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Nulane Investments trial: Inside the Gupta-linked R24.9m Free State fraud and money laundering case

Nulane Investments trial: Inside the Gupta-linked R24.9m Free State fraud and money laundering case
Gupta family associates Peter Thabethe, Limakatso Moorosi, Seipati Dhlamini, Iqbal Sharma, Dinesh Patel and Ronica Ragavan appear in the Bloemfontein high court on 8 September 2022. (Photo: Gallo Images / Volksblad / Mlungusi Louw)

The R24.9m Nulane Investments trial began in the Free State High Court in Bloemfontein on Monday. We unpack the multimillion-rand fraud and money laundering case and take a look at the major players involved.

In the dock are Peter Thabethe, the former head of the Free State Department of Agriculture and Rural Development; Limakatso Moorosi, a former accounting officer at the Department of Agriculture and Rural Development; and Seipati Dhlamini, the former chief financial officer of the Department of Agriculture and Rural Development.

The other accused are Iqbal Sharma, a high-flying businessman and former senior official in the Department of Trade and Industry; Dinesh Patel, Sharma’s brother-in-law and a representative of Sharma’s company Nulane Investments 204; and Ronica Ragavan, a long-time Gupta enterprise employee and director of Islandsite Investments One Hundred and Eighty.

The companies indicted are Nulane Investments 204 and the Gupta-owned Islandsite Investment One Hundred and Eighty, which is in business rescue.

What’s the Nulane matter all about?

The case is based on an alleged corrupt contract in which R24.9-million was paid by the Free State provincial government to Nulane Investments to conduct a feasibility study for the province’s flagship Mohoma Mobung project, on the basis that Nulane had unique skills to perform the work.

The controversial Vrede dairy project was one of the programmes included in the Mohoma Mobung project.

Sharma was the sole director of Nulane Investments — the company that landed the R24.9-million contract in the Free State in 2011. The State contends that there was no valid reason the due diligence agreement could not have been procured on the open market as the services offered by Nulane were neither “unique” nor “innovative”.

Additionally, the State alleges that Nulane Investments had no employees on its books, and Sharma is accused of having outsourced the service to Deloitte for a fee of R1.5-million — a fraction of what the provincial government paid to the company. Sharma then allegedly entered into another subcontract for exactly the same services, this time with a Gupta-linked company, Gateway Limited in Dubai.

Nulane’s subcontract with Gateway, the State contends, was a carbon copy of the one it entered into with Deloitte. The State maintains that this subcontract was merely a means to launder Free State government funds to the Dubai company for the ultimate benefit of the Guptas.

Once paid to Nulane, the majority of the cash was allegedly laundered and diverted through a scheme of transactions into and through different bank accounts and Gupta-linked entities.

This is the first State Capture case to proceed to trial and the matter is set for trial until 3 March.

What are the charges?

Sharma — considered the holder of many State Capture-era secrets in view of his long-standing Gupta ties — was arrested on 2 June 2021, with Thabethe, Moorosi and Dhlamini.

Dhlamini and Moorosi were each granted R10,000 bail. Thabethe was released on bail of R10,000 on 7 June 2021, after spending the weekend behind bars. Patel handed himself over to police shortly afterwards and was also released on bail of R10,000.

Following his high-profile arrest, Sharma was initially denied bail by the Bloemfontein Magistrates’ Court but was later released on bail of R500,000.

Ragavan joined the list of accused after she was arrested in October 2021, following an astonishing affidavit that she filed before the Free State High Court as part of the Gupta family’s efforts to stop a draft restraint order against Islandsite Investment One Hundred and Eighty from being made final, Scorpio’s Jessica Bezuidenhout reported.

An official indictment released by the National Prosecuting Authority (NPA) details charges ranging from contravention of the Public Finance Management Act (PFMA), to fraud and/or money laundering.

The three former Free State government officials, Thabethe, Moorosi and Dhlamini, are accused of contravening the PFMA in the processes followed to contract Nulane Investments to perform due diligence.

“There was no fair, equitable, competitive, transparent and cost-effective procurement for the… services provided by [Nulane Investments]. There was no competitive bidding process or other legal system to ensure market-related values. And the procurement was not approved by any bid committee of the Department,” reads the indictment.

Thabethe, Moorosi and Dhlamini also face charges of fraud. Sharma, Patel and Ragavan face charges of fraud and money laundering.

All of the accused have indicated that they will plead not guilty.

How does the Vrede Dairy Project fit in?

The R24.9-million Nulane Investments case, which saw the arrest of Sharma and several others in connection with a dodgy Free State government deal and for which they are now standing trial, is an important precursor to the Vrede Dairy Project case.

The R280-million Vrede Dairy Project corruption case, in which former minister of mineral resources Mosebenzi Zwane is one of the 16 accused, is scheduled to return to the court on Wednesday, 25 January. The matter was transferred to the Bloemfontein High Court in November last year.

Ragavan, Thabethe and Dhlamini are also accused in this case. Between them, they face charges of fraud, theft, corruption and money laundering. 

Read more in Daily Maverick: “Mosebenzi Zwane and co-accused in Estina dairy corruption case set for trial in high court

The charges pertain to the Vrede Dairy Project scandal, in which the Free State government unlawfully paid the Gupta family’s company Estina more than R280-million for a project that sidelined the intended beneficiaries — small-scale black farmers in the province.

The Gupta brothers Rajesh and Atul fled South Africa in 2018 and were arrested in Dubai in June last year.

In June 2021, the NPA’s Investigating Directorate (ID) produced a charge sheet in the Nulane case with Atul and Rajesh Gupta and their wives, Chetali and Arti, listed as the accused. However, for strategic reasons, the ID then split the Guptas from the case to ensure that Sharma and his co-accused had a chance of a speedy trial, Scorpio’s Jessica Bezuidenhout reported.

The two Gupta brothers are facing extradition to stand trial in two criminal cases: the R24.9-million Nulane matter and the Vrede Dairy Project scam. DM

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