National director of public prosecutions Shamila Batohi. (Photo by Gallo Images / Netwerk24 / Felix Dlangamandla)
The R420 million fraud and corruption trial of medical doctor Mahendren Munsamy for allegedly swindling First National Bank and Sasol has stalled over appeals to National Prosecuting Authority (NPA) head Shamila Batohi to drop the charges.
Munsamy — as well as Gas 2 Liquids and Lavela Petroleum, which are entities controlled by him, according to the state — appeared alongside former FNB employee Paragasen Reddy, Munsamy’s alleged employee Tania Wiener, Siviwe Mkhululi Mafanya and Sibusiso Romeo Khumalo on charges of racketeering, fraud and corruption.
Munsamy and Wiener are also implicated in a separate case of fraud, theft, money laundering, possession or use of proceeds of unlawful activities and assisting another to benefit from the proceeds of unlawful activities.
The two are accused of defrauding businessman Ravesh Moodley of about R7 million. Moodley opened a case against Munsamy and Wiener, claiming he was duped into investing in an allegedly bogus petroleum venture to purchase 700 000 litres of fuel.
The charges are related to the combined R420 million in “fraudulent guarantees” that Munsamy’s firms allegedly received from FNB to buy fuel from Sasol, which the state claims did not receive payment for the purchases.
Munsamy purportedly doled out nearly R2 million in bribes to Reddy, who is accused of issuing the “fraudulent guarantees” between January and May 2011.
In the Johannesburg high court on Monday, the prosecutor, advocate Steven Rubin, told acting judge William Karam that Reddy, who is the first accused, made representations to the NPA to have charges against him dropped but was unsuccessful.
“Accused one was not happy with that decision … and has decided to appeal to the national director of public prosecutions (Batohi),” Rubin told the court, asking for a postponement to 13 March.
Asked by the judge why it had to take more than a month to make a decision, Rubin said there was a long process before representations reached Batohi, as they first had to go through several people, including the co-ordinator in the NPA head’s office, as well as the authority’s head of organised crime.
“My lord, the difficulty is the protocol of getting to the [NPA head] is not that straightforward. The arrangement that we have is that the correspondence will be sent to me today (Monday), I will send that correspondence [to the coordinator]. We’ll certainly be finished on 13 March,” Rubin said.
Reddy’s legal counsel advocate Marius Steenkamp said the case against his client was a “voluminous and quite technical matter” but assured the judge that he would send the correspondence to the state expeditiously.
Piet du Plessis, who is Munsamy and Wiener’s legal representative, raised concerns that his client was the only one of the accused not out on bail, adding that his client wanted “to move forward with the matter”.
“By the 13th of March these [representations] processes must have run,” Du Plessis said.
He added, however, that he would not be representing Munsamy and Wiener when the trial starts, and that attorneys from Pietermaritzburg, in KwaZulu-Natal, would be their lawyers.
The judge ruled that Du Plessis should ensure that, by 13 March, the Pietermaritzburg attorneys had read and familiarised themselves with the docket, as well as consulted their clients in time for the pretrial conference.
A pretrial conference, among other things, seeks to iron out legal issues that are in dispute, estimate how long the expected trial will run, as well as set the start date for the trial.
Medical doctor Mahendren Munsamy, accused of defrauding First National Bank and Sasol of R420 million through a cross-border petroleum syndicate, is fighting for bail in a separate R7 million fraud case
“[The] matter is postponed for the purposes of a pretrial to 13 March 2023. The court expects counsel to be appointed by [Munsamy and Wiener] should be prepared for [the pretrial]. Accused two (Munsamy) is to remain in custody, and the rest, your bail is extended to that date,” Karam ruled.
This case has embroiled FNB and Sasol in a tense legal battle, with the latter seeking compensation from FNB for issuing guarantees for fuel the chemicals giant allegedly did not receive payment for. FNB insists it should not pay Sasol.
The details of the fractious legal battle are contained in an affidavit filed by Malini Mudaly, the head of legal in FNB’s premium division, and forms part of the state’s case against the accused.
Court filings show that Munsamy is a director of GTL Direct, which is based in Mauritius and took in the proceeds of the fuel sales. During the first half of 2011, Munsamy’s company, Lavela, received R310 million in FNB guarantees to buy fuel from Sasol.
Lavela was then meant to supply the fuel to “another entity controlled by Dr Munsamy” called Gas 2 Liquids, reads Mudaly’s statement.
Gas 2 Liquids sold fuel to chemicals giant Chevron, which could not pay an amount owed to its supplier in June 2011, whereafter Gas 2 Liquid decided to offset its debt by buying fuel from Chevron and “exporting” it to Mozambique.
“Through this transaction, Dr Munsamy diverted a large payment that should ultimately have gone to Sasol. The volume of fuel shipped to Mozambique was 17.5 million litres and the [value involved] was some R190 million,” reads the affidavit.
It added that a further R110 million in “fraudulent guarantees” were given by FNB in April 2011 to a company called Imvuselelo Petroleum and Gas, which also supplied Gas 2 Liquids, bringing the total to R420 million.
However, Mudaly insisted that the financial company did not owe Sasol, stating: “Sasol then claimed from the bank on the strength of the guarantees and the bank resists payment on the basis that the guarantees are fraudulent.”
Mudaly added that Reddy “conceded” during a labour hearing that he forged the signature of Pule Mahlangu, his bank colleague, to fool the financial company into believing that Mahlangu had also authorised the payments.
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