/ 8 June 2021

Gupta associate Sharma denied bail in Free State fraud case

Iqbal Sharma And Co Accused Appear In Court Over Estina Dairy Project In Bloemfontein
Former Transnet board member Iqbal Sharma appears at the Bloemfontein Magistrate's Court on June 07, 2021 in Bloemfontein, South Africa. It is reported that the suspects were arrested in connection with the failed R288 million Estina dairy project. (Photo by Gallo Images/Volksblad/Mlungusi Louw)

Gupta associate and former Transnet board member Iqbal Sharma, who is facing multiple charges of money laundering and fraud, was denied bail by the Bloemfontein magistrate’s court on Tuesday.

Magistrate Estelle de Lange ruled that the state had provided sufficient evidence to show that releasing Sharma on bail would not be in the interests of justice.

The state had a strong case against the businessman, she said, and if convicted, Sharma faced up to 15 years of imprisonment. 

Before the short ruling was delivered, the state’s lead prosecutor, advocate Peter Serunye, told the court that Sharma, having travelled and returned to South Africa despite knowing he had been implicated in criminal activities at the Zondo commission, should not be taken as proof that he would not attempt to flee now that he had been criminally charged.

Sharma is the first Gupta associate to be charged with fraud and money laundering.

“The accused did not know this day [his arrest and charges] would come. That is why, even when evidence was produced at the Zondo commission, he never felt the need to flee,” said Serunye.

In the affidavit of Lieutenant Colonel Mandla Mtolo, the lead investigator in the case, read into the court record, said Sharma was an “overwhelming flight risk who has the means and incentive to flee South Africa in an attempt to place himself beyond the jurisdiction of this court”.

The court was told that travel records showed that since 2010, Sharma had made more than 100 flights to the United Arab Emirates (UAE), where he has residency rights.

He also failed to disclose that, between 22 August and 8 December 2016, he had transferred R264 459 241 to Issar Global, his UAE-based company.

De Lange was further told that Sharma had the means to forfeit the bail amount of R100 000, which he had suggested to the court.

Before Serunye addressed the court, advocate Stephanus Coetzee, acting for Sharma, said that his client not fleeing during his international travels — despite knowing he had been implicated in alleged criminal acts at the Zondo commission — was proof that Sharma was set on standing trial to address the “serious allegations” he was facing.

“He might have the means to evade trial but that doesn’t mean he will do that,” said Coetzee.

“The charges against [Sharma] are serious, but so is murder, and when other people are charged with that, they get bail,” he added.

He said it was important that “the fluff” around the matter was removed and common cause be scrutinised when considering the bail application.

“What is common cause is that [several] others on the charge sheet still have to be extradited,” said Coetzee. “The state now first has to get those people into the country before the trial can start. That can take years, and in all that time, the accused must stay in custody.”

The trial would be protracted, he told the court, and the evidence to be presented voluminous. Sharma needed to be able to get access to documentation and evidence that he could not retrieve while in prison. Should he not be able to do so, it would negatively affect his defence.

“From the state’s side, it appears the investigation is finalised, but the accused can only start preparing [his defence] now. How can he access documents [relating to overseas dealings in particular] if he is in prison?” asked Coetzee.

On Monday, the same court granted bail of R10 000 to co-accused Peter Thabethe, who was the head of the Free State’s agriculture and rural development department at the time of the alleged crimes.

The two are among 15 accused — including companies — facing charges of fraud, money laundering and, for the officials, contravention of the Public Finance Management Act.

The case involves the alleged defrauding of the department through a R25-million feasibility study dating back to 2011 that was awarded without a competitive bidding process — at the recommendation of Thabethe and further motivated by several of the other accused — to a company owned by Sharma.

The study was meant to determine the feasibility of the R280-million Estina dairy farm project in the Free State.

Sharma sub-contracted the feasibility study to Deloitte for R1.5-million. The balance of the R25-million allegedly eventually ended up with companies owned and controlled by the Gupta brothers through money laundering activities.

The accused have already had their assets frozen, and the National Prosecuting Authority (NPA) has asked Interpol to execute warrants of arrest for Atul and Rajesh Gupta and their wives, Chetali and Arti, among other accused.

Serunye told the court that according to evidence placed before the Zondo commission, South Africa’s coffers had been looted of about R49-billion during the state capture years. He described this as “chilling”.

But, he said, the NPA and other investigative institutions had been strengthened under the administration of President Cyril Ramaphosa.

“Now that [Sharma] has been charged, he sees the seriousness of his actions. Should we take the risk of him [fleeing while on bail]?” he asked.

“South Africans would be disappointed if he flees and does not stand trial. The state coffers have been depleted and must be restored.”

After the ruling, the Investigative Directorate (ID) said in a statement that all of the accused are expected to be back in the Bloemfontein magistrate’s court on 5 July. 

“The ID has concluded investigations, is ready to hand over the docket to the defence and start with the trial as soon as possible,” it said.