Legal tide turns against Brian Molefe, others in South Africa graft cases

Suspects involved in South Africa’s ‘state capture’ scourge, which flourished under former president Jacob Zuma, appeared in courts over the past week, charged with thievery of public funds in corrupt schemes.

Brian Molefe, former CEO of troubled national power producer Eskom and, before that, rail carrier and ports manager Transnet, became one of the most high-profile suspects to have appeared in court yet, along with alleged co-conspirators.

Molefe and the others appeared in the Palm Ridge Specialised Crimes Court in Johannesburg in connection with corruption and fraud of about $23.5 million at Transnet.

Once a ‘darling’ of the ruling African National Congress (ANC), Molefe still has potential corruption and related charges to face from his time as CEO of Eskom.

During his tenure, Eskom fell deeper into debt amid patently fraudulent practices, allegedly orchestrated by the infamous Gupta brothers, an immigrant Indian family named as key players in state capture corruption.

Two of the Gupta brothers were arrested in Dubai in June on an international warrant and are awaiting extradition to South Africa to face charges related to their dealings with Eskom, among their alleged state capture projects.

Molefe, along with another Transnet official, Anoj Singh, and directors of Regiments Capital are accused of violating laws on expenditure of public funds and of money-laundering, along with ‘state capture’-style corruption.

Arrest Warrants

Molefe and Singh appeared before then deputy chief justice Raymond Zondo during his nearly four-year-long probe into state capture corruption, with recommendations that the two be prosecuted.

The National Prosecuting Authority also confirmed that arrest warrants for Gupta-linked alleged state capture players Salim Essa and Ashok Narayan had been issued but not yet enforced as both are abroad.

The appearance in court of Molefe and his co-accused this week followed that of other Transnet executives and alleged private sector collaborators from Trillian Capital Partners and Albatime Investments, who were in court earlier this year on similar charges.

Already charged prior to Molefe were Transnet Group CEO Siyabonga Gama, former CFO and acting group CEO Garry Pita, and former treasurer Phetolo Ramosebudi, former Regiments shareholder and top Trillian executive Eric Wood, Trillian’s current director Daniel Roy, and owner of Albatime, Kuben Moodley.

Molefe also took another legal hit recently when he was ordered by the courts to pay back about $600,000 illegally received from Eskom’s pension fund, a matter that has been running in the courts since 2018.

While the list of names of those that President Cyril Ramaphosa promised to “clean out” of government and the public service is growing, there are many yet to be charged.

$2.2 million fraud

In late July, National Director of Public Prosecutions Shamila Batohi explained to frustrated South Africans that, while it had taken “some time” to begin to bring significant numbers of high-profile state capture players to book, it would “soon” be apparent to all that the prosecutions authority had been hard at work behind the scenes to bring the cases to courts.

The recent spate of arrests and court appearances, with more promised in coming days, indicate that the long wait for wide-scale action against systemic corruption is ending.

As further evidence that the legal tide has turned against alleged state capture players, on Wednesday, four suspects linked to a $2.2 million fraud at a Durban water plant in KwaZulu-Natal province appeared in the Specialised Commercial Crimes Court in that port city.

Included was the director-general in the KwaZulu-Natal premier's office and the former CEO of Mhlathuze Water, facing charges of fraud, corruption and money laundering.

In another instance, on Tuesday, former municipal managers were in court in Rustenburg, north-west of Johannesburg, over fraud, theft and related charges arising from the illegal sale of municipal property.

More arrests were expected in this case, said the Hawks, South Africa’s top criminal investigative body.

Back in Durban, where corruption ran rampant in the Zuma era, the former mayor of greater Durban (eThekwini), and a major power player in Zuma’s home region of KwaZulu-Natal, Zandile Gumede, has appeared in the High Court several times to defend herself against a raft of corruption charges.

'Number One'

Gumede, a leading Zuma supporter, and a number of municipal officials, ward councillors and business people are charged with racketeering, fraud and corruption, their case expected to return to court in mid-October.

‘Number One’, as former president Zuma was dubbed by those in his close circle during his nine years as South Africa and ANC leader, also faces mounting legal problems arising from corrupt conduct. The latest is that his Nkandla residence, a vast complex of buildings and facilities constructed with taxpayer money, has become the focus of failed bank VBS, which has been trying to get back a loan made to Zuma in 2016.

Without opposing the action, Zuma had a summary judgment against him this week, meaning the bank, now under curatorship, can seize over $382,000 of Zuma’s personal assets to pay back his bond.

Zuma also faces an ongoing corruption case involving 783 counts, including many of fraud and money laundering. They arose from a late 1990s arms deal in which he was alleged to have been promised, and then received, monthly kickbacks from one of the manufacturers involved in bidding for government armaments contracts.

He is also looking at a likely return to jail to finish his 15-month term, handed down for contempt by the Constitutional Court last year.

Zuma served only a short custodial sentence before being released on medical parole, against the medical parole board’s position, by a known close political ally who is still senior in the prisons department.

That move was declared illegal by the courts, and Zuma’s legal team has subsequently argued why he should not be returned to a jail cell, that decision pending any day.

His imprisonment in July last year led to widespread rioting, looting and arson attacks that left 354 dead and cost over $3.5 billion in damage, including to communications and other key infrastructure, some yet to be restored.