How money 'stolen' from Transnet made its way into Zuma lawyers' accounts

Jacob Zuma’s former lawyers received millions of rands from a Gupta-linked company fuelled by money allegedly stolen from Transnet.

Documents submitted to the Zondo commission of inquiry into state capture show the trust accounts of the firms of Michael Hulley and Asif Latib, the former president’s instructing attorneys during his battle with the Scorpions, received a total of R7.2m in April 2014.

The money came from Bapu Trading CC — a company that appears to have done no business, had no VAT number, and had as its address a tiny business centre in Erasmia, west of Pretoria.

Bapu received all its income — R327m —  from a letterbox company called Homix,  the company to which Gupta associate Salim Essa allegedly directed R660m of the money the  National Prosecuting Authority (NPA) says he corruptly received for introducing finance company Regiments Capital to global consultancy firm McKinsey, which did work for Transnet.

The Regiments connection

Regiments scored R1.6bn in fees from Transnet and one of its pension funds.

While the existence of Bapu as a recipient of money syphoned from state-owned entities (SOEs) has been previously reported, what happened to the money once it left its accounts has not been explained until now.

Essa has remained silent since the spotlight fell on his involvement in state capture when the #GuptaLeaks e-mail disclosures broke in 2017.

But this week, through his lawyer, he insisted he had “no dealings” with Homix or Bapu “and has no knowledge of either the company directors or shareholders”.

However, in an affidavit filed in November last year, the head of the  NPA’s Investigating Directorate, Hermione Cronje,  said Essa set up Regiments as the local partner of  McKinsey in return for 30% of all fees Regiments earned from its Transnet contracts. Essa’s cut was later increased in 55% in what Cronje described as the bedrock of a corruption and money-laundering scheme.

Meanwhile, bank statements provided to the Zondo commission by Standard Bank’s former general counsel, Ian Sinton, and the South African Reserve Bank’s financial surveillance department head, Shiwa Mazibuko, give details of Bapu’s transactions.

Sinton’s documents show Bapu paid R4.4m into Hulley & Associates’ trust account on April 9 2014. A day later, it paid R2.8m to the now-defunct Durban law firm Latib Abbas.

 The documents give no reasons for the payments, but weeks earlier Zuma had been preparing a report for parliament to defend himself against former public protector Thuli Madonsela’s report on the R250m security upgrades to his Nkandla homestead.

The lawyers were not alone in receiving money from Bapu, however. Other beneficiaries include:

• Osmany Optical in Johannesburg, owned by Shamera Osman, who according to officials behind state-capture investigations is a relative of Essa. Osman, who received R90,000, read WhatsApp messages seeking comment  last week, but did not respond;
• Car dealerships selling Porsches, Land Rovers and Mercedes-Benzes, which together received R1.85m;
• A former University of KwaZulu-Natal academic who received R775,000, and a prominent Johannesburg marketer who received R106,344. Both of their names are known to the Sunday Times;
• Sandton gold dealer ISA Gold, which was paid R847,000;
• Fruit and vegetable exporters and food wholesalers, including Yarona Cash & Carry (R4.5m), DH Brothers Industries (R6.34m),  Devland Cash &  Carry (R2m) and Komodo Wholesalers (R7.9m);   and
• FGC Commodities, which received R183.4m.

 FGC director Mahashveran Govender could not be reached for comment and his listed numbers no longer exist. Despite saying he would respond to questions, Devland Cash &  Carry’s marketing manager, Abdullah Vaid, failed to do so. Komodo Wholesalers could  not be reached for comment despite numerous attempts.

Mazibuko testified that an analysis of Bapu’s bank account showed that most of the money it received from Homix went to Komodo Wholesalers and FGC Commodities. Komodo, he said, was under investigation by his department for suspicious foreign exchange purchases.

Asked if he received the money to cover Zuma’s legal fees, Hulley said this week: “Most certainly not. You’d recall at this stage former president Jacob Zuma was being fully funded by the state.”

 Hulley also said: “[Hulley & Associates], its directors and employees have had no interaction with any members of the Gupta family in respect of any transaction past or present.”

Former Latib Abbas director, Hassan Abbas, said Latib had dealt “with that particular matter”. Latib said: “Without being disrespectful I will not be commenting. This is not something for discussion in the public. I will deal with it in the [Zondo] inquiry.”

Yarona FD Ashruf Chotia said the company “did not stand for state capture” and denied doing any business with Bapu. He said the money was deposited into the company’s account but was returned after it   could not source goods for a client.

“The money was paid through an agent. We paid it back,” he said.

DH Brothers chief commercial officer Shoaib Moosa confirmed receiving the money. “We had no direct dealings with Bapu and this is the first we have heard of them. The amounts credited to our bank account were not considered large or suspicious by us to report to any authority,” he said, adding that the company often receives payments from third parties.

“These customers, generally wholesalers, sell to their own customers and on occasion ask these customers of theirs to make payment directly to us,” he said.

ISA Gold’s lawyer, Zoe Banchetti, said  the company  knew nothing of Bapu and “had no dealings with this entity”.

She said the beneficiary description on ISA Gold’s bank statements differed from Bapu’s, but  it  did receive R847,000 from a customer, which she said was “properly Fica’d and Krugerrands were collected by an authorised person”.  (Fica is the acronym for the Financial Intelligence Centre Act.)

“Our client had no reason to suspect that the transaction was in any way suspicious or unusual,” Banchetti said.

Asked about the accuracy of the transaction records, Standard Bank spokesperson Ross Linstrom said: “We are comfortable that the submissions Standard Bank made to the commission accurately reflect transactions that were processed.”

In his affidavit, Mazibuko said Homix  “on numerous occasions issued invoices for services it had not rendered” and was a “money-laundering scheme”. The bulk of Homix’s funds, he said, came from SOEs, including Transnet.

E-mails from the #TrillianLeaks, which the Sunday Times obtained and have reported on since December, suggest that Ashok Narayan, former Free State premier Ace Magashule’s adviser, was handling all of Homix’s communications.

One, sent to Trillian boss Eric Wood by a staffer, reads: “Please be so kind and confirm with Ashok into which account or company should we process the rest of April invoices that still need to be paid as we now only have the invoices from Homix and we want to avoid confusion.”

Entities with much in common

Business registration documents show that Bapu’s sole director was Chetan Patel, who shares multiple addresses with current and former directors of Homix, Bapu and Chivita, another company established to receive Essa’s allegedly ill-gotten gains. All are situated in Erasmia,  within 2km of each other.

At Patel’s listed residential address, a domestic worker said she did not know him.

At the address of former Homix director Tafique Hasware, his former landlady, Sameena Kazi, described him as “friendly”.

“He used to rent a back room, but not any more. His mattress and cupboard are still here. He left here late last year. I don’t know where he went,” she said. “He had some strange friends who my husband didn’t like. They would meet him in a red car under a tree outside at night at least twice a week.”

Essa’s lawyer, Nigel Little, said: “Your inquiries are predicated on implied allegations that our client is somehow ‘involved in’, ‘linked to’ or ‘controlled’ companies Homix and Bapu Trading CC.  A simple search of the Companies and Intellectual Property Commission records  would show that our client is not, nor has been, ‘involved’ with these companies.  Moreover, we are instructed that our client has had no dealings with these companies and has no knowledge of either the company directors or shareholders.

“Your implied allegations are devoid of truth, have no actual evidence to support them and are defamatory.  We caution you that publishing such unsubstantiated and defamatory allegations would, in the circumstances, be reckless; especially so in the face of our client’s denial and when you could, on a proper investigation, establish  that no facts support the  allegations.”

Joburg mansion for a wanted woman

Bapu paid a R6m deposit on a R28m Johannesburg mansion for a Nigerian woman who allegedly stole more than R2bn from that country’s workers’ compensation fund.

The R6m deposit on Ngozi Juliet Olejeme’s Sandhurst house was paid in three tranches over two days in June 2015 into the trust account of Sandton law firm Werksmans Attorneys.

Under the Financial Intelligence Centre Act (Fica), businesses must declare any suspicious financial transactions to the Financial Intelligence Centre. Failing to do so can incur penalties of 15 years’ imprisonment or a R10m fine.

David Hertz, chair of Werksmans Attorneys, which is helping rail agency Prasa in multiple legal fights against allegedly corruptly awarded tenders, said the money was for a deposit on the Sandhurst house in exclusive Coronation Street. Deeds searches confirm Olejeme bought the house.

Hertz said: “We represented the seller. Our client and the purchaser were properly vetted in accordance with Fica. No concerns were apparent from the Fica documentation received and, as such, no reporting obligations arose.

“The purchaser was represented by her own attorneys. Neither the seller, nor the purchaser, on the face of it, appear linked to Bapu in any way and all deposits received, according to our bank statements, came directly from the purchaser and not Bapu.”

Hertz said all bank statements illustrating the deposits were submitted to the Zondo commission. A source with knowledge of the sale said Olejeme’s estate agent and lawyers were obliged to conduct the Fica checks, which the seller’s lawyers were not obliged to do.

A statement from Nigeria’s Economic and Financial Crimes Commission said that Olejeme and a colleague were “wanted in a case of criminal conspiracy, abuse of office, diversion of public funds and money laundering” for  “diverting well over” R2.8bn from the Nigerian Social Insurance Trust Fund into their “personal accounts through the award of suspicious and bogus contracts to proxy companies”.

Olejeme was the chair of the trust at the time and was arrested in 2017.

 The 4,837m² Sandhurst property was auctioned off in 2018.

Aside from Hulley & Associates, Latib Abbas and Werksmans, money from Bapu also made its way into other law firms’ trust accounts.

These include Cliffe Dekker Hofmeyr (CDH) (R1m); Rosebank firm Saley Laher & Hoosen (SLH) (R1.9m), and Tonkin Clacey (TC) (R220,280).

CDH chief executive Brent Williams said they never represented Bapu, and the money paid into their trust account was for a property sale.

“We acted on behalf of Retail Traders Finance, an entity within the Mia Group of Companies, which has been a client for many years.

“All the relevant Fica formalities were attended to. On the available facts, there would not have been any reason to make any report to the FIC in relation to the payment.”

SLH’s Nazeer Saley said the Zondo commission had summonsed them “in regards to this matter. My office was not party to any wrongdoing. I have furnished the commission with all relevant supporting documentation pertaining to the transaction.”

Attorney Brian Khan, who represents TC at the Zondo commission, declined to comment, saying: “To publicise at this stage may compromise the commission in the execution of its mandate.”