Although the fugitive Gupta family’s fingerprints are all over the state capture project, they have been directly implicated in only two criminal cases brought before court so far. The charges informed the bid to secure their extradition, which has become a mirage.
Both cases ended in the discharge of the accused and in both instances the prosecution’s defeat is due in part to its difficulty in making use of the Gupta leaks emails as evidence material.
The trove provides the names of many of those within the administration who enabled and partook in the looting, and indicates the flow of funds — through instructions and invoices — that helps to establish a case of fraud and money-laundering.
They are “probably critical to all state capture cases”, a well-placed source said this week.
But it became apparent already in the public hearings of the Zondo commission that those implicated in state capture would challenge the admissibility of the information at every turn.
The Nulane and Estina cases deal with different phases of the same scam and make for a classic and crude example of state capture.
A fraudulent feasibility study pinpointed Indian milk producer Paras as a strategic partner for a project that was not in the Free State government’s plans or budget. The partnership itself with Paras would remain a fiction.
Yet the government over four years paid R280 million to a front company created by the Guptas and their associates “to extract funds from the public fiscus”, as the indictment puts it, continuing even after the national treasury ordered that the contract be cancelled.
From Estina’s account, the money rapidly flowed offshore, much of it to Bank of Baroda accounts and R169 million to Gateway Limited, another Gupta vehicle.
It was then moved into shelf companies and finally back to South Africa where some of it allegedly paid for Vega Gupta’s wedding at Sun City in 2013.
The facts are familiar partly because the dairy project failed in plain sight and the wedding involved the infamous Waterkloof jet landing that blew the whistle on the family’s relationship with the Jacob Zuma administration.
The Bloemfontein high court on 7 August struck the corruption, fraud and money-laundering case against the 16 accused in the Estina case off the roll for unreasonable delay.
Central to the defence’s successful section 324(a) application for the discharge of their clients — among them former cabinet minister and provincial MEC for agriculture Mosebenzi Zwane — was the argument that they were not able to prepare for trial because they could not access the evidence from the Gupta leaks emails the prosecution intended to lead.
The evidence was contained in forensic copies availed to the defence from late June to early July — about a month before the trial was due to start on 5 August.
An opposing affidavit deposed to by a police colonel working with the Investigating Directorate (ID) countered that the delay was reasonable and did not affect the accused’s fair trial rights.
Colonel Yolanda Gair said it arose because of the complexity of obtaining admissible electronic copies of the emails from the original hard drive that was entrusted to the Zondo commission six years ago.
To guard against the risk of it being compromised or destroyed, the location of the server remains “a closely guarded secret”, a senior justice department official said.
The commission’s archive holds a copy that was forensically mirrored in Europe, and can serve as a source of authenticated copies for court proceedings. The secretariat of the commission said every care was taken to ensure it could not only be used in the inquiry chaired by former chief justice Raymond Zondo but could underpin the criminal investigations and prosecutions he urged.
However, the state was adamant that it could not obtain what it needed and embarked on a search for what it described as the original HDD hard drive that took it to The Hague, though this is not the home of the device found in a workshop that passed from a whistleblower to human rights lawyer Brian Currin to the commission.
“The state engaged with the commission in terms of section 71 to obtain the HDD drive. Only hard copies were obtained necessitating that a further process be undertaken,” Gair wrote.
This meant, she added, seeking mutual assistance from the government of the Netherlands to get a version that could stand up in court.
“For purposes of obtaining the HDD drive, the state embarked on [a] mutual legal assistance with the process with the Netherlands counterparts following which the HDD drive was obtained on 1 March 2024.”
The expert enlisted to make and authenticate the forensic copies fell ill, which meant the state had to hire a second expert to complete the work.
Krause Attorneys told the court that when it received the material, parts were readable but others not. It faulted the state for not providing the defence with software that would allow the accused full access to the data.
The state countered that this was not fair because the defence had been warned a year earlier that it would receive electronic data as part of the disclosure.
But once the complaint arose, state prosecutor Peter Serunye wrote to the attorneys and offered to provide the necessary software, at the state’s expense.
“In our endeavour to ensure that there are no unnecessary delays in the trial commencing as scheduled… we have engaged our service providers to download the necessary software in a CD to enable you to access contents of ‘2 Evidence Item’.”
The hard drives were returned to the defence with a “readable, searchable copy of the data”. The delay was therefore not blameworthy, and the defence attorneys were striving to embellish it for effect to plead for discharge, Gair submitted in the affidavit.
“The case against the accused is very complex. It is the type of case requiring the testimony of experts, forensic accountants, computer experts and handwriting experts,” she wrote.
“I must also reiterate that the information was always not in the possession of the state and arrangements with the Netherlands counterparts needed to be arranged, including travelling to obtain the HDD drive.”
Itumeleng Mosala, the head of the secretariat residual mechanism in the justice department, told the Mail & Guardian this was not necessary as the information was available within the Zondo archive — and had been for two and a half years — and would have sufficed for the purpose of making forensic copies to present to the court.
“What they did not want to accept is that the original is not sitting in the Zondo commission archive of data. When we went to receive it, the experts said it would be ill-advised for us to take and make copies on our own here given the vulnerability of it,” Mosala said.
“We have kept highly authenticated copies in the commission. The chain of custody was protected. Their decision to go to Holland to look at whatever copy is there is really a choice they made, they did not have to go there.”
Mosala said the accusation that the commission was denying the NPA access to vital information was false, adding that he had personally released the files the prosecution eventually accepted.
“That is absolutely untrue. They kind of believe that we are hiding it somewhere. What we gave them in July is all the information that we have always had,” he said.
“We are able to say to any court that this is the exact copy of the original, with all of the affidavits that were needed to support its originality and its ability to be used in court. They should have used it.”
It points not only to a lack of trust but, sources with close knowledge of state capture investigations say, ineptitude in the prosecution of complex financial crimes.
The latter is one of the reasons for South Africa’s grey-listing by the Financial Action Task Force in January last year — a charge that has spurred the National Prosecuting Authority (NPA) to enlist forensic experts from the private sector to assist the ID with the processing of digital data.
The NPA’s deputy director for strategy, operations and compliance, Anton du Plesssis, this week said that the implementation of the initiative was proceeding but declined to comment on its status in relation to specific ID cases.
In the high court, the state stressed that it had already in January last year provided defence counsel with hard copies of the annexures from the Gupta leaks on which it would rely.
Therefore, Terry Motau SC, the lead counsel for the state, said the prosecution and the defence were on an equal footing.
But Judge Celeste Reinders held that the delay was unreasonable and that the matter could only be placed back on the roll once the national director of public prosecutions had given written certification that it was trial-ready.
She did not provide a written copy of her ruling, and the NPA has asked for a transcription to study, with a view to seeking re-enrollment.
The NPA is similarly trying to keep alive the Nulane case after the same high court granted section 174 discharges to seven suspects last April.
It is awaiting a date for oral argument in the supreme court of appeal after pleading in papers that acting judge Nompumelelo Gusha in failing to set out factual reasons for her decision — both when she granted the discharge and later when she denied the state leave to appeal — breached not only the Criminal Procedure Act but the judicial code of conduct.
Gusha said the prosecution did not pass the barest evidentiary threshold to prove the charges against provincial officials, Iqbal Sharma, Gupta associate Ronica Ragavan and their company Islandsite Investment.
The prosecution relied on the doctrine of common purpose to prove that the accused, along with Atul and Rajesh Gupta, conspired to defraud the Free State government of R24 million, the sum paid to Sharma’s newly established Nulane Investments for the feasibility study that paved the way for the Vrede project.
It alleged that through their actions, the brothers and their business partners associated themselves with the contents of an unsolicited letter from Worlds Window which initiated the fraud — with the collusion of pliant Free State officials and with the common aim of furthering the family’s financial interests.
But the state stumbled early when it could not prove that Free State officials broke the law and illicitly awarded the contract to Nulane.
Without proof that the money was stolen, it would struggle to sustain the charge of money-laundering in relation to the myriad rapid-fire transfers that followed between companies in the Gupta brothers’ business empire.
A lawyer familiar with the case has said it was possible to prove common purpose, but it required placing better evidence before court. The answer lay in having both the bank records and relevant emails in the Gupta leaks cache admitted as evidence.
“How are you going to prove the connections? You need the Gupta leaks [emails] and you need the bank statements. The bank statements corroborate the Gupta leaks emails.”
Serunye, who was also the prosecutor in this case, abandoned initial plans to introduce the emails as evidence when he faced objections from the defence.
This was despite the NPA being in possession of a legal opinion drafted by two of the country’s most respected advocates, Wim Trengove and Geoff Budlender. They argued that leading evidence from the Gupta leaks was possible and set out the applicable legal precedent.
It is understood that private counsel assisting Serunye in terms of section 38 of the NPA Act had also argued in favour of introducing the evidence.
The reluctance not only to deploy private counsel but to follow their advice, to compensate for a lack of experience plus a skill exodus driven by political meddling in the NPA, has proved a recurring theme in state capture cases.
The to and fro over evidence for the Estina trial fuelled tension between the department and the prosecuting authority over what national director of public prosecutions Shamila Batohi termed the NPA’s unmet demand for “unhindered” access to the Zondo archive.
The issue was ventilated in a recent briefing to parliament’s portfolio committee on justice, where she said though it had been lingering for years, the NPA had hoped to resolve it “within the family”.
Justice department officials said the NPA has for some time had login details to the archive. Doc Mashabane, the director general of justice, told the committee that he had asked Batohi for a list of cases where the entity had struggled. Six were flagged, and each instance the issue was swiftly ironed out.
If the department denies gate-keeping, it insists that it must remain the custodian of the archive to ensure that it is equally accessible to all investigating bodies, including the Financial Intelligence Centre and the Directorate for Priority Crimes Investigation.
“We cannot simply hand over the custodianship of the archive to NPA,” Mashabane said.
The NPA and the department have for some time been debating how to keep alive the slim hope of securing the surrender of the Gupta brothers after an extradition application was rejected by a Dubai court in February 2023.
Former justice minister Ronald Lamola kept pushing the point with his Emirati counterparts and was advised that South Africa should file a fresh application. The NPA was, somewhat understandably, reluctant to do so until it had been provided with clarity on the court’s reasons.
The UAE’s bona fides in urging another application is in doubt. Lamola bluntly said so in one of his meetings with his counterpart while still in the justice portfolio.
Mashabane said the UAE government has thrice repeated this advice, the last time being this month on the sidelines of a Brics countries (Brazil, Russia, India, China and South Africa) meeting.
As much as Pretoria feels it has repeatedly been led by the nose by the UAE, the NPA’s stance means that at the moment there is no live request for the Guptas’ extradition.
Mashabane said it was apparent in the recent meeting with Emirati officials that the UAE was not about to provide the answer the prosecuting authority had sought as a precondition for putting through a new application.
“They made it clear that the ball is in our court. I think the sensible thing to do would be to file the extradition request.”
And if hope has not died quite yet, either for the department or the prosecuting authority, it is because both believe that despite having obtained citizenship of the Pacific island of Vanuatu, the Guptas remain largely resident in Dubai.
The reluctance not only to deploy private counsel but to follow their advice has proved a recurring theme in state capture cases
