Opinionista Wayne Duvenage 29 May 2018

Estina Dairy farce: Has the Asset Forfeiture Unit lost its way?

On the face of it, following three recent successive losses by the Asset Forfeiture Unit (AFU) on matters related to the Guptas on the Estina Dairy farce, something appears to be amiss in the state of the AFU.

This week’s setting aside of a R250-million forfeiture order by Judge Philip Loubser in favour of the Guptas is a blow to the NPA, sending ripples of concern through the corridors of civil society.

With so much having been reported on the laundering of at least R230-million from the Estina Dairy Farm scam that benefited the Guptas through various guises, one can be forgiven by the shock and surprise of the judgment, given the scrutiny of money flows and revealing exposure by amaBhungane and Scorpio’s #GuptaLeaks. The question is: did the judge get it horribly wrong, or did the AFU bungle the case?

To put it bluntly, this outcome was the result of a poorly prepared case by the AFU which came across as a rushed job. Cases of this nature require much more than a mere legal argument. A judge of good standing is not going to rule in favour of the state, even if it is the notorious Gupta family, unless the facts presented are compelling and supported by the necessary detail required of a thorough forensic audit.

All indications point to an overzealous AFU which appears to lack the necessary skills and co-ordinated support from the Hawks, SAPS, FIC, NPA and SARS to assist them in these cases.

The purging and loss of forensic audit skills and experience within the enforcement authorities during the Zuma era is now being being played out in the recent failures by the state to deliver on what ought to be winnable cases.

Formed in 1999 as part of government’s modernisation of fighting organised crime under the leadership of Advocate Willie Hofmeyr, the AFU was quick off the mark with a host of preservation orders running into billions during its early years. The powers given to the AFU enables the “freezing of assets” which are either the proceeds of crime or assets purchased with such proceeds. Upon successful conviction, frozen assets are forfeited to the state. It’s a powerful and effective process when tackling organised crime.

Both freezing and forfeiture orders require extensive and specialised skills and capabilities to draft compelling forensic financial audits. ‘Normal’ investigators and prosecutors are generally not the most suitable people for such work.

Following the money takes a special skill and breed who get a kick out of forensically demonstrating – from the moment a crime happens – how the proceeds and money flows were handled, step by step, all the way. Their work needs to expose the tracks that have been skilfully covered by organised financial criminals. This is work that can’t be rushed and requires 100% accuracy.

Another recent example of a rushed and underprepared AFU took place in March 2018, when they sought an urgent preservation order to attach the Gupta mines’ rehabilitation funds. These were not the proceeds of crime and OUTA’s legal team had already filed a strong application at the end of 2017, to prevent R1.7-billion worth of mine rehabilitation funds from being tampered with by the Guptas.

The AFU’s application caused some confusion as to what should happen to the funds and, simply put, was an unnecessary move that jeopardised OUTA’s case which had already frozen the funds.

Fortunately the matter was resolved through OUTA’s presence at the AFU hearing, enabling a settlement in favour of OUTA while preventing the AFU’s potentially damaging case from being ventilated.

When joining the dots of recent AFU cases, a picture emerges of an entity that means well, but lacks the wisdom to ensure that sufficient time, effort and sophistication is invested in building strong, convincing cases.

In the Estina matter, this was evident in Judge Loubser’s comment about the inability of the NDPP to demonstrate to court the very basic elements required for the order to stand.

The Estina matter and a host of other cases have been waiting for attention, interrogation and investigation for years. Why has it taken the AFU so long to react? The longer they wait, the harder it is to follow the money.

Hopefully, this week’s blow will be the wake-up call needed by the NPA, AFU and the police.

President Cyril Ramaphosa has called upon the enforcement authorities to recoup the losses resulting from State Capture. Now is the time to round up the teams, to recover past capabilities and reinvigorate the track records we are capable of to fetch the proceeds of crime from the perpetrators.

The AFU needs to regroup and reflect on what has gone wrong. They need to meet with their counterparts in the Hawks, SARS and the FIC to assemble a national priority corruption task team, if they are to tackle the hundreds of cases that have piled up over the years.

Combined effort applied with greater co-operation and a broader skill set will deliver a number of easy cases to set the AFU and the NPA on a winning streak.

Every day wasted is a day the money moves further out of the reach of government. DM

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