State plots fight-back after bruising Gupta judgment
Sources say an appeal is highly likely against a ruling that unfroze R250m in assets
The National Prosecuting Authority has suffered a third blow in its battle to prosecute Gupta family members, associates and businesses over the alleged Estina Dairy Project scam – but it insists that its first state capture criminal case is not in jeopardy.
Sources within the NPA have made it clear that the state is almost certain to challenge the ruling given by Bloemfontein High Court Judge Phillip Loubser on Monday, in which he reversed his own order to freeze R250-million in Gupta assets. It’s understood that challenge will focus on alleged “glaring errors of law” in that ruling.
The state had sought to preserve Gupta assets including 42 properties, luxury cars and a helicopter until it successfully convicted the Gupta brothers’ nephew Varun and other key players in their business empire on charges of fraud and money-laundering connected to alleged Estina criminality – and could then seek the forfeiture of these assets as a mechanism to recover the benefits of the alleged scam.Judge Loubser ruled that there were not reasonable grounds to conclude that the Gupta associates charged over the Estina scandal would be convicted, and hence he had to lift the order he had granted.
His judgment came after Judge Fouche Jordaan reversed an order he’d granted for the freezing of R180-million in Gupta assets that the state had claimed were the proceeds of crime linked to Estina. Jordaan found that, while certain transactions linked to Estina may be suspicious, suspicion was not enough to prove that the assets frozen could be the proceeds of crime.
The judge made reference to an affidavit from the Bank of Baroda, as well as Estina’s own bank statements, as a basis for that finding.
Then, on May 11, Bloemfontein Magistrate Jan Greyvenstein granted Varun Gupta’s application for access to his passport so that he could travel to India, and ordered that he be allowed to leave the country for that trip.Troublingly for the state, the magistrate’s key motivation in granting that application appeared to be his belief that the case against Varun Gupta was not a strong one, and hence the prospect of him going on the run was unlikely.
“The public opinion dictates that the mere mention of the surname of the applicant will ensure that he will stay grounded in South Africa. Fortunately for him that is not the test,” Greyvenstein said.
He pointed out that the state had admitted wrongly identifying Varun Gupta as an executive director of Oakbay Investments, when he was in fact a non-executive director of Oakbay Resources. While the state has implicated Oakbay Investments in the Estina saga, Oakbay Resources has not been charged.
“The question could then be asked: If the initial link was based on (Varun Gupta’s) link to Oakbay Investments, is there anything for him to answer but his surname?” the magistrate asked.
He added that, when he looked at the “relative strength” of the case against Varun Gupta, it was “game, set and match for the defence”.Despite these bruising rulings, the NPA’s Luvuyo Mfaku says the prosecutors pursuing the Estina charges are adamant that they do have a strong case, and has stressed that neither Judge Loubser nor Magistrate Greyvenstein had access to the full criminal docket in this case.
“I’ve spoken to the prosecutors in this case and they understand that the judge was not seized with what they have in terms of the evidence. Neither did the magistrate in the Varun Gupta matter have access to the full docket. This case is strong.”
Mfaku said the NPA was still waiting to study Loubser’s decision, and key officials would be meeting in Cape Town in the coming days to decide on the state’s next move.
It is however understood that prosecutors have already raised alarm about Judge Loubser’s application of the Prevention of Organised Crime Act to the case it made for the freezing of Gupta assets.
The state is also expected to pursue applications for asset forfeiture linked to the Estina Project in the coming days – which may include pursuing a preservation application in Dubai.