State capture: Ajay Gupta, Atul and Rajesh. (Adrian de Kock/Netwerk24)
The National Prosecuting Authority (NPA) confirmed on Friday that it would reinstate the fraud and money-laundering charges against the eight corruption accused in the Nulane Investments trial after successfully appealing their acquittal.
“We are tirelessly working towards that,” said NPA spokesperson Mthunzi Mhaga.
On Thursday, the NPA prevailed in the supreme court of appeal (SCA), which found that Judge Nompumelelo Gusha had grossly mishandled the case and “closed her mind” to the evidence placed before her.
It said what transpired in the high court could only be summed up as a “failure of justice”.
The SCA ruling came almost two years after Gusha granted section 174 discharges to former Free State officials and associates of the fugitive Gupta brothers in a case that underpinned the unsuccessful application for their extradition to South Africa.
That decision meant that none of them had to take the stand to answer the case put forth by the state.
Gusha found that the prosecution had “regrettably failed to pass even the barest of thresholds” in proving that the accused colluded to defraud the Free State government and ensure some R24 million was funnelled to a United Arab Emirates (UAE) Standard Chartered Bank account linked to the Gupta family.
Gupta associate Iqbal Sharma was arrested in 2021, nearly a decade after Free State officials deviated from public finance rules to awarded a contract worth R24.9 million for a feasibility study to his newly-founded Nulane Investments.
It pinpointed Paras, an Indian firm linked to the Guptas, as the preferred entity to a dairy project in Vrede in the Free State. This would later become the Estina dairy farm scam in which more than R280 million allegedly flowed to the Gupta family.
But Gusha, an acting judge, found that the prosecution was unable to prove that provincial officials broke the law when they gave the contract to Nulane.
It meant that the case collapsed at the first hurdle, because without proof that the money was stolen, the state could not sustain the charge of money-laundering in relation to the rapid-fire transfers that followed to companies in the Gupta stable.
The SCA agreed with the state that Gusha made a litany of errors in law and fact, resulting in a failure of justice. She had been obliged to consider the totality of evidence, and had failed to do so.
“The inference is inescapable — and the judgment itself shows — that the judge had closed her mind to the evidence adduced by the state.
“This is unfortunate, particularly in a case such as this, where it was prima facie established that scarce public funds were unlawfully extracted from the department and channelled to the UAE, by fraud and the misuse of power.”
Hence, the appellate court said, the acquittal of the accused was unfair to the prosecution.
The prosecution had relied on the doctrine of common purpose to prove that all accused were part of a conspiracy to defraud the government, as were Atul and Rajesh Gupta.
It had planned to add them to the list of accused if they were surrendered to South Africa.
The SCA said there was evidence that three Free State officials worked together to ensure Nulane was appointed and paid and, further, that fraud and money-laudering was committed with the cooperation of the rest of the accused, among them Ronica Ragavan, the director of the Gupta family’s Islandsite Investment.
That was one of the companies in the family’s business empire through which the state allegedly the money extracted from the Free State was laundered with “bewildering rapidity”.
There was a real likelihood, the SCA said, that the accused would have incriminated each other, had they been put on the stand.
“The high court misapplied s174 of the CPA [Criminal Prosecution Act]: a court should not discharge an accused who might be incriminated by a co-accused. This was unfair to the state,” the court said.
“The trial in the high court can be summed up in a single sentence: This was a failure of justice.”
It added that regrettably this undermined public confidence in the criminal justice system.
The SCA ruling provided some comfort for the NPA a week after the Bloemfontein high court ruled that it did not have jurisdiction to try Ace Magashule’s former assistant, Moroadi Cholota, for her role in the R225 million Free State asbestos scam case.
The court found that her extradition from the United States was unlawful as the NPA had failed to challenge an SCA ruling that only the minister of justice, and not the prosecuting authority, had the power to apply for extradition, in due time.
The NPA is seeking to overturn this ruling as well.