Show must go on: Iqbal Sharma’s trial would begin regardless of the Guptas’ whereabouts, the National Prosecuting Authority said last year. Photo: Mlungusi Louw/Volksblad/Gallo Images
When former Transnet board member Iqbal Sharma was arrested a year ago, the National Prosecuting Authority (NPA) made it plain that it would not wait for the Gupta brothers’ return to South Africa to proceed with his fraud and money-laundering trial.
The prosecuting service and justice department were at the time still battling behind the scenes to secure international arrest warrants for Atul and Rajesh Gupta. But the breakthrough of their arrest in Dubai last week does not spell the end of the wait to bring them to court alongside Sharma, as they prepare to fight extradition.
The two brothers formally challenged the issue of red letter notices for their arrest by Interpol. They did not succeed but managed to stall the process for a while. It is understood that the prosecuting authority is still in the process of trying to secure red notices for the arrest of their spouses, Chetali and Arti.
The women are co-accused in the Nulane Investments case, where more than R20-million in Free State provincial funds were skimmed off a fraudulent and inflated tender, and swiftly diverted to Islandsite, the front company described as the Guptas’ main money-laundering enterprise. The charges formed the basis for the state’s call for their arrest on an international warrant.
Sharma was the first close associate of the Guptas to be arrested and he warned of delays in their return to South Africa when he pleaded for bail, saying he could not languish in prison while the brothers, their family members and business contacts resisted extradition, possibly from several corners of the world.
“This will result in a significant delay in my trial commencing,” he said at the time. “I cannot expect to be incarcerated whilst these skirmishes are ongoing.”
Sharma eventually secured bail of half a million rand. Among his co-accused are several former local government officials, as well as the fugitive brothers and their wives.
The Mail & Guardian understands that legal counsel for the Guptas, Mike Hellens, is in Dubai and was trying to secure access to his clients. Hellens has ignored approaches from the media and the circumstances of their arrest remain vague.
The justice ministry has declined to say even whether the formal extradition request has been put to the United Arab Emirates (UAE). The elective monarchy only ratified an extradition treaty with South Africa a year ago on 9 June and this will be the first high-profile extradition case between the two countries.
NPA spokesperson Mthunzi Mhaga said extradition was “a complex process” involving a range of players, including the executive, adding that the authority was assisted by a team of experts.
The applicable law in South Africa is the Extradition Act 67 of 1962. In the UAE, the process is governed by the Law on Mutual Judicial Assistance on Criminal Matters, which sets out the circumstances when extradition can be refused.
Article 9 of that law states a suspect may not be surrendered to another state if the crime is or is “correlated to a political crime”.
Given the mounting political contestation around the findings of the inquiry into state capture as Chief Justice Raymond Zondo prepares to release the final chapters of his report, the family may well attempt to persuade the Dubai appeal court that the charges against them are politically motivated.
It is on the same basis that they challenged the issuing of red alerts for their arrest. Article 15 of the law accords suspects the right to apply for bail while the state awaits a formal extradition application and authorities weigh the request.
The South African application must be submitted through diplomatic channels and stipulate the crimes allegedly committed and the place and time they were committed.
Naushina Aboo, of NM Aboo Attorneys, which has an international footprint in the UAE with Alhashmi Advocates and Legal Consultants, said because the Guptas were arrested in Dubai the process involved in extraditing them to South Africa would be “somewhat subject” to all relevant Emirati legal principles.
“They would also have recourse to, and invoke, the provisions of the UAE laws that may be applicable to them, for instance, approaching inter alia the ministry of justice to protect their interests, in an attempt to delay their return to South Africa.”
Aboo added that “in essence, one may anticipate a number of political and legal discussions to transpire between the two states, in order to arrive at a conclusion, in the interests of justice”. She said the UAE has successfully extradited suspects to South Africa in 2018.
In government circles there is relief and optimism at what is seen as almost enthusiastic cooperation in recent months from counterparts in the UAEs.
The perceived sea change is not confined to South Africa.
The UAE recently inked extradition treaties with the Netherlands and Belgium. Earlier this year the justice ministry told media it was committed to fast-tracking legislative updates to better enable it to fight money-laundering and terrorism funding activities, “as well as sharing information with our counterparts to confront cross-border financial crime”.
Dubai police have issued a statement saying they are cooperating with the South African counterparts to ensure the extradition of the pair. The Nulane case may be the start of several years in court for the Guptas on charges stemming from the rent-seeking scandal which, on the evidence of Shadow World Investigations’ Paul Holden, saw some R49-billion flow from state entities to their money-laundering entities, with the prime milking sites being Transnet, Eskom and the Free State government.
The Nulane tender paved the way for the Vrede dairy farm project, and the prosecution of the first matter is likewise a precursor to the other. Both embroil the Guptas.
The Free State government paid Nulane some R25-million, ostensibly to conduct a feasibility study for a project that would form part of its flagship Mohoma Mobung agriculture programme but it was shifted to Islandsite.
The prosecution has submitted in court that copies of Islandsite’s bank statements showed money moving between different companies in the Guptas’s Oakbay operations with “bewildering rapidity”. In an affidavit, it noted that between November 2011 and July 2012, more than half a billion rand flowed through Islandsite’s Absa bank account, including the proceeds of the Nulane deal.
Nulane had no staff, yet the department secured a deviation from procurement rules to appoint it to perform the study on the basis that it had special skills.
It then subcontracted Deloitte, at a cost of R1.5-million, to conduct the feasibility study. Nulane later changed the findings of the study to pinpoint Paras Dairy, a major Indian concern, as the most suitable implementing partner for setting up a milk processing plant in Vrede. That doomed venture eventually saw some R200-million in taxpayers’ money flow to the Guptas, according to investigators.
The Zondo commission has recommended Rajesh Gupta face corruption charges for attempting to bribe former deputy finance minister Mcebisi Jonas to agree to succeed Nhlanhla Nene and help the family secure more control of state spending.
In the run-up to their arrest, the NPA has prevailed in a court battle over freezing local assets of the family and Sharma worth R50-million.
In May, the Free State high court dismissed an application by the directors of Islandsite Investments to postpone the return date on a provisional restraint order, pending the outcome of their application for leave to appeal a high court order that the company’s business rescue practitioners, and not they, had a right to represent the company in litigation around the restraint order.
Free State Judge President Cagney Musi ruled that the directors had no standing to oppose the order without the authority of the business rescue practitioners. The interim order, which was obtained around the time of Sharma’s arrest, will remain in effect until 20 and 21 October, when the hearing for the confirmation of the order as indefinite will be heard.
The assets include Sharma’s R12-million Sandton home, his Porsche and other luxury cars and a second, sectional title property in Sandton worth R1.3-million, as well as the Guptas’ properties in Saxonwold and Constantia, valued respectively at R12-million and R22-million.
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