On March 5 Judge Willem van der Merwe (perhaps best known for his acquittal of Jacob Zuma in the rape case) granted a preservation order freezing £437 594 in the account of Fana Hlongwane’s Gamai Trust in Lichtenstein. Apparently, the money had come into the trust from BAE’s agent Anstrow.
The return day for the matter to be argued in court was April 6 — which is when the National Director of Public Prosecutions (NDPP) would ordinarily have moved for a forfeiture order.
But on March 19 the NDPP, Menzi Simelane, announced the abandonment of the preservation order — that is, some three weeks before Hlongwane would have been entitled to oppose the next step in the process, namely the forfeiture order by which the preserved pot of sterling would have been forfeited to the state.
To understand the implications of the NDPP’s decision, it is necessary to examine the basis on which a judge is authorised to grant the initial preservation order. Section 38 of the Prevention of Organised Crime Act of 1998 permits the granting of such an order if the court has reasonable grounds to believe that, in this case, the Lichtenstein money was (1) an instrumentality of a specified offence (in this case money that was linked to the commission of crimes of fraud, extortion, exchange control and presumably a battery of statutory offences); or (2) was the proceeds of unlawful activities. The order is granted ex parte — that is, on an application by the NDPP in which no notice is served at this stage on the possessor of the money — Hlongwane, in this case. Apparently the trustees of the Lichtenstein trust were never a party to the proceedings.
Precisely because only the NDPP appears before the court, it is incumbent on the judge to be even more cautious than he or she would usually be in granting so drastic a form of relief. To that end the NDPP would be required to produce a substantial supporting affidavit setting out clear evidence that would justify the conclusion that reasonable grounds exist for such an order to be granted.
Expressed in the context of this case, the NDPP would doubtless have compiled a careful affidavit showing how Hlongwane acquired the money, the NDPP’s reasons for connecting the receipt of the money to criminal activities and the nature of the criminal activity the NDPP had reason to believe was performed by Hlongwane.
Short of the production of this evidence, it is difficult to see how the preservation order of March 5 could have been granted.
The media statement issued by the NDPP to justify the decision not to proceed with an application for a forfeiture order must be read in this context. It informs the nation that, “even if [a] forfeiture process were to be instituted by the [National Prosecuting Authority], it would require a good basis for doing so as opposed to a simple suspicion — it is test of balance of probabilities”.
Applying this principle, the NDPP now claims that submissions received from Hlongwane clearly show that the preserved funds were paid to him pursuant to a consultancy agreement with BAE Systems and that money was thus sourced in a binding contract between the two parties. Hence “the NDPP [was] persuaded on the papers submitted that the suspicion of criminality that informed the application for a preservation order was rebutted by the information provided — the weight of the evidence available strongly shows there is no criminality”.
So, according to this statement, not only was the evidence placed before Judge Van der Merwe of a most unreliable kind but, if the statement is to be believed, a grave injustice was perpetuated on an innocent person who, contrary to the NDPP’s initial application and voluminous reportage in the press and books, was simply plying an honest trade.
Analysed thus, the NDPP got it hopelessly wrong in its preservation application. Presumably, if those responsible for the application had done their homework, they would have been able to ascertain that there were legitimate agreements between Hlongwane and BAE. If so, they would not have proceeded with the relief for a preservation order. And it is precisely that they did so proceed, and mount a case that passed the test of reasonable belief, that calls into question the so obvious explanation that the moneys were legitimate — an explanation that seems to fly in the face of so much that has been written about the arms deal to date.
Frankly, this NDPP statement may not be as bad as the plagiarised effort of Mokotedi Mpshe — when as acting NDPP he explained his decision to drop graft charges against Zuma — but it is about as incoherent. The least that the NDPP can do is reveal what the evidential basis of the initial application was. That would indicate the extent to which the NDPP knew or claimed to know about the source of this money that is suddenly so snow white. As matters stand, Simelane is running the risk of fulfilling everyone’s legitimate expectations.