From employees of different banking institutions to Hawks officers and government employees — the state has lined up more than 30 witnesses in the first state capture trial, starting tomorrow.
The Nulane Investment R24.9m fraud and money laundering trial, to be heard in the high court in Bloemfontein, is related to the alleged corrupt feasibility study contract, a precursor to the controversial Estina dairy farm project.
The matter is set for trial until March 3.
State witnesses include about 10 bank employees, including from several local major banks and India’s Bank of Baroda where some of the implicated parties, including Nulane Investment, allegedly had bank accounts.
Other witnesses include two officers from the Hawks’ serious corruption unit and two investigators from the National Prosecution Authority’s Investigating Directorate.
The accused include Peter Thabethe, the former head of the Free State department of agriculture & rural development which undertook the controversial project, and Limakatso Moorosi, another former head of the department.
Thabethe and Moorosi are accused of contravening the Public Finance Management Act (PFMA) by allegedly committing the department to a contract of R24.9m without putting it out to tender.
Also among the accused are Gupta associate and former Transnet board member Iqbal Sharma; Dinesh Patel, director of Nulane Investment and Sharma’s brother-in-law; Ronica Ragavan, co-director of Gupta-owned company Islandsite Investments; and former department CFO Seipati Dhlamini. The last two face charges of fraud and money-laundering.
The department did not publicly advertise a need for a service provider to provide a due diligence report and/or undertake a study for the development of a concept document for Project Mohoma Mobung
— state indictment
The former government officials are also charged with contravention of the PFMA.
All of the accused have indicated that they will plead not guilty.
Nulane Investment had subcontracted the work to an entity known as Deloitte Consulting for R1.5m, with Patel handling the negotiations on behalf of Nulane, according to the indictment which the Sunday Times has seen.
Two Gupta brothers, Rajesh and Atul, who were arrested in Dubai in June last year, face extradition for their involvement in the matter. The indictment has indicated that the two Guptas brothers, their wives Arti and Chetali, and associate Ashu Chawla will be tried separately once they have been extradited.
Chrispin Phiri, spokesperson for the ministry of justice & correctional services, said they were waiting for information about developments in the extradition of the Gupta brothers.
“In December, the Emirati authorities asked us to align our documents to meet certain aspects of their domestic law. We now await communication from them on when the court process will begin,” Phiri said on Friday.
He said all the documents from the department’s side had been completed and submitted. The matter just needed to go through the court processes of the United Arab Emirates.
Phiri labelled the level of co-operation from the Emirati authorities as “high”.
The trial is centred on alleged procurement fraud involving R24.9m paid between November 2011 and April 2012 by the Free State department of agriculture to Nulane Investment, which is owned and controlled by Sharma.
The funds paid to Nulane, purportedly to conduct a feasibility study for the Free State’s flagship Mohoma Mobung project on the basis that Nulane had unique skills to perform the work, were then diverted to Gupta-linked entities.
According to the indictment, the state alleges that Nulane Investment was not a reputable agency and did not have the capacity to conduct the due diligence process, and so immediately outsourced the work.
The state also alleges that the supply chain management processes of the department were “undermined and not adhered to when procuring the services” of Nulane Investment.
“The department did not publicly advertise a need for a service provider to provide a due diligence report and/or undertake a study for the development of a concept document for Project Mohoma Mobung,” the indictment stated.
The state alleges the contract amount was inflated and not in accordance with acceptable government rates.
“The request, motivation and approval to deviate from the department’s normal tender processes ... was not in accordance with the department’s supply chain management policy and regulations,” the indictment said.
The state also alleges the Mohoma Mobung project was not budgeted for during the financial year 2011/2012 and that “sundry payments were used to settle the invoices of Nulane Investments”.
Meanwhile, the R280m Estina dairy farm fraud, corruption and money laundering matter, in which former mineral resources minister Mosebenzi Zwane is one of the 15 accused, will be back in the high court in Bloemfontein on Wednesday.
The matter was transferred to the court for trial last November. The list of witnesses in the case stands at 177 and includes 21 members of elite investigating unit the Hawks, and more than 30 employees of local and international banks.
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