STATE CAPTURE PROSECUTION PROGRESS: TWO MAJOR MILESTONES
A number of people have been arrested or appeared in court over the last few weeks on charges relating to state capture and the abuse of our hard-earned taxes, giving us cause to celebrate. OUTA has a particular interest in the arrest of Eskom’s former head of generation, Matshela Koko, and the provisional court order for the sequestration of Eric Wood ,a former executive for Regiments Capital and Trillian Capital’s. OUTA’s investigations of the Gupta Leaks exposed both as instrumental in state capture. We laid criminal charges against Koko in 2017, and Wood was implicated in one of OUTA’s investigations into corrupt dealings and kickbacks being paid after Transnet secured a $2.5 billion loan facility from the China Development Bank.
Eric Wood, who helped execute the Guptas’ capture of Transnet and Eskom, was arrested in May for his role in setting up the Transnet loan at higher than market-rate interest rates, taking a pay-off of R189.240 million for themselves as “success” fee. Read more here. A provisional order for Wood’s sequestration was granted last week according to a thread by the amaBhungane Centre for Investigative Journalism last week see here. According to amaBhungane, “the Transnet Second Defined Benefit Fund says Wood owes Transnet pensioners R110-million. The Johannesburg High Court agreed that Wood has a case to answer for and moved to preserve Wood’s substantial assets.”
This follows a few weeks after Matshela Koko and seven other people were arrested on charges relating to a multibillion-rand contract between Eskom and Swiss engineering company Asea Brown Boveri (ABB) in 2015. Koko’s wife, two stepdaughters and a former close friend and director of the Leago Group, Thabo Mokwena, were among his seven co-accused. Read more here.
OUTA’s investigation of the Gupta mails (which was further exposed by the Zondo Commission) suggests Koko helped the Gupta’s buy Optimum Coal Holdings and its Optimum and Koornfontein coal mines from Glencore by using his position. This was done by putting these businesses under financial pressure to force their sale. We laid criminal charges of corruption and fraud against Koko relating to the Optimum transactions in 2017 (see here) and we are confident that these charges will be added to Koko’s charge sheet in due course.
OUTA also welcomes the promise of more funds for opposing state capture in the medium-term budget policy statement announced by the Minister of Finance. This includes the Department of Justice and Constitutional Development reprioritizing funds to the Financial Intelligence Centre in order to implement the recommendations from the State Capture Commission and the Financial Action Task Force, and funding to increase capacity in the NPA’s specialised tax units, Investigating Directorate, and to fund specialist services in the NPA. “Additional funding will help the NPA to acquire top legal minds and forensic experts to assist in these corruption cases,” says Rudie Heyneke, OUTA’s state capture portfolio manager.