SCA overturns Nulane accused’s acquittal and orders retrial

The Supreme Court of Appeal (SCA) has overturned Bloemfontein Judge Nompumelelo Gusha’s decision to summarily acquit all the accused in the R24.9 million Nulane Investments fraud, money laundering and corruption scam, saying she committed “numerous errors of law”.

SCA Judge Cagney John Musi handed down judgment on Thursday, saying the leave to appeal has been granted.

“It is ordered that the respondents may be retried for the same offences in respect of which they were acquitted by the Free State High Court on 21 April 2023, as if they had not previously been arraigned, tried and acquitted: provided that a different Judge shall preside over the trial”.

Nulane scam

The Nulane scam case was one of two matters in which the state tried and failed to seek the extradition of Atul and Rajesh Gupta from the United Arab Emirates (UAE).  

The case is based on allegations that R24.9 million was paid to Nulane Investment – a company owned by Sharma – to conduct a feasibility study for the Free State province’s flagship Mohoma Mobung project, which paved the way for the controversial Estina/Vrede dairy project.

Nulane was contracted by the provincial government on the basis that it had unique skills to perform the work.

The state alleged that Nulane, however, had no employees on its books and in fact subcontracted Deloitte to produce the report, for which Deloitte was paid R1.5 million.

It’s alleged that the only change made to the Deloitte report was to identify Paras Dairy as a suitable implementing partner for the development of a milk processing plant in Vrede.

ALSO READ: SCA asked to dismiss state’s appeal on Nulane case amid questions about witness’s testimony

Acquittal

In April 2023, seven of the eight accused, including former Free State government officials Peter Thabethe and Seipati Dhlamini, along with Nulane Investments director and Gupta associate Iqbal Sharma, successfully applied to be discharged under section 174 of the Criminal Procedure Act (CPA) in the Free State High Court in Bloemfontein.

High Court Acting Judge Nompumelelo Gusha also found former head of the Free State Department of Agriculture and Rural Development, Limakatso Moorosi, not guilty, and she was acquitted.

Gusha, in her judgment, criticised the state’s investigation and concluded that the testimony of the state’s sole witness, Shadrack Cezula, who had been the acting supply chain manager at the Free State Department of Agriculture, was “evasive”.

She concluded that the state had failed to prove its case against the accused before the court.

‘Errors of law’

However, the National Prosecuting Authority (NPA) appealed the matter.

The NPA’s Investigating Directorate Against Corruption (IDAC) maintained that Gusha erred on several key legal questions, which the SCA on Thursday concurred with.

“The High Court made numerous errors of law that resulted in the acquittal of the respondents. This is unfortunate, particularly in a case such as this, where it was prima facie established that scarce public funds were unlawfully extracted from the Department and channelled to the UAE, by fraud and the misuse of power.

“This subverted the aims of the Project to generate income through farming and alleviate poverty, undermines the functionality of democratic institutions, and endangers the rule of law. The trial in the High Court can be summed up in a single sentence: This was a failure of justice. Regrettably, this erodes public confidence in the criminal justice system.” Musi ruled.

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NPA welcomes judgment

The NPA welcomed the SCA ruling, saying the judgment paves the way for IDAC to reinstate the case within a reasonable period.

NPA spokesperson Mthunzi Mhaga said the prosecution body remains resolute in its stance of effectively prosecuting and holding accountable those responsible for state capture-related corruption.

“Beyond this important case, IDAC has made significant progress in its efforts to ensure accountability for serious and complex corruption and related crimes stemming from the state capture era.

“It has enrolled 50 cases, declared 133 investigations and partnered with the Asset Forfeiture Unit to obtain freezing and preservation orders amounting to R14.3 billion with R8.2 billion in confiscation orders deposited to the Criminal Asset Recovery Account (CARA),” Mhaga said.

Mhaga said convictions in complex corruption cases take time, and not just in South Africa.

“The NPA is making steady and important progress in this endeavour and will continue to execute its mandate without fear, favour or prejudice”.

ALSO READ: NPA says it will reinstate Estina dairy farm case after it was struck off court roll