disregard to the manner in which
official documents were to be kept and archived. Just on these aspects only, the State case as
presented was still born .’12

[45] A court is obliged to consider the totality of the evidence before coming to
a conclusion on the guilt or innocence of the accused.13 The failure to do so,
constitutes an error of law. In this regard, the dictum of Sopinka J in Morin ,14 is
instructive:
‘A trial judge must consider all of the evidence in relation to the ultimate issue but unless the
reasons demonstrate that this was not done, the failure to record the fact of it having been done
is not a proper basis for concluding that there was an error of law in this respect.’

[46] This is a case where the reasons demonstrate that the trial Judge failed to
consider the totality of the evidence. Given the finding that the State case was
stillborn from the outset, solely for the reasons advanced by the Judge, the
inference is inescapab le – and the judgment itself shows – that the Judge had
closed her mind to the evidence adduced by the State. In other words, the finding
that the case was stillborn because of the State’s failure to present evidence to
authenticate documents, the incompet ence of the investigators, and the
Department’s failure to safeguard documents, was fundamental to the decision to
acquit the respondents in terms of s 174 of the CPA.

[47] We revert to this fundamental error of law when dealing with the various
questions of law. At this point it is appropriate to consider question 6 – whether

12 Emphasis added.
13 S v Van Der Meyden 1999 (1) SACR 447 (W) at 448H.
14 R v Morin [1992] 3 SCR 286 ( Morin ); JMH v Her Majesty The Queen and Director of Public Prosecutions
[2011] 3 RCS 197; 2011 SCC 45 para 31. Morin fn 14 at 296 f.
22

the High Court misapplied the doctrine of common purpose – given its centrality
to Counts 2, 3 and 4.

Question 6: Misinterpretation and m isapplication of common purpose
[48] The misapplication of the law – ordinarily when the wrong legal standard
is applied to the evidence – is an error of law. It carries the risk of a wrong
conviction (in this case an acquittal ) and an unfair trial.15

[49] The facts upon which this question hinges, in sum, are these :
(a) Contrary to the High Court’s finding, the State had alleged that the relevant
respondents acted in common purpose when committing the offences
referred to in Counts 2, 3 and 4.
(b) When the deviation request was drafted on 6 October 2011, Nulane had not
been registered with the Department as a service provider. Therefore, its
bank details were unknown to the Department. Mr Cezula testified that
these details were furnished by the thi rd respondent.
(c) The reason for the deviation is contrived and unlawful.
(d) Two virtually identical contracts were concluded between the Department
and Nulane with an effective date of 1 November 2011 and an expiry date
of 28 February 2012. Nulane was appointed to produce a feasibility study
for the Project. This service is neither unique nor innovative. Nulane was
paid R24 984 240 for it. Nulane immediately engaged Deloitte to render
the service and paid it R1 536 457.86.
(e) Worlds Window and its directors are business associates of Islandsite, its
directors, and Ms Ragavan .
(f) The first, second and third respondents acted in concert in unlawfully
appointing Nulane, and paying it. Immediately after Nulane was paid, the

15 Tuta v S [2022] ZACC 19; 2023 (2) BCLR 179 (CC); 2024 (1) SACR 242 (CC) (Tuta) para 51 ; Villacrop
Protection (Pty) Ltd v Bayer Intellectual Property GMBH [2022] ZACC 42; 2023 (4) BCLR 461 (CC); 2024 (1)
SA 331 (CC) para 64.
23

funds were transferred to and from the bank accounts including Islandsite,
Pragat, Oakbay, Tegeta and Sahara, through Sahara’s Absa cash focus
account.
(g) The facts show that the fourth, fifth, seventh and eighth respondents shared
a common purpose when laundering the funds and committing fraud,
referred to in Counts 3 and 4, respectively.
(h) The High Court wrongly rejected Mr Cezula’s evidence on the basis that it
did not evince any prior agreement between him and any of the accused to
defraud the Department.

[50] The respondents submit that question 6 does not raise a question of law and
that the existence of common purpose is a fact -based enquiry. They say that the
State should have presented evidence from which the inference of a common
purpose could be drawn.

[51] Regarding question 6, the High Court stated:
‘[A] proper reading of the judgment reveals that at no stage did the court intimate that common
purpose can only be established by proving prior agreement between the accused. In fact what
was found is that the applicant did not prove any common purpose between the accused. This
is a factual finding. ’

[52] But that is not so. The court applied the wrong legal standard in
determining that the State had not proved , prima facie, that the respondents had
acted in common purpose to defraud the Department. This plainly, is a question
of law. The judgment speaks for itself. The Judge said:
‘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 [if] it were so alleged, Mr Cezula testified that, save for accused 1 -3, he
did not know the other accused at all.’
24

[53] This is a misconception of the doctrine of common purpose. The re are two
categories of common purpose: (i) a prior agreement to commit a common
offence; and (ii) active association and participation in a common criminal design
with the requisite intention to commit a crime.16

[54] The High Court’s misconception of common purpose is exacerbated by the
finding that there was ‘no decision to act in concert’ to defraud the Department,
and no such decision was alleged in the indictment. However, Count s 2, 3 and 4
state, in terms, that the respondents unlawfully, intentionally and falsely colluded
and conspired with one another and or others; and acted in common purpose to
commit the offences charged. The State thus alleged common purpose based on
a prior agreement, or active association or participation in a common criminal
design.

[55] It is not necessary to analyse the evidence on each of these counts in detail.
Prima facie the evidence shows a carefully planned scheme , in which the
respondents pursued a common purpose to defraud the Department and launder
the proceeds .

[56] The Department did not publicly call for a feasibility study for the Project.
It did not receive the Worlds Window letter ; it was produced by the third
respondent. Without the deviation request, no contract could have been awarded
to Nulane. That request , in turn, could never have been approved without the co -
operation of the first , second and third respondents, by virtue of their positions in
the Department . There is accordingly direct prima facie evidence that Worlds
Window, Nulane (and its director, the fourth respondent) and the sixth respondent
(who instructed Deloitte) are involved in the fraud on the Department referred to
in Count 2; and that the proceeds, derived from that fraud, were laundered almost

16 S V Hoctor and C R Snyman Snyman’s Criminal Law 7 ed (2019) at 225 and 227.
25

immediately after each payment by the Department to Nulane , in which Islandsite
and Ms Ragavan played a central role. Thus, the participation of each of the
respondents is an essential link in the chain of criminal conduct in carrying out
the scheme , designed to defraud the Department out of almost R25 million .

[57] Prima facie, therefore, the State established common purpose based on a
prior agreement, which may be inferred from the facts ; or active association and
participation by the respondents in a common criminal design, with the intention
of committing the offence s alleged in the indictment. The High Court’s
application of the wrong legal standard regarding common purpose, resulted in
the acquittal of all the respondents on Count 2 ; the acquittal of the fourth, fifth,
seventh and eighth respondents on Counts 3 and 4 ; and an unfair trial. The
Constitutional Court has held that ‘[t]he right of an accused to a fair trial requires
fairness to the accused, as well as fairness to the public as represented by the
state’.17

[58] However, the minority judgment conclu des that ‘there was no evidence on
which [Ms Ragavan] could be convicted after closure of the State’s case’, and
that she was correctly discharged. The grounds for this conclusion, in sum, are
these. Ms Ragavan was not at the scen e and did not commit any act of association ,
when the fraud referred to in Counts 2 and 4 was perpetrated. There is no proof
that the money advanced to members of the cash focus system, was money from
the Department. This judgment conflates her role with that of the directors of
Islandsite . Ms Ragavan’s task as financial manager was to keep proper books,
which she did. Islandsite ‘was the puppet master’ and there is no possibility that
any of the respondents might incriminate Ms Ragavan.


17 S v Jaipal [2005] ZACC 1; 2005 (4) SA 581 (CC); 2005 (5) BCLR 423 (CC); 2005 (1) SACR 215 (CC) (Jaipal )
para 29 .
26

[59] We respectfully disagree . Prima facie, the evidence establishes the
following. First, as demonstrated above, the respondents carried out a common
purpose to defraud the Department and launder the proceeds . Second, the funds
trans acted through Islandsite’s account emanated from the Department. Third, it
is inc onceivable that Ms Ragavan, the financial manager of the ‘puppet master’,
Islandsite, and an o perator of its bank account, was not involved in the fraud and
money laundering ; she is no ordinary bookkeep er. Fourth , this involvement called
for an explanation from Ms Ragavan.

[60] What remains concerning this question, is the High Court’s conclusion that
to find common purpose ‘would be a quantum leap’, because of the lackadaisical
manner in which the case was investigated. This conclusion merely underscores
the fact that an objective assessment of the evidence was overshadowed by the
court’s finding that the State case was stillborn, because of the inept itude of the
investigators and the failure to secure official documents. This error of law, to
which the minority judgment pays no regard, is reinforced by the following
groundless statement by the Judge:
‘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 .’

[61] The High Court’s error of law is inimical to the interests of justice: the
Constitutional Court has stated that the aim of the doctrine of common purpose
is to impute the acts of a perpetrator to all the co -perpetrators, to overcome an
otherwise unjust result which offends the legal convictions of the community.18
This aim was undermined by the application of the wrong legal standard to
common purpose . This, i n turn, directly influenced the High Court’s decision that
there was no evidence that the respondents had committed the offences; and that

18 S v Tshabalala and Another [2019] ZACC 48 ; 2020 (3) BCLR 307 (CC) ; 2020 (2) SACR 38 (CC); 2020 (5)
SA 1 (CC) para 56.
27

a conviction was not possible , except if they incriminated themselves. It follows
that question 6 must be answered in favour of the State.

Question 4 : Admission of documen ts and then ruling them inadmissible
[62] The High C ourt’s finding that the prosecution had not discharged the onus
of proving the admissibility of documents, raises a question of law.19

[63] The facts on which th is point hinges, in sum, are the following:
(a) The acquittal of the respondents was based on the fact that the original
documents did not serve before the court. This had an impact on the
Judge’s assessment of the undisputed factual evidence.
(b) On 23 February 2023 the Judge ruled that a sundry payment advice
(Exhibit TJM 11), a transaction log sheet ( Exhibit TJM 12) and a tax
invoice issued by Nulane dated 12 March 2012 in the sum of R8 328 080
(Exhibit TJM 13) , were originals and admissible in evidence.
(c) Ms Setoane Motshumi, the a uthor of the transaction log sheet, confirmed
its contents. So too, did the author of the sundry payment advice,
Mr Kenosi Thubisi. He testified that the second respondent had authorised
the payment of R8 328 080 to Nulane. She did not dispute this.
(d) However, the judgment contradicts the court’s earlier ruling that these
documents were admissible. The Judge said:
‘All the evidence that they [the State] sought to rely on to prove authenticity came to
nought save for the evidence of Mr Cezula.’
(e) Later the Judge said:
‘[A]ll other copies of documents sought to be relied on by the State are now with the
benefit of having had regard to the evidence led up to this point, ruled inadmissible.’


19 Rex v Nchabeleng 1941 AD 502 at 504; Magmoed v Janse van Rensburg and Others 1993 (1) SA 777 (A);
[1993] 4 All SA 175 (AD ) (Magmoed ) at 823B -G; affirmed in S v Basson 2005 (1) SA 171 (CC) para s 49 and 60 .
28

[64] In refusing to reserve this question as one of law , the Judge said , ‘the
answer is to be found in the judgment’ ; and it ‘is not a question of law at all, if
anything it is once more an illustration of how the applicant misconstrues the
judgment complained of’ . Then it is said the question ‘is quintessentially a matter
of evaluation of the evidence as presented’; and that the ruling of 23 February
2023 was provisional.

[65] None of these statements is correct. What is more, they are compounded
by the court’s finding that the State case was abortive from the outset , because of
the incompetence of the investigators and the lack of interest in handl ing evidence
and documents.

[66] The undisputed evidence is this. Mr Cezula drafted the deviation request
on the instruction of the third respondent. The first, second and third respondents
signed the deviation request. This led to the conclusion of the contract with
Nulane to conduct fea sibility studies at a cost of almost R25 million. The second
respondent signed that contract on behalf of the Department. The first respondent
certified that Nulane had rendered the services under the contract and was entitled
to payment. And the Departmen t paid Nulane R8 328 080 for which it had been
invoiced, albeit that the payment was made in two tranches .

[67] So, Nulane’s original tax invoice of 12 March 2012 for R8 328 080, the
original payment advice reflecting this amount, and the evidence of Ms Motshumi
and Mr Thubisi, confirm the undisputed evidence. The finding that all the
evidence on which the State relied to prove the authenticity of documents came
to nought , is inexplicable and irrational. So too, the ruling that having regard to
the totality of the evidence, the copies on which the State relied were
inadmissible . Question 4 must therefore be answered in favour of the State.

29

Question 5 : misapplication of the best evidence rule
[68] The admissibility of evidence raised by this question, determined by legal
principles and rules, is a question of law. The basic facts relevant to this question,
in sum, are the following:
(a) Dr Takisi Masiteng, the current HOD, testified that the Department had
moved offices during 2012 to 2013 ; that its documents were packed and
transported by a private moving company; and that there was confusion as
to the whereabouts of the documents. The State witnesses testified that the
Department conducted searches on two different occasions in 2021 (nine
years later). This evidence met the legal standard of a diligent search.
(b) During these searches, the originals of only a sundry payment advice, a
transaction log sheet and a tax invoice issued by Nulane dated 12 March
2012 in the sum of R8 328 080 , were located. Copies of, inter alia, the
Worlds Window letter, the deviation request, the contract to Nulane, the
SCM Policy and a report by Deloitte, were also found.
(c) The State presented evidence by various witnesses to identify certain
documents as true copies. Mr Petros Mofokeng identified the contract
between the Department and Nulane, as one of the documents which he
had considered when making payment to Nulane in 2 012. He also
identified an invoice from Nulane to the Department; and a sundry payment
form completed by the Department authorising the payment of that invoice
to Nulane, in March 2012. He identified his, and the first respondent’s
signature, on the paymen t form.
(d) Mr Cezula confirmed that the deviation request was a true copy of the
document that he had prepared. Dr Masiteng confirmed that the copy of
the SCM Policy was the policy of the Department applicable at the relevant
time. This policy was approved by the fir st respondent, then the
Accounting Officer. The authors of the Deloitte report identified it as their
30

work product, save that there were changes to the report made by unknown
persons.
(e) The court however found that ‘nothing in the evidence as presented by the
state suggests that a bona fide and thorough search for these documents
was conducted’; and that it was not satisfied that the originals were lost.
(f) After they were retrieved, the documents were stored overnight at a police
station. The Judge said that these documents ‘were mishandled with no
correct chain of custody being complied with’. However, the respondents
did not suggest that the documents were fabricated or tampered with.
Further, the State witnesses identified the documents as those seized by the
police, and the relevant respondents admitted signing the deviation request
and payment advice.
(g) The Judge found that the State case was stillborn, solely because of the
ineptitude of the investigators and the lackadaisical way evidence and
disputed documents were handled.

[69] The High Court stated that this question is purely one of fact and that the
best evidence rule had not been satisfied. The court further stated that the question
whether it had exercised its discretion judicially, is a fact -based enquiry.

[70] The High Court misapplied the best evidence rule, or more correctly, the
rules relating to the admission of documentary evidence. The finding that the
State case was stillborn for the reasons advanced, was fatal to the Judge’s
approach to the admission of documentary evidence.

[71] The court’s finding that the searches by the Department were neither bona
fide nor diligent, or that the investigators were inept, has no foundation in the
evidence. And the chain of custody point is a red herring: there was no suggestion
31

that the documents were tampered with, and the bulk of the documents found
during the searches were not disputed by the respondents.

[72] The appointment of Nulane did not occur in a vacuum. Prima facie, t he
Worlds Window letter and the deviation request, which trigger ed all the offences,
were proved by secondary evidence, namely that of Mr Cezula. The first and third
respondents did not dispute that they had recommended the deviation request;
and the second respondent, that she approved the request and Nulane’s
appointment . It is common ground that the Department paid Nulane R24 984 240.
The Deloitte report, albeit with amendments, was ident ified by its authors as their
work product, which was sent to Nulane. The State produced original documents
proving the payment of R8 328 080 to Nulane. The movement of funds after the
Department paid them to Nulane, was also not disputed.

[73] The High Court misapplied the best evidence rule. It failed to apply the
principle that secondary evidence may be admitted and relied on, and that the
weight to be attributed to it will depend on the circumstances of the case.20 This
is an error of law. It is compounded by the Judge’s finding that even if there was
a misdirection on the admissibility of documents, that in the face of the evidence,
the Judge could do ‘zilch’ with the documents. The use of this colloquialism is
unfortunate ; it does not belong in a judgment. It follows that question 5 must be
decided in favour of the State.

Question 7 : misinterpretat ion and misapplication of s 204 of the CPA
[74] As with the other questions of law, the respondents submit that this
question is inaccurately framed; and that the facts upon which the point hinge s
are not clear. The respondents are however mistaken.


20 See generally D T Zeffert and A T Paizes The South African Law of Evidence 3 ed (2017) at 955.
32

[75] The legal point raised in question 7 is clear. It is whether the High Court
erred in its interpretation and application of s 204 of the CPA.

[76] The facts upon which question 7 hinges, are equally clear and concise.
They can be summarised as follows :
(a) The court found that a noteworthy feature of Mr Cezula’s evidence was
that he had not once implicated himself in the commission of the fraud
perpetrated on the Department. At best, he admitted contravening the
PFMA.
(b) Mr Cezula’s evidence that he had prepared the deviation request on the
instructions of his supervisor, the third respondent, was not disputed. The
court ignored Mr Cezula’s evidence that the deviation request was unusual;
that he was under pressure from the third respondent to draft the request
without the standard documents required by the SCM processes; and that
the required checks on the service provider (Nulane) concerning its
performance, had not been done.
(c) The Judge erred in finding that Mr Cezula was obliged to testify that he
had the intention to commit fraud.

[77] Counsel for the seventh and eighth respondents submit that question 7 is
quintessentially one of fact; and that the court did not find that Mr Cezula had to
admit he had committed fraud. It is further submitted that there was no
misapplication of the law a nd that even if there was, it does not affect the acquittal
of the respondents.

[78] The High Court held that this question ‘in so far as it is disguised as a
question of [law], is of no moment’. The Judge said that in the application for the
discharge of the respondents, the State had submitted that the court, when dealing
with the provisions of s 204, had correctly applied that provision and properly
33

warned Mr Cezula, which put paid to the question. The Judge went on to say that
in any event, ‘on this score too, the judgment is instructive’.

[79] The judgment however demonstrates that the court misconstrued and
misapplied s 204 of the CPA. The Judge rejected Mr Cezula’s evidence on the
ground that he refused to admit that he had committed fraud. Here too , the
judgment speaks for itself:
‘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 Serunya [the prosecutor] could get Mr Cezula to admit to committing an
offence, let alone fraud. Ins tead he testified that he committed an error of judgment. At best
what he admitted to was contravening the Public Finance Management Act.’

[80] In her evaluation of Mr Cezula’s evidence, the Judge said:
‘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.’

[81] Nothing could be clearer. This is a misinterpretation and misapplication of
s 204(1) (b) of the CPA. It requires the witness to give evidence and answer any
question put to him by the prosecution, the accused or the court, regardless of
whether the reply may incriminate him in relation to the specified offence. It does
not require the witness to admit to the specified offence. If the co urt is of the
opinion that the witness has answered the questions put to him frankly and
honestly, he must be discharged from prosecution.21


21 Section 204(2) of the CPA.
34

[82] Aside from rejecting Mr Cezula ’s evidence based on a wrong legal
principle, the order that he is not indemnified against prosecution, is a further
error of law , with grave consequences for Mr Cezula. This order was made
without granting him an opportunity to be heard, to which he has a right or
legitimate expectation.22 This is a gross irregularity.23

[83] The respondents’ submission that the misapplication of s 204 has no effect
on their acquittal, is startling. Mr Cezula’s evidence concerning the preparation
of the deviation request is foundational to the State case on all four counts. The
rejection of his evidence on the basis that he failed to admit to fraud, was not only
a misinterpretation and misapplication of s 204: the High Court also ignored the
totality of the evidence, and the common cause facts regarding the deviation
request, as is demonstrated above.

[84] The High Court misconstrued and misapplied s 204 of the CPA. This
resulted in a rejection of Mr Cezula’s evidence and a refusal to grant him
indemnity. In turn, this rendered his evidence, which the Judge herself noted was
essential to prove Counts 1 and 2 , of no probative value . Question 7 likewise,
must be decided in favour of the State.

Question 2: Was there legal evidence justifying the discharge of the
respondents under s 174 of the CPA ?
[85] The State submits that the decision to discharge the respondents at the close
of the prosecution’s case , contrary to legal precedent, was an error of law and
constituted a gross irregularity in the trial . The errors of law referred to above
resul ted in the conclusion that there was no legal evidence upon which a

22 See A Kruger Hiemstra’s Criminal Procedure 3 ed at 23 -50 and the authorities there cited.
23 Mohammed v Attorney -General of Natal and Others 1996 (1) SACR 139 (N) at 145h.
35

reasonable person might convict , as contemplated in s 174 of the CPA. As such,
it is a question of law.24

[86] The basic facts relevant to question 2 can be summarised as follows:
(a) The Worlds Window letter dated 3 October 2011, was used to motivate a
deviation from the Department’s procurement processes.
(b) On 6 October 2011 t he deviation request was prepared on the instruction
of the third respondent . It was recommended by the first respondent and
approved by the second respondent on 7 October 2011.
(c) Nulane’s name does not appear in the Worlds Window letter. It was not
registered as a service provider with the Department , and did not apply to
be registered as such when the deviation request was drafted .
(d) Nulane subcontracted the services to Deloitte at a cost of R1 538 457.86.
(e) The Department paid Nulane R24 984 240 , purportedly for the services.
(f) The fourth respondent signed the Gateway contract on behalf of Nulane.
(g) The respondents did not dispute the movement of the funds after the y were
paid to Nulane by the Department .

[87] When the evidence is measured up to the legal standard in s 174, prima
facie, the State established evidence on which a reasonable person might have
convicted the respondents. This applies to all four counts.

Count 1
[88] The second respondent, the Department’s A ccounting Officer , signed the
deviation request – which she admitted. In approving the deviation, she
committed the Department to a contract of nearly R25 million, without following
a tender process . She thus failed to ensure the effective and transparent use of the
Department’s resources, and incurr ed irregular, and fruitless and wasteful

24 Magmoed fn 19 at 823B -G; Basson fn 19 para 49.
36

expenditure. This conduct , prima facie, is a contravention of s 86(1) of the
PFMA.25 Put differently, the High Court failed to consider whether the proven
facts constituted the commission of the offence charged in Count 1 – a question
of law that should have been reserved in favour of the State.26

[89] The following statement by the Judge when acquitt ing the second
respondent, is directly at odds with th e evidence . The Judge said :
‘We have sat through six weeks of this trial. Not even once, especially in your instance, not
even once was this court ever favoured with even an iota of evidence linking you to any
wrongdoing. ’

Count 2
[90] As stated, the respondents participated in a carefully planned scheme in
which the y pursued a common purpose to defraud the Department and launder
the proceeds. The prima facie case against each participant in this scheme ; the
entitlement of Nulane to nearly R25 million; and the grounds upon which
Islandsite and Gateway (in the UAE) were entitled to receipt of the Department’s
funds , cried out for an explanation by the respondents.

[91] More specifically, the prima facie evidence on which a reasonable person
might have convict ed the respondents include s the following, and called for an
explanation by the respondents :
(a) It is not coincidental that the same officials, ie the first, second and third
respondents were involved in the deviation request, and the conclusion and
implementation of the contract with Nulane.

25 Section 86(1) of the PFMA provides:
‘An accounting officer is guilty of an offence and liable on conviction to a fine, or to imprisonment for a period
not exceeding five years, if that accounting officer wilfully or in a grossly negligent way fails to comply with a
provision of section 38, 39 or 40.’
26 Magmoed fn 19 at 808A.
37

(b) Unsurprisingly, the Worlds Window letter does not identify the agent
required to be appointed. It states: ‘we will immediately advise you of the
details of the planning agent’. So, the only inference to be drawn is that the
first, second and third respondents must have known the identity of the
agent – Nulane ; and there must have been collusion between Nulane and
the respondents.
(c) The Worlds Window letter also does not authorise nor require the
conclusion of any contract between the Department and the unknown
agent. This raises the question: Where did the estimated budget of R25
million in the deviation request come from?
(d) Contrary to what is stated in the letter, Worlds Window never entered into
any public -private partnership with the Department.
(e) The fourth respondent is the sole director of Nulane and knew or must have
known (i) that it did not participate in any tender process ; (ii) that it had
been put up as the agent of Worlds Window to extract public funds from
the Department ; (iii) that Worlds Window had no intention of entering into
any public -private partnership with the Department; (iv) that Nulane was
not entitled to payment of almost R25 million ; (v) that the Gateway
contract was a sham; and that the scheme was designed to fraudulently
extract funds from the Department and launder the proceeds to the UAE .
(f) Nulane submitted invoices to the Department and received payment of
nearly R25 million, knowing that: (i) it had not participated in any tender
process; (ii) it had not done the work (the feasibility study was outsourced
to Deloitte at a cost of approximately R1.5 million); (iii) it was not entitled
to payment of nearly R25 million ; and (iv) the bulk of that amount would
be laundered to Gateway in the UAE.
(g) The sixth respondent signed the contract as the Project Director of Nulane .
Therefore, he must have been aware of the fraud perpetrated by the first to
fifth respondents in engineering the award of the contract to Nulane.
38

(h) Islandsite and Ms Ragavan could not have accepted the funds which
emanated from the Department, without being aware of the entire scheme,
specifically the payments to Nulane , which have their source in the
fraudulent award of the contract to it. Islandsite, acting through one of its
directors, Mr Atul Gupta , and its financial manager, Ms Ragavan, was the
recipient of the bulk of the se funds . Both Islandsite and Ms Ragavan
actively participated in the receipt and movement of the funds.
Ms Raga van, who is responsible for the monitoring, protection and
oversight of Islandsite’s finances , never raised any query about the source
or entitlement of any transferee to the advance payment, nor indeed about
the total funds of R 19 070 934 moved to Gateway in the UAE. Gateway
received t his amount under the pretext that it constituted payment by
Nulane for services rendered in terms of the Gateway contract.

[92] Prima facie , the evidence show ed that the Worlds Window letter and the
deviation request are inextricably linked . These documents form the basis of
everything that followed. Remarkably, the High Court did not see it that way. In
acquitting the second respondent, the Judge said:
‘All that I know is that someone compiled a submission that flew in [through] the window.
Someone signed L Moorosi. They did not even take the trouble, and it could have been so
easily ascertained just to compare L Moorosi to your ordinary handwriting and your ordinary
signature. They did not do that.’

[93] This, when the second respondent in her plea explanation admitted signing
the deviation request. And it was not disputed that Mr Cezula had drafted it, nor
that the first and third respondents had also signed the request. What is more,
counsel for the thir d respondent when cross -examining Mr Cezula, suggested that
the first respondent may have given the Worlds Window letter to him. What was
never disputed, was that the letter was attached to the deviation request. In fact,
it was put to Mr Cezula: ‘you had the attached Windows India letter there’, when
39

he brought the deviation request to the third respondent for her recommendation.
Further, the High Court’s finding that the State ‘did not take the trouble to
investigate the origin of the letter’, suggest ing that the Worlds Window letter has
no evidential value, also demonstrates the pervasiveness of the finding that the
State case was stillborn.

[94] For the above reasons , the State, prima facie, established that the
respondents had committed the fraud described in Count 2. Their acquittal on this
count is baffling.

Count 3
[95] The respondents did not dispute the movement of funds referred to in this
charge. The thrust of the defence by the Islandsite and Ms Ragavan was that these
funds constituted loans made and received by Islandsite, which fulfilled a treasury
function within the cash focus system .

[96] In cross -examination , counsel for the seventh and eighth respondents put
the defence thus:
‘COUNSEL : But you say in your report and I can go to the passages. Often you say there is
nothing in the bank statement to indicate what this was for, like an invoice number. Remember
that?
MR RANKUOATSANA : Yes
COUNSEL : But these companies know each other very well. They know if Islandsite sends
money to Oakbay it is a loan. Oakbay sends it back, it is a repayment of the loan. They do not
have to talk to themselves in their own bank statements, saying what did you do wi th the money
that you sent to Oakbay? They know it is a loan. Why do they write to themselves and tell them
what they – themselves [know] what they are doing? You would expect that of them.’
And later:
‘COUNSEL : You see Islandsite was a holding company and a treasury function.
MR ZAMA : Ja
COUNSEL : So it was not trading, it was borrowing and lending, borrowing and lending.’
40

[97] However, this defence raised more questions than answers . The minority
judgment does not grapple with this . The evidence, particularly in the light of
Islandsite’s ‘treasury function’, called for an explanation from the fourth, fifth,
seventh and eighth respondents , for the following reasons :
(a) Islandsite is neither a trading company nor a financial services provider . If
it serves a treasury function – managing the financial resources of a
business to reach it goals and the risk s associated with its assets – then it is
inconceivable that there would be no reference on bank statements to any
document or transaction supporting the origin of , or reason for, the funds
transacted through the accounts of the various companies.
(b) The entities involved in the movement of funds extracted from the
Department are companies, not natural persons. One would therefore
expect that there would be an indication of the nature and source of the
funds in each transaction , and the entitlement of each company to receive
them.
(c) Funds are transferred from company to company with no reference on the
bank statements as to the source of these funds and what they are for. How
do the companies in between the various transactions know what these
funds are intended for, and which compani es are entitled to them?
(d) If these numerous, rapid, transfers of funds on the same day are genuine,
why does Islandsite first transfer the funds to various companies before the
so-called loan ends up with the company it is suppos edly intended for?
Why does Islandsite not transfer the funds directly to the company
receiving the ‘loan’?
(e) Loans are used by companies to generate income. Why then would a
company which receives a ‘loan’, pay back the ‘loan’ to Islandsite or
another company on the same day?
(f) If Islandsite is truly making these ‘loans’, then it makes no commercial
sense for it to immediately or within a very short space of time, borrow the
41

same or similar amount from the entity to which it had just made that loan .
Aside from this being commercially insensible, it is inconsistent with a
function of a treasury house, whose main purpose is to generate capital,
ensure the financial well -being of a company and mitigate risk.

[98] So, far from being the ‘death knell’ to the State case, prima facie the
evidence of Messrs Rankuoatsana and Zama established the movement of the
funds from the Department to Nulane’s Bank account , from which they were
rapidly transferred from one account to another through the cash focus system,
and through layers of artificial transactions set out in Count 3 . Islandsite and Ms
Ragavan played a pivotal role in the co -ordination of these transactions, which
were designed to distance the funds from their crim inal source – the fraud on the
Department – and to make detection of the source as difficult as possible. This,
prima facie, is a typical case of money laundering as contemplated in s 4(1) of
the POCA.27 The relevant respondents should not have been acquitted on Count 3.

Count 4
[99] Count 4 can be dealt with briefly. The High Court failed to apply the
elements of fraud. It is trite that fraud consists of an unlawful, intentional
misrepresentation which causes actual prejudice or is potentially prejudicial to

27 Section 4 of POCA provides:
‘Money laundering
Any person who knows or ought reasonably to have known that property is or forms part of the proceeds of
unlawful activities and -
(a) enters into any agreement or engages in any arrangement or transaction with anyone in connection with
that property, whether such agreement, arrangement or transaction is legally enforceable or not; or
(b) performs any other act in connection with such property, whether it is performed independently or in
concert with any other person,
which has or is likely to have the effect -
(i) of concealing or disguising the nature, source, location, disposition or movement of the said property or
the ownership thereof or any interest which anyone may have in respect thereof; or
(ii) of enabling or assisting any person who has committed or commits an offence, whether in the Republic or
elsewhere -
(aa) to avoid prosecution; or
(bb) to remove or diminish any property acquired directly, or indirectly, as a result of the commission of an
offence,
shall be guilty of an offence. ’
42

another.28 The transactions constituting the movement of funds and specifically ,
the payments of R8 800 000 and R10 200 000 by Pragat to Nulane’s Bank of
Baroda account; and the transfer of R19 070 934 from Nulane to Gateway, were
not disputed. When making these payments the relevant respondents unlawfully
and intentionally misrepresented that these payments were in the ordinary course
of business and legitimate transactions, to the prejudice or potential prejudice of
the Bank of Baroda, the Reserve Bank of South Africa and/or the National
Treasury.

[100] The payment to Gateway referred to in Count 4 was impossible if
Islandsite, acting through Ms Ragavan, had not paid an amount of R8.8 million
to Pragat on 2 July 2012. On the same day, Pragat paid the same amount to
Nulane’s Bank of Baroda account. On 6 Ju ly 2012 Islandsite, via the cash focus
system with the eighth respondent as the ‘user’, transferred R10.2 million to
Nulane Bank of Baroda account. The eighth respondent thus facilitated the fraud
in Count 4 by transferring both these amounts to Pragat and Nulane, respectively,
via the cash focus system . Nulane applied on the same day, 6 July 2012, to the
Bank of Baroda for the overseas transfer of funds to Gateway.

[101] The evidence prima facie shows that the fourth, fifth, seventh and eighth
respondents knew or must have known that Gateway had rendered no services to
Nulane, which entitled it to payment of any amount emanating from the
Department . Prima facie t hese transactions themselves (and not evidence of a
representation to the Reserve Bank, the Bank of Baroda or the National Treasury),
constitute the fraud described in Count 4, which called for an explanation by these
respondents . In addition, if Ms Ragavan was not registered by Mr Atul Gupta as
a ‘user’ on the cash focus system , she had to explain how her name appeared as

28 S V Hoctor and C R Snyman Snyman’s Criminal Law 7 ed (2019) at 461; S v Gardener [2011] ZASCA 24;
2011 (1) SACR 570 ; 2011 (4) SA 79 (SCA) para 29.

43

a ‘user’ in relation to the transactions referred to above, as well as the transactions
which resulted in the ultimate transfer of funds to Gateway in the UAE.

[102] Further , on the version of Islandsite and the eighth respondent put to the
State witnesses, prima facie, they committed fraud: the payments to Gateway do
not constitute ‘borrowing and lending’ by Islandsite functioning as a treasury
house. Rather, these payments were purportedly made in terms of the Gateway
contract. It follows that the respondents ought not to have been acquitted on
Count 4.

Question 3: misapplication of s 174 of the CPA regarding multiple accused
[103] The basic facts on which this question hinges, in sum, are the following:
(a) Mr Cezula’s evidence that the third respondent had instructed him to draft
the deviation request, was never disputed.
(b) The second respondent, in her plea explanation, said that she approved the
deviation request because Mr Cezula, the first and third respondents had
recommended it.
(c) The cross -examination on behalf of the first to sixth respondents
demonstrated that they would implicate each other in the commission of
the offences. For example, the third respondent denied that she was the
source of the Worlds Window letter, and it was put to Mr Cezula that the
first respondent could be the source of the letter. Similarly, in cross -
examination the sixth respondent implicated the fourth respondent as
having had knowledge of the award of the contract to Nulane.
(d) The first respondent signed a Nulane invoice (proved to be an original)
dated 12 March 2012, certifying that Nulane had rendered services to the
Department. The third respondent, as CFO, signed a sundry payment
advice, also proved in evidence.
44

(e) Counsel for the sixth respondent put it to Mr Van Zyl of Deloitte that the
emails concerning his engagement of Deloitte and the conclusion of the
contract between Nulane and Deloitte, were sent on the instructions of
Mr Ashok Narayan. This included an emai l sent by the sixth respondent
to Deloitte on 25 October 2011 in which he insisted that the project must
commence before December 2011.
(f) The fourth, fifth, seventh and eighth respondents did not dispute the
movement of funds in relation to Count 3.

[104] The High Court held that question 3 is one of fact. For the reasons advanced
above, it misapplied the principle in Lubaxa ,29 namely that if a prosecution should
not be commenced without the minimum of evidence to secure a conviction, then
it should cease when the evidence finally falls below that threshold, especially
‘where the prosecution has exhausted the evidence and a conv iction is no longer
possible except by self -incrimination’.30 There was no risk of self -incrimination
in this case: the State adduced evidence on all four counts, which called for an
explanation from the respondents.

[105] In Lubaxa this Court said:
‘Whether, or in what circumstances, a trial court should discharge an accused who might be
incriminated by a co -accused, is not a question that can be answered in the abstract, for the
circumstances in which the question arises are varied. While there might be cases in which it
would be unfair not to do so, one can envisage circumst ances in which to do so would
compromise the proper administration of justice. What is entailed by a fair trial must
necessarily be determined by the particular circumstances.’31


29 S v Lubaxa 2001 (4) SA 1251 (SCA); [2002] All SA 107 (A) ( Lubaxa ) para 19.
30 Lubaxa fn 29 para 19.
31 Lubaxa fn 29 para 21.
45

[106] This is such a case. The acquittal of the respondents was unfair to the
prosecution and compromised the administration of justice, in the light of the
following facts. A prima facie case was established against the respondents. The
second respondent admitt ed that she approved the deviation request because the
first and third respondents had recommended it. The third respondent suggested
that the first respondent was the source of the Worlds Window letter. The
contract, and the payments to Nulane, were not p ossible without the first, second
and third respondents working together. Likewise, the offences charged in Counts
3 and 4 could not be committed without the co -operation of the fourth, fifth,
seventh and eighth respondents. The sixth respondent suggested that the fourth
respondent knew about the award of the contract to Nulane.

[107] So, there was a real likelihood that the respondents would have
incriminated each other in the commission and furtherance of the offences, had
they been put on their defence. The High Court misapplied s 174 of the CPA: a
court should not discharge an accused who might be incriminated by a co -
accused. This was unfair to the State.32 Therefore, question 3 must also be
answered in favour of the State.

Conclusion
[108] It is unnecessary to deal with the remaining question of law by reason of
the conclusions to which we have come. For the sake of clarity, the acquittal of
Mr Mbana Peter Thabethe, the first respondent, on the charge of contravening
s 86(1) of the Public Finance Management Act 1 of 1999, specified in Count 1,
is unaffected by this judgment.


32 Jaipal fn 17 para 29.
46

[109] The High Court made numerous errors of law that resulted in the acquittal
of the respondents. This is unfortunate, particularly in a case such as this, where
it was prima facie established that scarce public funds were unlawfully extracted
from the Departm ent and channelled to the UAE, by fraud and the misuse of
power. This subverted the aims of the Project to generate income through farming
and alleviate poverty, undermines the functionality of democratic institutions, and
endangers the rule of law. The tr ial in the High Court can be summed up in a
single sentence: This was a failure of justice. Regrettably, this erodes public
confidence in the criminal justice system.33

[110] The following order is issued:
1 The application for leave to appeal is granted.
2 The questions of law reserved in questions 2, 3, 4, 5, 6 and 7 are decided
in favour of the State.
3 Questions 8 and 9 are not properly reserved for want of a factual
foundation.
4 The order of the Free State High Court dated 21 April 2023, in terms of
which :
4.1 the second respondent was acquitted on Counts 1 and 2 ;
4.2 the first and third to eighth respondents were acquitted on Count 2 ;
4.3 the fourth, fifth, seventh and eighth respondents were acquitted on
Counts 3 and 4 ; and
4.4 Mr Shadrack Cezula was not indemnified against prosecution under
s 204 of the Criminal Procedure Act 51 of 1977,
is set aside.
5 It is ordered that the respondents may be retried for the same offences in
respect of which they were acquitted by the Free State High Court on

33 Jaipal fn 17 para 29.
47

21 April 2023, as if they had not previously been arraigned, tried and
acquitted: provided that a different Judge shall preside over the trial.



_____________ __________
A SCHIPPERS
JUDGE OF APPEAL





______ ___________________
T V NORMAN
ACTING JUDGE OF APPEAL

Musi AJA (Dissenting)

[111] I have had the pleasure of reading the first judgment prepared by my
colleagues Schippers JA and Norman AJA (first judgment). I agree with most of
the reasoning and holdings in the first judgment. I, however, part ways with it
regarding its application of the common purpose doctrine in order to hold the
eighth respondent, Ms Ronica Ragavan, criminally liable.

[112] The facts have been set out in the first judgment. There are facts, not
mentioned in the first judgment, which need to be mentioned in this judgment.
The State, inter alia, called two witnesses to testify about money flows to and
48

from the different entities mentioned in the first judgment, Mr Rankuoatsana, a
senior financial investigator attached to the National Prosecuting Authority
(NPA ) and Mr Zama, a Chartered accountant.

[113] Mr Zama conceded, during cross -examination, that his conclusion, with
regard to Island Site’s books of accounts ( Island Site books), was totally wrong.
This he attributed to the limited information that was given to him by the State.
He further conceded that all the loans were reflected in the ledger accounts and
bank statements of Island Site. Additionally, he categorically stated that he could
not find anything wrong with Island Site’s books, but he had a problem with
Pragat’s. Lastly, he confirmed that nothing was ‘concealed, disguised or blurred’
by the financial statements reflecting that Island Site charged interest on the
money advanced to the companies in the focus group. This is what he said during
cross -examination:
‘Mr HELLENS : But what I want to put to you is, this reconciliation page 64.4, shows that your
calculation that there was a wrong balance of 4.88 million, was entirely incorrect, and had to
be taken the right entries in the ledger and the bank statements into account, you would not
have had that difference of 4.8.
Mr ZAMA : Correct
Mr HELLENS: Fine, so there is nothing dubious about the bank account [of Island site],
because the only thing that you said was dubious was this 4.8 discrepancy, which turns out not
to be a discrepancy.
Mr ZAMA : Ja…
Mr HELLENS: Is there anything that you query about the books of account of Island site that
makes a difference in this case?
Mr ZAMA: On my side, from Island site? Nothing, the only thing I have is on Pragat.’

[114] Mr Rankuoatsana, who testified about the money flows and not money
laundering, also conceded that all the loan and repayment transactions in Island
Site’s books were fully documented in ledgers, bank statements and financial
statements. He further accepted that there was commixtio (mixing together) in
49

Island Site’s account, since most of the entities in the focus group paid back their
loans into the Island Site account. During the period 8 November 2011 and 6 July
2012 the total movement of money was approximately R497 489 230.80. There
is therefore no proof that the money lent or advanced to the other members of the
focus group was the money from the Departm ent.

[115] Additionally, he too conceded that there was nothing ‘hidden, concealed ,
disguised or blurred’ in Island Site’s books. At the conclusion of Ms Ragavan and
Island Site’s counsel’s cross -examination the following is recorded:
‘Mr HELLENS : Okay. So, in conclusion, sir, we have a fully documented trail of the flow of
the money between these various companies. Backed by bank statements, ledgers and financial
statements, correct?
Mr RANKUOATSANA : That is correct…
Mr HELLENS : So, I want to put it to you sir, that having done our own exhaustive investigation
of our own books of account, everything in your report is totally explicable in accounting terms.
There is nothing suspicious or irregular about it. You do not differ from me, do you?
Mr RANKUOATSANA : I do not argue, since you have explained it was a loan between
companies.’

[116] Neither of these two witnesses interviewed any of the Directors of Island
Site. They also did not interview Ms Ragavan, its financial director. The picture
which they painted is clear: there was nothing untoward with Island Site’s books.

[117] The first judgment correctly states the general principles of common
purpose but fails to apply it with regard to Ms Ragavan. When its reasoning with
regard to Ms Ragavan is considered, it changed the rules of the common purpose
doctrine. It did so by failing to draw the fundamental distinction between prior -
agreement or conspiracy common purpose, express or implied and active
association common purpose. The failure to distinguish the application of the two
50

forms of common purpose led, in my view, to an incorrect conclusion, in respect
of Ms Ragavan. What are the rules of the doctrine of common purpose?

[118] In Thebus34 Moseneke J , stated that ‘ [t]he doctrine of common purpose is
a set of rules of the common law that regulates the attribution of criminal liability
to a person who undertakes jointly with another person or persons the commission
of a crime …’. The liability requirements of a joint criminal enterprise fall into
two categories. The first arises where there is a prior agreement, express or
implied, to commit a common offence. In the second category, no such prior
agreement exists or is proved. The liability arises from an active association and
participation in a common design with the requisite blameworthy state of mind.35

[119] The first judgment finds, without a factual substratum, that the State
established common purpose based on prior agreement or active association and
participation. The State did not adduce any evidence whatsoever of a prior
agreement. Specifically, the Sta te did not adduce any evidence that Ms Ragavan
was a party to any prior agreement or conspiracy. There is also no evidence on
which to infer prior agreement. It is unsurprising that the factual premises used
to make an inference of prior agreement is absent in the first judgment. An
inference can only be made if there are two or more interrelated factual premises
in support of the inference sought to be made; here there are none. The first
judgment fails to state where the prior agreement was entered into; by whom it
was entered into and why it says the Ms Ragavan was a party to the agreement or
arrangement. There is insufficient evidence to infer, from the circumstances of
this case, that Ms Ragavan was a party to any prior agreement.


34 Thebus and Another v S [2003] ZACC 12; 2003 (6) SA 505 (CC); 2003 (10) BCLR 1100 (CC); 2003 (2) SACR
319 (CC) para 18.
35 Ibid paras 18 and 19.
51

[120] She was an employee of Island Site and not a director or the controlling
mind of the company. There is no indication that she sat in any meeting with the
directors of Nulane or Pragat. In fact, it was put to Mr Rankuoatsana that she did
not know what Pragat’s activities were. He had no comment. There is no evidence
that she knew the source and origin of all the money that was generated by the
companies in the focus group. It was pertinently put to the State witnesses that
she did know about the bu siness activities of all the companies in the group and
they could not offer proof that she did. There is no indication that she sat in any
meeting with the directors of Nulane or Pragat. That being the case, prior
agreement common purpose had not been est ablished either expressly or by
inferential reasoning.

[121] The State therefore had to prove active association common purpose. The
requirements for this form of common purpose were set out in Mgedezi ,36 in
which the following, albeit in the context of murder, was said:
‘In the first place, he must have been present at the scene where the violence was being
committed. Secondly, he must have been aware of the assault on the inmates of room 12.
Thirdly, he must have intended to make common cause with those who were actually
perpetrating the assault. Fourthly, he must have manifested his sharing of a common purpose
with the perpetrators of the assault by himself performing some act of association with the
conduct of the others. Fifthly, he must have had the requisite mens rea ; so, in respect of the
killing of the deceased, he must have intended them to be killed, or he must have foreseen the
possibility of their being killed and performed his own act of association with recklessness as
to whether or not death was to ensue . In order to secure a conviction against accused No 6, in
respect of the counts on which he was charged, the State had to prove all of these prerequisites
beyond reasonable doubt.’

[122] To prove active association common purpose the State has to prove that
the accused associated themselves, not with a wide and general design, but with

36 S v Mgedezi 1989 (1) SA 687 (A) at 705I -706C.
52

a specific criminal act that the other participants committed.37 The conduct of the
individual accused should be considered.38 The State must prove that the accused
had the intention to commit the offence and that she committed an objectively
determinable act of association before or during the commission of the crime.39
Criminal liability based on active association common purpose is narrower than
pre-agreement common purpose, which is wide and general. In Dewnath , this
Court found that ‘(i) there must be a close proximity in fact between the conduct
considered to be active association and the result; and (ii) such active association
must be significant and not a limited participation removed from the actual
execut ion of the crime ’.40

[123] In Govender41 the Court found that ‘ [t]he concept of active association is
wider than that of agreement, since it is seldom possible to prove prior
agreement’.42 The converse is true: once a prior agreement is proved, all the
conspirators will be held criminally liable for the acts of the others regardless of
whether they were on the scene or not, unless there is clear evidence of
dissociation by one or more of th e conspirators. To hold someone criminally
liable for the acts of another when that person was not even at the scene is very
broad. Active association common purpose is narrower because the accused must
be on the scene and such accused’s unlawful participa tion and mens rea must be
individually assessed. The fact that it might be more difficult to prove prior
agreement common purpose is an evidentiary issue, and has nothing to do with
the scope of the two. Conceivably, it can, in some cases, depending on the

37 S V Hoctor and C R Snyman’s Criminal Law 7th ed (2019) at 229.
38 S v Le Roux (444/08) [2010] ZASCA 7 ; 2010 (2) SACR 11 (SCA) ; [2010] 3 All SA 288 (SCA) (5 March 2010)
par 17.
39 S v Khumalo 1991 (4) 310 (A) 357A -E; Jacobs and Others v S [2019] ZACC 4; 2019 (5) BCLR 562 (CC); 2019
(1) SACR 623 (CC) para 106.
40 Dewnath v S [2014] ZASCA 57 para 15.
41 Govender v S [2023] ZASCA 60; 2023 (2) SACR 137 (SCA).
42 Ibid para 12.
53

evidence, be easier to prove active association than prior agreement because the
accused must be on the scene.

[124] Furthermore, the statement in Govender is contrary to well established
precedents of this Court, including Dewnath43 and Mgedezi .44 The Constitutional
Court has cited Dewnath with approval in Makhubela v S ; Matjeke v S .45
Govender did not consider these precedents. The statement in Govender is also,
as I have illustrated above, clearly wrong.

[125] In Banda46 it was said that:
‘An accused cannot be found guilty of sharing a common purpose with other accused by a
process of osmosis.
In the absence of a prior agreement or conspiracy, the doctrine of common purpose may not be
used as a method or technique to subsume the guilt of all accused without anything more. It
cannot operate as a dragnet operation systematically to draw in all the accused. Association by
way of participation, and the mens rea of each accused involved, are necessary and essential
prerequisites.’47

[126] Ms Ragavan was not at the scene of the fraud. The first judgment could not
point to a single act of association committed by her before or during the fraud.
It uses the money flows after the fraud as an indication, without a factual basis,
that she and Is land Site were ‘aware that the advance payment was part of the
proceeds of the fraud on the Department, is buttressed by the next movement of
funds relating to the advance payment’. Crucially, the first judgment does not
state when she became aware. T ime is of the essence in active association
common purpose. All the financial transactions occurred after the fraud was
already completed. The money was paid to Island Site by Pragat and not Nulane.

43 Ibid fn 40.
44 Ibid fn 36.
45 Makhubela v S ; Matjeke v S [2017] ZACC 36; 2017 (2) SACR 665 (CC); 2017 (12) BCLR 1510 (CC) para 38.
46 S v Banda and Others 1990 (3) (SA) 466 (BG).
47 Ibid 501E -F.
54

There cannot be active association common purpose after the crime had been
completed. Criminal liability cannot be based on the ex post facto (after the fact)
ratification of another person’s unlawful conduct.48

[127] The first judgment conflates Ms Ragavan’s role with that of the directors
of Island Site. The first judgment unfortunately resorts to treating Ms Ragavan
and Island Site as an inseparable duo. They are not. Island Site, to state the
obvious, is a separate entity. She was an employee of Island Site. Mr Atul Gupta
was the controlling mind of the company. He and the other directors determined
the operations and strategy of the company. Ms Ragavan’s task, as financial
manager, was to keep proper books. She did. Neither the financial investigator
nor the chartered accountant could find anything wrong with the books. How can
it be said that she facilitated loans just because her name appears next to some
accounting transactions? It was not in dispute that she proc essed and posted
transactions in the books, as part of her job. It would be surprising if she did not
process any transactions at all. There is no evidence that she knew about the
operations of Nulane or Pragat. What they did cannot be imputed on her witho ut
there being proof of an act of deception or mens rea , in the form of intent.

[128] Ms Ragavan was not on the scene of the fraud perpetrated on the Bank of
Baroda or the South African Reserve Bank. The evidence establishes prima facie
that Nulane, Pragat and Gateway were involved in this fraud. There is no evidence
of her actively associating with those entities to defraud the two banks. She
processed loans for some of them as an employ ee of Island Site. There is no
evidence of an intent to defraud the banks. When an employee makes an
accounting entry in the books such employee does not facilitate the transaction.
The employee merely records what happened or what they were instructed to do.
It is unhelpful to state, as the first judgment does, that she was not an ordinary

48 S v Motaung 1990 (4) SA 485 (A) 520E -521C.
55

bookkeeper without setting out why a financial manager would, without more, be
liable for the criminal acts of a company. There is no evidence that she transacted
without an instruction from Mr Atul Gupta or that she did so on a frolic of her
own.

[129] There is no indication, on the facts of this case, of the remotest possibility,
not even probability, that any of the accused might incriminate Ms Ragavan.
Assuming that prima facie money laundering had been established, Island Site
was the ‘puppet master ’ and there is a probability that it might be incriminated by
the other accused. While it would not be in the interest of justice to refer
Ms Ragavan to stand trial again when there was no evidence on which she could
be convicted after the closure of the State’s case, during the first trial, the same
consideration does not apply to Island Site. Ms Ragavan was correctly discharged
at the end of the State’s case.

[130] I would have made the following order:
1 The application for leave to appeal is granted.
2 The questions of law reserved in questions 2, 3, 4, 5, 6 and 7 are decided
in favour of the State.
3 Questions 8 and 9 are not properly reserved for want of a factual
foundation.
4 The order of the Free State High Court dated 21 April 2023, in terms of
which :
4.1 the second respondent was acquitted on Counts 1 and 2 ;
4.2 the first and third to seventh respondents were acquitted on Count 2 ;
4.3 the fourth, fifth and seventh respondents were acquitted on Counts 3
and 4 ; and
4.4 Mr Shadrack Cezula was not indemnified against prosecution under
s 204 of the Criminal Procedure Act 51 of 1977,
56

is set aside.
5 It is ordered that the first to the seventh respondents may be retried for the
same offences in respect of which they were acquitted by the Free State
High Court on 21 April 2023, as if they had not previously been arraigned,
tried and acquitted: provided that a different Judge shall preside over the
trial.




__________________
C J MUSI
ACTING JUDGE OF APPEAL

57

Appearances:

For appellant: N Cassim SC with P Serunye and J Witbooi
Instructed by: Investigating Directorate NPA, Brooklyn
Director of Public Prosecutions , Bloemfontein

For first respondent: T M Ngubeni
Instructed by: Lugisani Mantsha , Johannesburg
Bokwa Attorneys Inc, Bloemfo ntein

For second respondent: T Masoetsa
Instructed by: Moroka Attorneys, Bloemfontein

For third respondent: W J Edeling SC
Instructed by: Bokwa Attorneys Inc, Bloemfontein

For fourth and fifth
respondents: B Forbay
Instructed by: Forbay Attorneys Inc, Pretoria
Motaung Attorneys, Bloemfontein

For sixth respondent: K C Oldwadge
Instructed by: Martins Weir -Smith Inc, Edenvale
Blair Attorneys, Bloemfontein

For seventh and eighth
respondents: M R Hellens SC and D J Joubert SC
Instructed by: Krause Attorneys Inc, Johannesburg
Honey Attorneys, Bloemfontein