The National Prosecuting Authority (NPA) this week made a final bid to salvage the first state capture case to go to trial.
It argued in the Bloemfontein high court that despite key #GuptaLeaks evidence being ruled inadmissible in the R24.9m Nulane tender scandal, it could still show a clear case of fraud against the accused.
The state is opposing applications by five of the six accused to have charges against them dismissed on the grounds that the state has not presented sufficient evidence to warrant the trial continuing.
The accused are Peter Thabethe, former head of the Free State department of rural development; Limakatso Moorosi, former head of the Free State department of agriculture; Seipati Dhlamini, former provincial agriculture CFO; Gupta-associate Iqbal Sharma; his brother-in-law Dinesh Patel; and Islandsite director Ronica Ragavan. Nulane Investments and Islandsite, a Gupta company, are indicted as entities.
Only Moorosi has not applied for a discharge. She has however closed her case and indicated that should she be acquitted she plans to sue for malicious prosecution.
But the NPA says the evidence before court points to a fraudulent deal in which the state paid nearly R25m for a 70-page feasibility study report.
Despite suffering a major setback last month when most of disputed documentary evidence was ruled inadmissible, state prosecutor Peter Serunye argued that the state had presented a prima facie case against all the accused.
Serenye said Thabethe, Dhlamini, Sharma and Patel were at the centre of the feasibility study contract.
He said it was clear that Nulane Investments did not have the capacity to conduct the feasibility study, hence it had hired Deloitte for R1.5m to do the job while it “overcharged the state”.
“That’s fraud. That’s the most expensive report,” Serunye told the court.
He also argued that although there was no documentary evidence showing that the various provincial officials knew Sharma, circumstantial evidence indicated that they must have.
“Why did they give him a R24.9m tender?” asked Serunye, adding that the awarding of the contract, including the drafting of a deviation letter, pointed to the accused and state witness Shadrack Cezula acting with common purpose in committing fraud.
The court has heard that Cezula drafted the deviation letter “under duress” to facilitate quick payment of Nulane without complying with proper supply chain processes.
Serunye said Sharma had, on his own admission, communicated with Deloitte personnel about the contract between the audit firm and Nulane.
E-mail communications between him and Deloitte corroborated this, showing his “involvement in the fraud”.
The prosecutor told the court the state had conceded that a charge of contravening the Public Finance Management Act (PFMA) against Thabethe should be dropped, but he still needed to be held liable for fraud for his role in the awarding of the tender.
That’s fraud. That’s the most expensive report
— Prosecutor Peter Serunye
Serunye argued that the three former senior Free State officials could not place the blame on Cezula alone for the deviation letter, because they had signed off on it.
“They [Thabethe, Moorosi and Dhlamini] read the deviation and saw the supporting letter.
They should have said: ‘This doesn’t comply with the law.’”
Earlier, advocate Mike Hellens, for Ragavan and Islandsite, r told the court there was no evidence his clients were involved in any misrepresentation aimed at prejudicing anyone, and therefore they could not be charged with fraud.
Hellens said even if fraud was proven in the broader case, his clients had nothing to do with it.
“Whatever occurred, there’s no connection to [Ragavan] and [Islandsite]... Mr Cezula gave evidence that he made an error of judgment, he didn’t make misrepresentations or representations to anyone,” he said.
On the money laundering charges, Hellens told the court that the state’s witnesses, including Thesele Rankuoatsane, a senior financial investigator in the Investigating Directorate, had conceded during cross-examination that Islandsite has operated as a banker to a group of related companies.
Representing Sharma, Bronwynne Forbay said the state had throughout the case been referring to Sharma as a “Gupta associate” but could not produce any evidence to demonstrate the relationship.
Daniel Mantsha, for Thabethe, criticised the state for conceding that Thabethe should be acquitted on the count of contravening the PFMA only after the discharge application was lodged.
Kenny Oldwage, representing Patel, said the state had failed to properly apply its mind when pursuing the case against his client; there was no evidence that fraud had been committed. “The state’s case is dead, and the funeral procession [is under way].”
Acting judge Nompumelelo Gusha reserved judgment to April 21.
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