For the first time, the trial involving a R24.9-million feasibility study that led to the controversial Gupta-linked Vrede Dairy Project has heard about Atul Gupta’s alleged involvement in transfers worth millions between the accounts of Gupta-owned businesses.

These businesses include Sahara Computers; Pragat Investments; Islandsite Investments and Nulane Investments (both of which are accused in the trial); and the Indian state-owned Bank of Baroda.

The State alleges that the flagship project, set up by the Free State agriculture and rural development department, with a R280-million price tag, was used as a vehicle to loot public funds, with millions ending up in Gupta-owned companies.

Absa data analyst Norman Smit, who worked in the bank’s financial crimes and compliance department, testified on Thursday about the transactions amounting to millions that were shifted between different accounts, some mere hours or days apart.

Smit read the following transactions into the court record:

8 November 2011

The Free State department of agriculture and rural development paid R12,492,120.00 into Nulane Investments’ Nedbank account.

On the same day, Nulane transferred R10-million into the Pragat Investments account.

Also on the same day, R9.8-million was transferred from the Pragat Investments account to the Islandsite Investments account.

11 November 2011

An amount of R2-million was transferred from Nulane Investments’ Nedbank account to the Pragat Investments account.

On the same day, Pragat Investments transferred R2-million to the account of Islandsite Investments.

22 December 2011

The provincial department paid R4,164,040.00 into Nulane Investments’ Nedbank account.

5 January 2012

R4-million was paid from the Islandsite Investments’ account to Pragat Investments’ account. On the same day, Pragat Investments transferred R8-million to Nulane Investments’ account.

6 January 2012

Nulane Investment transferred R8-million to Wone Management’s Standard Bank account.

11 January 2012

Wone Management returned R8-million to Nulane Investments’ account in two tranches of R4.9-million and R3-million.

12 January 2012

Pragat Investments transferred R9-million to Islandsite Investments’ account.

On the same day, Islandsite  Investments transferred R9-million to the account of Confident Concepts.

25 January 2012

Pragat Investments transferred R1-million to Islandsite Investments’ account.

30 January 2012

Islandsite Investments transferred R1-million to Pragat Investments’ account.

30 March 2012

The department paid R4-million into Nulane Investments’ account.

4 April 2012

Nulane Investments transferred the same amount to its Bank of Baroda account. On the same day, Nulane Investments transferred R3.9-million from its Bank of Baroda account to Pragat Investments.

5 April 2012

Pragat Investments transferred R3.7-million to Islandsite Investments’ account. On the same day, Islandsite Investments transferred R3.9-million from its Bank of Baroda account to Pragat Investments’ account.

Tegeta Exploration and Resources, then owned by the Guptas, transferred R1.8-million to Islandsite Investments’ account. Immediately afterwards, Islandsite Investments transferred R8.8-million to Pragat Investments’ account. Pragat Investment immediately transferred the same amount to Nulane Investments.

3 July 2012

Nulane Investments transferred R8.8-million to the Bank of Baroda offshore account of Gateway Limited.

6 July 2012

Islandsite Investments transferred R10.2-million into Pragat Investments’ account. Pragat Investments immediately transferred that amount to Nulane Investments’ Bank of Baroda account. Then R10,188,792.00 was immediately transferred from the off-shore account of Gateway Limited.

In her testimony, retired Absa digital banking manager Linda Channing explained the banking system used by Sahara Computers, saying Atul Gupta was the sole system administrator with the power to add profiles or users to the system.

She testified in detail about the documents necessary for businesses to open a profile on the bank’s Cash Focus system for corporate clients, and the verification processes to be followed. She testified that several bank accounts and profiles were linked to the main account, including that of Pragat Investments.

No official charges against Atul Gupta have been listed on the charge sheet, but it alleges that he “managed and controlled the Gupta enterprise’s funds, including the proceeds of unlawful activities flowing into the bank accounts of the different entities, derived from fraudulent contracts with the Free State department of agriculture and rural development”. It further states that Atul Gupta is set to face criminal charges in connection with the trial and will be tried separately once he has been extradited from the United Arab Emirates.

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During cross-examination, Mike Hellens, legal adviser for Ronica Ragavan (also an accused) and Islandsite Investments, asked Channing if there was proof that Atul had made the electronic payments himself, or whether it was possible that those whose profiles were listed could have done so. Channing said it depended on whose profile was used and that someone could use another person’s login details.

Eight accused, including two former heads of the agriculture and rural development department, Peter Thabethe and Limakatso Moorosi, as well as Gupta associates Dinesh Patel and Iqbal Sharma, face charges that include fraud, corruption, money laundering and contravening the Public Finance Management Act.

Earlier last week, former Deloitte employee Herman Botha testified about alleged changes that were made to a draft report by the company for the feasibility study. According to the charge sheet, Nulane Investments — which was appointed by the Free State department of agriculture and rural development — did not have the capacity to conduct the study and subcontracted Deloitte to do it. The company was paid R1.5-million for the study.

Botha testified in main that the final report included a recommendation that an Indian company, Paras Dairy, was the preferred implementing agent for the development of a milk-processing plant in Vrede. 

Phone conversations

Legal representatives for the accused — who have all pleaded not guilty to all charges — pressed Botha about having had telephone conversations with his former manager at Deloitte, Omri van Zyl, before he took the stand.  Botha acknowledged that Van Zyl sent him emails to “refresh” his memory in preparation for his testimony. He said he also talked to Van Zyl after the latter’s testimony in the trial.

Botha’s testimony about being in contact with Van Zyl came after Acting Judge Nompumelelo Gusha made a default ruling preventing the media from live-streaming the trial, in an effort to stop witnesses following one anothers’ testimonies.

Several government officials have already taken the stand since the start of the trial two weeks ago, testifying that no procurement processes were followed in the appointment of Nulane Investments to conduct the feasibility study. Instead, a deviation memorandum had been written that punted the company as the sole service provider.

The trial is set down for six weeks. On Monday, the court is expected to hear testimony from some of the police officers involved in the investigation. DM