Hlophe: damning new facts

Cape Judge President John Hlophe misled the Judicial Services ­Commission (JSC) and the public over money he took from an asset management firm, new evidence indicates.

The Mail & Guardian has obtained discovery documents that the Oasis financial services group was required to file in its aborted defamation suit against Judge Siraj Desai. The documents cast serious doubt on Hlophe’s claim that former justice minister Dullah Omar gave him permission to do work for the company.

They show that the Oasis-­administered retirement fund, of which Hlophe was a trustee, was ­created a full year after Omar had left office and that payments to Hlophe began later still.

The conduct of the Cape’s top judge has been under scrutiny since it emerged that he had received regular payments from Oasis. In 2004 Hlophe allowed Oasis to sue Judge Siraj Desai for defamation — after initially barring any action — raising concerns about a conflict of interest.

Questions were asked about whether Hlophe had followed rules, which required judges to receive ministerial permission to undertake paid work outside the courts.

Hlophe has maintained that he received verbal permission from Omar to do work for Oasis and to be compensated for expenses he incurred. Until now it has been impossible to test the veracity of his account because Omar died in 2004 and the JSC cleared him last December because no evidence was available to contradict his version.

The court papers filed in the Desai case — which Oasis dropped in May — offer substantial grounds for doubt.

Hlophe started receiving monthly payments from Oasis for his work as trustee at the Crescent Retirement Fund more than two years after Omar left the justice portfolio, company records show.

The first payment, of R25 000, were made in February 2002; Omar moved to the transport portfolio in June 1999.

The Crescent Fund was established only in July 2000, a year after Omar left the justice ministry, and board minutes show that the meeting during which Hlophe’s appointment as an independent trustee was approved took place more than three months later, on November 1 2000.

A senior justice official familiar with the processes followed during Omar’s tenure cast further doubt on Hlophe’s claims. There is no way, the official told the M&G, that the precise and lawyerly Omar would have been satisfied with a purely oral agreement.

There are other discrepancies.

When it emerged that he had been receiving monthly payments, first of R10 000 and later of R12 500, Hlophe responded: ‘I was never kept for a fee by any company. I was given expense payments for my expertise, but I never got a retainer.”

The true scale and intent of the payments is now clear and appears to contradict his claims. Between 2002 and early last year, Hlophe was paid nearly R500 000, accounting statements and cheque stubs discovered to the court by Oasis show.

These documents describe the monthly payments as ‘consulting fees” or ‘advisory fees” — not as expenses.

A further indication that they were not expense payments comes from rules of the Crescent Fund, which state independent trustees may negotiate a fee. They do not mention expenses.

Hlophe’s account of his reasons for allowing Oasis to sue Desai, after initially denying its request, also appears questionable.

In December 2001, 10 months after he became a trustee, Oasis asked Hlophe for permission to sue Desai. The company alleged that Desai’s remarks at a public meeting to discuss a proposed development by Oasis in University Estate, where Desai lives, were defamatory.

The judge president’s permission is required before such a civil claim can proceed against a judge and Hlophe refused the request on December 12 2001. ‘I have carefully considered your application for permission to institute civil proceedings against Judge Desai. At this stage I am not inclined to grant permission,” he wrote.

The first payment from Oasis, R25 000 described in company accounts as an ‘advisory fee”, was made two months later.

Over the following months Oasis continued the payments and pressure. Hlophe received at least nine letters from Oasis’s attorney, Grant van Niekerk. In a letter to Hlophe in January 2004, Van Niekerk wrote: ‘We are under immense and sustained pressure from our client to press you, Judge, for your reply. Questions have been asked whether Judge Desai is above the law and whether time is the magical elixir which will make our inquiry disappear.”

Six months later Hlophe received another letter: ‘It’s now nearly three years since the [public meeting] and we have written numerous letters to you — requesting your permission to cite Judge Desai as a defendant in an action for damages. Whilst we understand that your varied commitments are many, our client is concerned that should this matter not be dealt with expediently it may be faced with the matter prescribing.”

On August 31 2004, having already paid Hlophe R292 500, Oasis turned up the heat. Van Niekerk placed on record a conversation between Hlophe and the company’s deputy chairperson: ‘We are advised that a discussion ensued between you and Nazeem Ebrahim wherein you had requested that you be given an opportunity to discuss the matter with certain key figures. Since then, you had indeed discussed the matter with Penuel [sic] Maduna when he was minister of justice and more recently with Bridget [sic] Mabandla and another senior person from the Justice Department,” the attorney wrote.

This week Justice Minister Mabandla’s spokesperson, Zolile Nqayi, told the M&G: ‘We have no official record of such a discussion between the minister and judge president Hlophe. In any case the judge president is not required to discuss such matters with the minister”.

In October 2004, Hlophe allowed Oasis to proceed with the suit: ‘— I regret that it took so long to revert back to you — I had hoped that the matter would be resolved amicably. In light of the fact that the matter has not been resolved, I hereby give consent.”

For the next two months Hlophe received his monthly R12 500 and thereafter two payments of R25 000 each. The last payment recorded in the Oasis financial records before the court was in May last year. By that stage he had received R467 500.

Interviewed on Thursday, Hlophe said had no comment to make. ‘The matter is before the JSC and I’ve given them an explanation. The JSC is the appropriate forum to deal with this matter.”

However, he did deny telling the Oasis deputy chair that he had consulted Mabandla. ‘I didn’t ­consult on this matter with minister Mabandla because it was not necessary.”

What the JSC said

The M&G asked Judicial Service Commission spokesperson Milton Seligson to comment on the discrepancies between Cape Judge President John Hlophe’s account and the documentary record.

On the fact that Dullah Omar was no longer justice minister when Hlophe began doing work for Oasis, Seligson said:

‘On December 8 2006, when the JSC took the decision [to clear Hlophe], it was not in possession of any document showing the date of the judge’s appointment as a director of the Crescent Retirement Fund and was not aware of the discrepancy. The JSC had attempted to obtain the relevant documents from the Oasis Group, but the latter had declined to make them available while their case against Judge Desai was still pending.

‘You will note that the JSC’s decision referred to the evidence at present available and stated that the matter could not usefully be pursued at this stage.”

On whether Hlophe misled the JSC, Seligson said:

‘It would obviously be inappropriate for me to comment on your opinion that the judge president misled the JSC, especially while the matter is still under consideration by the JSC.”

On the fact that Hlophe has missed a June deadline to reply to new JSC questions:

‘I cannot anticipate what action the JSC will take in the light of the judge president’s failure to reply to the commission’s query by the end of June. That is for the commission as a whole to decide. The matter will no doubt receive the attention of the commission as soon as possible.”