The charges in the R24.9 million fraud and money-laundering case underpins South Africa’s ongoing efforts to secure the extradition of Atul and Rajesh Gupta from the United Arab Emirates.
The supreme court of appeal (SCA) has referred the state’s application for leave to appeal its devastating defeat in the Nulane Investments case for oral argument.
The decision means that the National Prosecuting Authority (NPA) lives to fight another day in the country’s first state capture trial. It ended in the discharge and acquittal of all accused in April.
The NPA was denied leave to appeal by trial judge Nompumelelo Gusha in August, and then petitioned the appellate court, arguing that she had mishandled the case and made nine material errors in law.
The SCA order reads: “The application for leave to appeal is referred for oral argument, in terms of section 17(2)(d) of the Superior Courts Act of 2013.
“The parties must be prepared, if called upon to do so, to address the court on the merits.”
The charges in the R24.9 million fraud and money-laundering case underpins South Africa’s ongoing efforts to secure the extradition of Atul and Rajesh Gupta from the United Arab Emirates (UAE).
The state argued in court that they were part of a conspiracy involving Free State officials, former Transnet board member Iqbal Sharma, his brother-in-law Dinesh Patel and Ronica Ragavan, who calls herself the treasurer of the Guptas’ business operations.
Sharma was arrested in June 2021, a decade after Free State officials deviated from public finance rules to awarded a contract worth R24.9 million for a feasibility study to his newly-founded Nulane Investments.
It pinpointed Paras, an Indian firm linked to the Guptas, as the preferred entity to a dairy project in Vrede in the Free State. This would later become the Estina dairy farm scam in which more than R280 million allegedly flowed to the Gupta family.
Gusha, an acting judge, found that the prosecution was unable to prove that provincial officials broke the law when they gave the contract to Nulane.
It meant that the case collapsed at the first hurdle, because without proof that the money was stolen, the state could not sustain the charge of money-laundering in relation to the rapid-fire transfers that followed to companies in the Gupta stable.
R19 million ended up in a Standard Chartered Bank account in the UAE controlled by the Guptas before wending its way back to the Absa Cash Focus facility of Sahara Computers, of which Atul Gupta was the authorised system manager.
Gusha granted section 174 discharges to two of the former officials, Nulane, Islandsite, Ragavan, Sharma and Patel for lack of evidence, meaning they did not have to raise a defence.
The eighth accused, former head of the Free State provincial departments of agriculture and rural development, Limakatso Moorosi, was acquitted.
The NPA argued in its application for leave to appeal that apart from failing to evaluate evidence properly, the judge had misapplied section 174 of the Criminal Procedure Act.
It said the appellate court must consider whether, had this and other mistakes in law not been made, there would have been a reasonable prospect of the case ending in the conviction of the accused.
This was indeed so, state prosecutor Jacyntha Witbooi submitted.
“The discharge of respondents 1 and 3 to 8 and the acquittal of respondent 2 were based on the learned judge’s wrong application of the legal principles, bad in law and a grave miscarriage of justice.”
Witbooi further argued that Gusha’s failure to set out her factual findings — first in her ruling, again later when the state requested her in writing to do so and finally in her August denying the NPA leave to appeal — meant that sections 146(a) of the Criminal Procedure Act and Article 9 of the Judicial Code of Conduct were not respected.