Seven of the eight accused in the first State Capture case applied for discharge in the Bloemfontein High Court on Friday. The eight stood trial on allegations ranging from fraud to money laundering in connection with a R24.9-million feasibility study that led to the controversial Vrede dairy project. The project cost the Free State Department of Agriculture and Rural Development R280-million.

According to the charge sheet, the department appointed a Gupta-linked company – Nulane Investments (an accused) – to do a feasibility study, although it did not have the capacity to do so. It then subcontracted Deloitte to deliver the service for R1.5-million.

Read more in Daily Maverick: “Nine months and counting — no sign of a Gupta, no word from justice department”

It is further alleged that the department did not follow procurement processes and instead wrote a deviation letter stating that Nulane Investments was the sole service provider.

The accused include two former Free State Department of Agricultural and Rural Development heads of department – Peter Thabethe and Limakatso Moorosi.

Others in the dock include Iqbal Sharma, Dinesh Patel and Ronica Ragavan, the then chief financial officer of the department, Seipati Dhlamini, and a second company – Islandsite Investment One Hundred and Eighty.

Moorosi was the only one who did not file an application for discharge and instead opted to close the case. 

Arguments for a discharge

Mike Hellens, representing Islandsite Investments and Ragavan, said in his argument for discharge before Acting Judge Nompumelelo Gusha that his clients had no case to answer. He said the state did not provide any proof of interaction between Nalune Investments and the provincial department that linked to his clients. His clients did not participate in any misrepresentation to the department.

Hellens said Shadrack Cezule, who turned state witness, admitted in his testimony that there was no misrepresentation, but rather an error of judgement. On allegations of money laundering, Hellens said they could not be substantiated if his clients had no knowledge of whether or not the money was unlawfully sourced.

Hellens said both financial investigators who testified had conceded all transactions were noted and nothing was hidden and one could follow an unconcealed and undisguised trial of money. He called the investigation “goal-orientated” and said it only started tracking the money trail when the Free State Department of Agriculture and Rural Development made its first payment to Nulane Investment.

Kenny Oldwadge, representing Patel, asked how the state felt it appropriate to draft an indictment without establishing the facts. The deviation was in accord with the Public Finance Management Act.

He pointed out that there had been no problem for 10 years. The investigation of the case had a single goal in mind – to achieve a conviction. He said the state had failed to prove its allegations and there is no shred of evidence against his client.

“The state’s case is dead and a funeral procession has started,” said Oldwage. 

Limakatso Moorosi, Seipati Dlamini, Iqbal Sharma, Ronica Ragavan and Dinesh Patel appear at the Bloemfontein High Court on January 23, 2023. (Photo by Gallo Images/Volksblad/Mlungisi Louw)

Legal representative for Sharma and Nulane Investments, Bronwynne Forbay, said the state had made bold allegations in its indictment that Sharma was an associate of the Gupta family, but presented no evidence of this.

He said there was no evidence his clients had been involved in the “plotting” of an elaborate scheme. 

Further, the witness who compiled the deviation did not implicate himself in any wrongdoing. He said he had made an error of judgement. He said the state had gone on a wild goose chase, starting with assertions about a private-public partnership, when there was no such thing.

Forbay added that the State referred to documents that were found to be inadmissable in this court. He said the State was aware most of the evidence was provisionally placed on record, but did not make a prima facie case. 

Willem Edeling, representing Dhlamini, asked the court to go back to basics. What is the charge? What is the case the State must prove? Who is the complainant in this matter? He said the State’s “star witness” testified that nothing happened for years, until the investigating officer, Mandla Mtolo, came into the picture.

Edeling said he knew Cezule, a supply chain manager in the provincial department, was a suspect before contacting him. “That’s where the bicycle’s wheels fall off,” he said.

Edeling said Cezule had been ambushed and threatened to turn state witness. He said the allegations against Dhlamini were subject to an internal disciplinary process and such actions were only a crime when gross negligence was found.

Read more in Daily Maverick here: Vrede dairy project – legal defence prevents testimony about #guptaleaks in Free State corruption trial

Daniel Mantsha, representing Thabethe, said after more than a year of investigation, another year of setting the matter down for trial and four weeks of evidence before the court, with the State insisting there was a case to be proven, it now conceded in answering head of arguments that his client was entitled to a discharge. 

He said the State knew all along that there is no case of contravention of the Public Finance Management Act against Thabethe. Mantsha said his client was not the accounting officer at the time yet the State persisted with the case. Mantsha said this was a well-choreographed and executed move to bring the accused before a court.

“This is not just a prosecution to get to the accused (Thabethe). You don’t ruin  someone’s life for two years; an astute public official in his previous life. Then you ruined their lives making false accusations,” he argued.

Court proceedings during the court appearance of Limakatso Moorosi, Seipati Dlamini, Iqbal Sharma, Ronica Ragavan and Dinesh Patel at the Bloemfontein High Court on January 23, 2023. (Photo by Gallo Images/Volksblad/Mlungisi Louw)

Mantsha said for the state to show fraud had been committed it had to rely on Cezula’s evidence and he had never spoken to Thabethe while compiling the deviation memorandum.

The State opposes discharge

The State opposed the discharge applications.

Senior State Advocate Peter Serunye said there had been no procurement procedures. All senior government officials on trial signed off on a deviation and could have said they are not signing it because it was not in accordance with the law.

Serunye said Cezula had said in his testimony that he was just trying to do his job. He further said his superior gave him an instruction and he had made an error of judgment. 

Serunye said Cezula had explained that he had to do this or be seen as insubordinate. He said downplaying Cezulu’s testimony was not going to help. The accused had all acted in common purpose to defraud the department. The accused were given a R24.9-million tender without any communication between the department and Nulane Investments.

“Why give a tender if he did not apply for it?” asked Serunye. He said all of the accused had acted with one purpose and one goal – to defraud the department.

He recounted how Thabethe had said he signed an invoice for R8-million. Why did Moorosi pay Nulane Investments if there was no contract with the company. Serunye also asserted that the accused overcharged the government.

Bail conditions relaxed

After closing arguments by the State against these applications, Forbay indicated that Sharma had agreed with the State that his bail conditions be relaxed.

His client was initially released on bail on 14 July 2021 on condition that he reported to Sandton Police Station on Mondays, Wednesdays and Fridays and that he did not travel outside Gauteng. After requesting the State to allow his client to report only once a week – on Mondays – and to travel freely in the country, the State agreed.

Serunye said the State was willing to relax these conditions but warned Sharma that he was not allowed to travel outside the country. 

The court reconvenes on 12 April, when judgment is expected to be delivered. DM