Central Gupta figure Ronica Ragavan and her colleague Ugeshni Govender are in the Randburg Magistrates’ Court on Wednesday, facing a total of 11 charges including fraud, money laundering and contravention of local environmental laws. The whereabouts of their acolyte and co-accused, Ravindra Nath, is uncertain. He will be charged in absentia.  

Accused number seven, former deputy director-general Joel Raphela, too will have to answer to charges of fraud, forgery, uttering and the contravention of environmental laws and regulations. Govender will face an additional charge of perjury for lying in an affidavit to the National Prosecuting Authority’s Asset Forfeiture Unit. 

Around noon on Wednesday, journalist Govan Whittles reported from the Randburg Magistrates’ Court that Raphela “is being rushed to hospital” because he “is struggling to speak or walk. He’s accused of R100-million corruption involving Optimum and Tegeta.” 

Happening Now: Former DDG of mineral resources dept Joel Raphela is being rushed to hospital after he appeared at Randburg Magistrates Court on corruption charges. Raphela is struggling to speak or walk. He's accused of R100m corruption involving Optimum and Tegeta.

— Govan Whittles (@van1go) May 25, 2022

Optimum and Koornfontein Mines, as managed by Ragavan, Govender and Nath, are accused number three and four.

The accused, except for Nath, were arrested on Wednesday morning, said Independent Directorate spokesperson Sindisiwe Seboka. 

The story here is how the Guptas, with a hand from Raphela, pillaged the strictly governed rehabilitation trust funds of their Optimum and Koornfontein mines, worth a total of R1,75-billion. The money was not used for rehabilitation of the mining area, but to cover operating expenses of Gupta company Tegeta Exploration and Resources as well as the Optimum and Koornfontein mines. 

Under South African law, the holder of a mining right is obliged to keep rehabilitation funds in ring-fenced trusts. The trust funds are governed by the National Environmental Management Act 107 of 1998 (NEMA) and its regulations. Its sole purpose is to rehabilitate the mining area after the closure of the mine. Also required is the authorisation from the Department of Mineral Resources before the trust funds may be utilised. 

Advocate Andrea Johnson. (Image: Screenshot)

Of course, the Gupta brothers and their acolytes found it impossible to keep their hands out of the handsome kitty. 

This investigation into this case was initiated by former ID head Hermione Cronjé. Her successor, Andrea Johnson, pushed it over the finish line. 

Timeline

Through a series of events leading up to 2015, Gupta companies Oakbay investments and Tegeta Exploration and Resources acquired Optimum and Koornfontein mines in Mpumalanga.

The backstory here is that the previous owner, Glencore, found itself in a vice, bleeding money, because Eskom’s then chief executive Brian Molefe and the Department of Mineral Resources, headed by then minister Mosebenzi Zwane, in a coordinated move turned up the heat, at the Guptas’ behest

Business in a time of State Capture: The Glencore story

This said, of course, with the understanding that Glencore itself does not shy away from criminality where it suits them. Glencore recently admitted to several cases of bribery and commodity price manipulation in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea, Brazil and Venezuela. In the Optimum/Koornfontein instance, they were merely outplayed by the Guptas, Zwane and Molefe.

With the sale of Optimum and Koornfontein mines, Tegeta Exploration and Resources also took control of the mines’ rehabilitation trusts with a combined worth of R1,8-billion.

This was around February 2016.

About three months later, on 23 May 2016, Ragavan, Govender and Nath allegedly started their pillage of the trust funds to help the Gupta businesses stay afloat. 

In its indictment, almost to the day six years after the alleged crimes, the NPA highlights two sets of money flows which the prosecuting authority describes as money laundering, fraud and contraventions of NEMA.

The first was when Ragavan and Govender instructed that R7,5-million was to be transferred from Optimum mine’s off-limits rehabilitation trust account to the mine’s operational account.  Into the same account, another R9,5-million flowed from Tegeta Exploration and Resources. Optimum mine then paid R26,4-million to Klipbank Mining for underground mining services. Services, the NPA argues, that had nothing to do with the rehabilitation of Optimum’s mining area. 

It looks to the NPA like Ragavan and Govender were trying to hide where the money came from, mixed it up with other money flows and then used it to pay a service provider – an act of money laundering, the prosecuting authority says. Using the rehabilitation funds without the thumbs-up from Mineral Resources is also a contravention of NEMA rules and regulations, the NPA claims. 

amaBhungane and Scorpio #GuptaLeaks: Tegeta buyer ‘hid’ Gupta assets before

Two years later, in an affidavit dated 4 April 2018, Govender attempted to explain the money flows to the NPA’s Asset Forfeiture Unit, claiming: “The money was required for the business rescue practitioners, who were then operating Optimum Coal Mine (and did so until August 2016), to make payment to the rehabilitation contractor for rehabilitation work carried out at the mine.” 

The NPA calls this a bluff, saying that no rehabilitation work was done, that the business rescue practitioners did not request any money and that Govender is lying. So, they have slapped her with an additional perjury charge.

The second issue relates to Koornfontein Mine. By early 2016, South Africans were already broadly aware of the Guptas’ undue influence over former president Jacob Zuma. The angry hum in the ANC grew audible and civil society started picketing in the streets. 

This public pressure as well as the fact that the Gupta empire was by now too vast and too big to slide through all the cracks of governance, caused several financial institutions and banks to end their relationships with the family.

Making lemonade out of lemons, Tegeta, as the new owner of Koornfontein Mine, informed the Department of Mineral Resources that all four major banks were in the process of closing their accounts and for that reason the trust funds had to be moved. The department agreed, as long as legislation was adhered to.

So it happened that R280-million in rehabilitation trust funds was moved to the Bank of Baroda, into an account held by the Koornfontein Rehabilitation Trust. 

On 4 May 2016, Tegeta sent a letter to the department, signed by Nath, requesting approval to use Koornfontein’s rehabilitation trust funds for mining rehabilitation.

Joel Raphela, deputy director-general of the department, gave signed approval and attached a list of conditions. A similar letter, also signed by Raphela, was handed to the Bank of Baroda where the funds were held. But, the NPA argues, the letter only stated that the department “grants approval in principle to access the funds held in the account of Koornfontein Rehabilitation Trust”. None of the conditions spelt out to Tegeta was communicated to the Bank of Baroda. 

A month after this exchange of letters, Govender wrote to the Bank of Baroda, saying they wish to register a loan facility of R150-million against the R250-million deposit in the trust account. The letter states: “Mrs Ronica Ragavan in her capacity as the director of the Company is hereby authorised to do the needful to give effect to this resolution (sic).”

The NPA’s three problems with this deal are:

• Ragavan was not a trustee of the trust fund and had, in fact, no authorisation over the trust funds;
• the rules of the trust funds are that they should be ring-fenced and unencumbered, so the loan was therefore not permissible; and
• the funds were again not used for rehabilitation of the Koornfontein Mine area.

The “loan” then started to travel: R100-million in trust funds hopped between at least three different bank accounts held at the Bank of Baroda before it was moved to Tegeta’s account held at the State Bank of India. From here, four payments totalling R97,8-million were made to Klipbank Mining, Coalcor Mining and another back to an account held at Bank of Baroda, ultimately into an account held by Tegeta. The original rehabilitation trust fund money in Tegeta was also disbursed to three service providers. 

None of the above is related to the rehabilitation of Koornfontein, but sure looks a lot like money laundering, the NPA argues.

Raphela has to answer to charges of fraud, contravention of NEMA and its regulations as well as forgery and uttering, the NPA’s indictment says. Raphela committed an act of fraud, forgery and uttering, it argues, when he wrote a letter to grant approval to use the Koornfontein Rehabilitation Trust funds without any conditions of access. 

Former mineral resources minister Mosebenzi Zwane testifies at the Zondo Commission on 13 May 2021. (Photo: Gallo Images / Papi Morake)

The trust fund is safe.

Zwane had failed to intervene, so the Organisation Undoing Tax Abuse (Outa) did.

Outa first obtained a court order to freeze the rehabilitation funds at the Bank of Baroda and then reached a settlement where the money was moved out of the Guptas’ reach and reallocated under the supervision of the Department of Minerals. One effect is that this action will prevent the Gupta acolytes from using the rehabilitation trust to pay their growing legal fees.

None of the Gupta enablers at the banks, including the Bank of Baroda which was fined by the South African Reserve Bank for its role in the saga, was added to the current prosecutions list. Neither was Mosebenzi Zwane, the minister of mineral resources at the time. DM

This story was updated at 1.45pm on 25 May 2022 to include court developments.