The high court in Johannesburg has set down 8 March next year as the hearing date for the Investigative Directorate’s (ID’s) application to forfeit the Optimum coal mine, the shares the Gupta family holds in the mine and the debt intended to be covered into a majority stake in the mine.
The value of the preservation order sought comes to about R2.083-billion.
The ID said on Friday that notice was given to all the respondents to file answering affidavits by 10 January next year, showing why their assets should not be forfeited to the state.
The Gupta brothers, who are resisting extradition to South Africa to face charges for their central role in the state capture scandal, are expected to oppose the application.
The application will also be a headache for Duduzane Zuma, son of former president Jacob Zuma and sometime business associate of the Guptas. He acquired shares in Tegeta shortly before it wrestled Optimum from Glencore with the help of Eskom officials.
The basis for the application is set out in an affidavit by an ID investigator who submits: “The fraudulent activities by officials of Eskom, and criminal activities of persons and entities associated with Tegeta, enabled Tegeta to raise the funds necessary to pay the purchaser portion and to comply with the purchaser deadlines Tegeta had to meet by 14 April 2016.”
How Eskom officials bent over backwards to enable Tegeta, through advance payments, to come up with the cash to buy the mine has been aired extensively before the Zondo commission of inquiry into state capture.
The affidavit gives a breakdown of the payments that made up the R2.084-billion sale, including R68-million from Eskom, a R152-million “loan” from Trillian Consulting and a similarly described “loan” of R155-million from Oakbay Investments, the latter both having strong links to the Gupta brothers.
Eskom’s payment included a prepayment for coal of R659.5-million made “fraudulently and posthaste” on 13 April 2016. This amount is described in the application as the proceeds of fraud, and it further sets out the conflict of interest on the part of several board members, including Kuben Naidoo, and the misrepresentation by several officials, including former chief financial officer Anoj Singh and former group executive Matshela Koko.
Koko is described as “a Gupta associate within the ranks of Eskom’s senior executives”. The deal with Tegeta is described as unnecessary, in so far as the obvious solution for Eskom if it had been concerned about the consistent supply of coal from Optimum to its Arnot power plant, it could have sourced it directly without jumping through hoops to impose Tegeta as a “middleman”.
There was no need for a prepayment, as Optimum could have supplied Eskom with coal directly without such, it states.
The deal was one of the early warnings of state capture, flagged by former public protector Thuli Madonsela in her 2016 report, State of Capture, that led to the establishment of the Zondo commission.
The court application also details how the deals relating to Optimum were not true coal contracts but money-laundering mechanisms used by the Guptas to bring proceeds of crime perpetrated elsewhere back into South Africa to prop up their business empire here.