Oliver Hill, on South Africa’s most wanted list, faces possible extradition from Britain, reports Mungo Soggot
A LANDMARK extradition case in London will decide next week whether one of South Africa’s most wanted fugitives will be returned home to face fraud charges of more than R100-million.
Oliver Hill has eluded the South African Reserve Bank since 1987 when he fled to London to evade charges which, if proved, would make him the undisputed king of financial rand “roundtripping”.
But his luxurious exile at 1 Belgravia Place, Westminster, was shattered in June this year when the British authorities arrested him on the basis of his South African fraud charges and incarcerated him in Brixton Prison. Hill’s extradition hearing at the Bow Street Magistrate’s Court, which drew to a close at the time of going to press, is the first since South Africa’s return to the Commonwealth. This means Hill could be the first South African extradited from Britain since 1961.
His return would give the Reserve Bank the chance to prosecute the country’s most ambitious white-collar criminal case to date: the bank alleges Hill swindled millions by fraudulently manipulating the dual currency system with forged Eskom bond certificates.
The British court’s decision to extradite Hill will depend largely on whether it finds Britain’s Extradition Act can be used against people accused of crimes committed in their home countries when no extradition agreement existed. In South Africa’s case, such an agreement was reinstituted on its return to the Commonwealth this year.
Hill has spent fortunes on South Africa’s and Britain’s finest lawyers. His latest heavyweight legal team is headed by Alun Jones QC who successfully defended the sons of Robert Maxwell against massive fraud charges. This week Jones argued against the retrospectivity of the Act.
The Reserve Bank’s team, headed by Michael Birnbaum QC, says failure to apply the Act retrospectively would make a mockery of any extradition agreement: Hill and others would be permanently immune from criminal justice if their offences were committed before such an agreement was concluded.
Hill’s longtime Johannesburg lawyer Oshy Tugendhaft – a senior partner at Johannesburg law firm Moss Morris – told the Mail & Guardian this week that Hill’s team had also argued the alleged fraud charges in fact related to exchange control regulations, the breach of which was not an extraditable offence.
The other side countered that to perpetrate the alleged scam the Eskom documentation used by Hill was counterfeit and that the accusations against him therefore related to fraud and forgery.
Tugendhaft said Judge Bartle had indicated he would reserve judgment until next week. He said the proceedings had not touched on allegations that Hill has travelled on a forged British passport. The suggestion, denied by Hill, arose during an unsuccessful bail application, he said.
The Reserve Bank originally got wind of Hill’s ingenious money-making scheme in 1986 while he was engaged in a battle with Max Hahn, the son of his partner, John Hahn. Hill, a chemical engineer, and John Hahn, a metallurgist, started a chemical group, Hanhill, in 1965. Hahn was a close friend of Hill’s father, Pinkie, a highly respected doyen of the mining industry.
Hill teamed up with John Hahn after returning from the United States where he had worked for magnate Charles Engelhard, also a friend of his father’s.
Hanhill’s first venture was a fertiliser plant in Rhodesia which was the subject of United States sanctions. But it is best known for trying, in 1980, to take on the industrial might of the Anglo American Corporation when it challenged the monopoly in mining explosives maintained by Anglo’s chemical business, AECI.
Hanhill introduced a new type of explosive, Tovex, which it manufactured under licence from US chemical giant Du Pont. The Competition Board declared null and void the agreement between the Chamber of Mines and AECI that all chamber mines would buy explosives exclusively from the Anglo American company.
Hanhill then decided to expand its chemical operations in Swaziland. The decision coincided with two events that savaged the group’s main fertiliser business – a drought, and synthetic fuel giant Sasol’s entry into fertilisers.
Hanhill’s Swaziland creditors decided to foreclose and sacked Hill, retaining Max Hahn whose father had by now retired. Then began Hill’s battle to gain control of the company’s assets and the Tovex licence – a battle an associate of his, Philip Clarke (also a British resident and also named in the Reserve Bank’s indictment against Hill), started winning when he found enough money to buy out the banks shortly after the reimposition of the financial rand dual- currency system in September 1985.
In 1989, the Francis George Hill Family Trust applied to the Pretoria Supreme Court to unfreeze some of Hill’s assets which the bank had attached after his escape to Britain.
On affidavit the deputy governor of the bank, Jan Lombard, explained to the court how Hill’s roundtripping scheme worked. The bank contended that “Hill, through his trusts and companies generated large sums of money through manipulating the financial rand mechanism and that Hill directly or indirectly controls these front companies which are merely his alter ego”.
Lombard said the bank started investigating after it picked up the transfer of millions of rands worth of dividends from Eskom bonds into a range of accounts. The bank hired auditors Aiken & Peat to investigate some businessmen, including Hill and Clarke.
Lombard said that through the scheme R102- million in financial rands was converted into commercial rands. Several non- residents, including Hill’s sister and a range of companies in which Hill had an interest, acquired financial rand balances and Eskom stock.
At one stage during his exile, Hill promised to return to South Africa once there was a new political dispensation – a pledge he has failed to honour. His wife Lynne, whom he married in 1960, is the controlling shareholder of Finance Week which gave him the nickname “Fat Ollie” in a series of acerbic articles about him in the late 1980s. The financial magazine – then controlled by editor Allan Greenblo whom Hill deposed through costly litigation that Greenblo could not sustain – wrote of Hill in 1989: “From the size of his girth to the size of his bank balance, there’s nothing small about Oliver Hill.”
That no longer holds. After four months in Brixton Prison, officials attending the trial said a rather gaunt-looking Hill appeared this week at Bow Street Magistrate’s Court.