Ajay and Atul Gupta. (Muntu Vilakazi/Gallo/City Press)
The National Prosecuting Authority said on Thursday it would appeal the high court ruling in the country’s first state capture trial which ended in acquittal for all accused, including a key associate of the Gupta family.
“The prosecution team has taken time to carefully interrogate all aspects of the judgment and the investigating director has decided to appeal the judgement,” the NPA said.
It said it had serious concerns about the ruling by acting Free State high court judge Nompumelelo Gusha, who found that the prosecution had failed to pass even the barest threshold to prove the charges against provincial officials, Iqbal Sharma, Gupta associate Ronica Ragavan and their company Islandsite Investment.
And it reiterated that the outcome illustrated the urgency of making the Investigating Directorate (ID), which was established to lead state capture cases, a permanent entity.
“Notwithstanding serious concerns with the judgment, which will be outlined in the papers and dealt with in the legal process, this case demonstrates the urgency to finalise the process to make the ID a permanent entity, with requisite criminal investigative powers and expanded partnerships, as detailed in the president’s response to the Zondo commission reports.”
President Cyril Ramaphosa gave this undertaking last year and, by raising it, the NPA appears to be blaming poor police work, at least in part, for what transpired in court.
Gusha however was scathing in her criticism of both the investigation and the prosecution.
The state stumbled at the first hurdle when it was unable to prove that Free State officials broke the law and illicitly awarded a contract worth R24.9 million for a feasibility study to Sharma’s newly founded Nulane Investments.
Without proof that the money was stolen, it was then hard-pressed to sustain the charge of money laundering in relation to the myriad transfers that followed between companies in the Gupta brothers’ business empire.
But lawyers familiar with the case have asked why the defence could not meaningfully adduce evidence from Bank of Baroda records at its disposal, in which Sharma justified a transfer to the Emirati bank account of Gateway as payment for the same feasibility study that he had subcontracted in South Africa to Deloitte, at a fraction of the cost.
The state’s original indictment stressed that Sharma made a material misrepresentation to the bank, and the South African Reserve Bank, about the reason for the transfer of R19 million because there was “no legitimate business transaction” that merited the payment.
The charges in the Nulane indictment were the foundation for South Africa’s request to the United Arab Emirates to extradite Atul and Rajesh Gupta. The request was denied by a Dubai court in mid-February.
The NPA said it was deeply concerned at this outcome because it had done “everything in line with the UAE treaty requirements” to secure the fugitive brothers’ surrender.
“While this judgment is a setback, the ID remains focused and committed to ensuring that justice prevails for state capture and other serious corruption within its mandate, and that those most responsible are held to account and deprived of their ill-gotten gains,” ID head Andrea Johnson said.
“This is a fight for the future of our country, which we will not give up on, but it won’t be a quick or easy win.”
Last week, Free State high court acting judge Rudie Cronje interdicted the transfer of the Guptas’ R22 million mansion in Constantia to new owners, pending the hearing of an application by Islandsite to have the sale set aside.
The house was subject to a provisional restraint order freezing a wealth of assets belonging to the family and Sharma, including his two Sandton properties and sports cars, which the NPA obtained after charging the Nulane accused.
Islandsite had earlier been placed under business rescue but after obtaining the freezing order, the NPA appointed a curator to manage the assets.
Ragavan, along with Islandsite, approached the court after learning in January that the property, which is apparently dilapidated, was to be sold at a price below the market rate.
She argued that the curator should at least wait until ruling had been handed down in the Nulane trial, because acquittal would vitiate the provisional restraint order and the appointment of the curator.
Cronje said the curator must have anticipated that if the accused were acquitted, that would mean the end of his mandate.