Batohi questions magistrate’s decision to strike Koko case off the roll

National director of public prosecutions Shamila Batohi on Wednesday said the decision by a Middelburg regional court magistrate to strike the fraud and money-laundering case against former Eskom chief executive Matshela Koko off the roll was questionable.

Asked about the case at a media briefing, Batohi said magistrate Stanley Jacobs’ decision to strike the case off the roll for unreasonable delays was the harshest option he had at his disposal.

“In that particular case, the magistrate could have made one of several orders. Several. He took the most drastic order of striking off and we must ask the question why,” she said.

She added that the National Prosecuting Authority (NPA) was, as a rule, cautious not to openly criticise court rulings.

“But in this case, it is a fact that various orders could have been made. The most drastic one was made and now there may be an understanding of why that was the case.”

Batohi was referring to the fact that since Jacobs made the ruling in November last year, it has emerged that he failed to disclose his history of business dealings with Eskom.

News24 reported that he was a director and shareholder of a company called BEP African Consulting. He reportedly resigned as a director in 2001 but was reappointed in 2008. The company had secured a number of small contracts to supply material to power stations.

Koko was arrested at dawn on 27 October 2022 for seeking to derive personal benefit from contracts at Kusile power plant awarded to the local affiliate of Swiss engineering firm Asea Brown Boveri (ABB).

But a year later, the NPA was not ready to proceed to trial.

Defence counsel demanded an inquiry in terms of section 34(2) of the Criminal Procedure Act after the prosecution asked for another postponement to obtain six outstanding witness statements from abroad — three each from Germany and the United States — and to await a finalised forensic report, plus a separate data analysis report.

At its conclusion, Jacobs struck the case against Koko and seven co-accused off the roll and cautioned: “Matters don’t just get enrolled in the regional court or the high court for purposes of investigation.”

Advocate Tiny Seboko, the junior counsel enlisted to lead the prosecution, had argued that the investigation was nearly complete, but Jacobs said the state could surely do nothing without the forensic report detailing the money-flows between the suspects.

He was exasperated at the unwieldy scope of the investigation, given that the data being perused by the investigating officer amounted to 18 gigabytes, or a “mind-boggling” billion pages, and said the court was not a warehouse for cases not ready for trial.

It marked the second time in seven months that the NPA’s Investigating Directorate was unable to sustain money-laundering charges in what are considered entry level state capture cases. 

In April last year, the Nulane Investments trial ended in the discharge of key associates of the Gupta brothers.

There the Free State high court held that the state failed to pass the barest threshold to prove that Iqbal Sharma, Ronica Ragavan, Dinesh Patel and a clutch of Free State officials colluded to defraud the province of more than R24 million. 

The NPA is appealing that ruling.

“That was probably one of the most scathing judgments I have ever read in my life,” Bathoi said of Acting Judge Nompumelelo Gusha’s ruling.

She said the NPA and the Investigating Directorate were trying to draw lessons from the setbacks.

“We more than anyone know the risks that these cases are to the NPA and we cannot simply say ‘well, we did everything fine’, that there is nothing we could have done differently and blame everyone else for it.

“We have to have very hard, difficult conversations with ourselves to make sure that we learn from what went wrong and make sure that we put in place interventions to make sure that the risk of that happening again are minimised.”

Andrea Johnson, the head of the ID, said the directorate did not believe it could be “flippant” about the losses it had suffered and had done extensive soul-searching.

“We have taken lessons. Because that is the reality, you can’t have a repeat but you will have a repeat if you do not have that internal introspection and very difficult discussions with the team that was involved.”

In the Nulane case, the prosecution stumbled at the first hurdle because it was unable to prove that Free State officials broke the law and illicitly awarded a contract worth for a feasibility study to Sharma’s newly founded Nulane Investments. 

Without proof that the money was stolen, it was then hard-pressed to sustain the charge of money-laundering in relation to the myriad transfers that followed between companies in the Gupta brothers’ business empire.

But questions were asked as to why it could not adduce evidence from Bank of Baroda records at its disposal to prove the fraud that eventually paved the way for the Vrede Dairy Farm scandal.

On Wednesday, Johnson said the directorate was still severely understaffed, with only 20 members, and that it was waiting for President Cyril Ramaphosa to promulgate the National Prosecuting Authority Amendment Bill which conferred permanency on the entity to enable it to recruit more staff.

The bill was sent to the president for assent last month after it was approved by the National Council of Provinces.

Observers have cautioned that the Investigating Directorate’s challenge was not simply to recruit more staff but to find people with the skill to prosecute complex financial crimes.