In a letter issued by President Cyril Ramaphosa on August 29, he said his administration's efforts to root out corruption were starting to yield results, with the Hawks reporting that, between the 2019 and 2022 financial years, 554 suspects had been arrested for corruption, 142 of whom were convicted.

The latest of those involved in wholesale corruption to be brought to book are those allegedly involved in State capture through the plundering of State-owned Transnet.

Asset management firm Trillian founder and financial institution Regiments shareholder Eric Wood, along with Albatime director Kuben Moodley appeared at the Palm Ridge court today, in Ekurhuleni, alongside former Transnet CEO Brian Molefe and CFO Anoj Singh, in connection with alleged fraud and corruption perpetrated seven years ago.

The disgraced former Transnet executives were arrested early in the morning along with former Regiments executive director Niven Pillay and former Regiments CEO Litha Nyhonyha. 

These suspects joined Moodley, Wood and former Transnet acting CFO Garry Pita and former Transnet treasurer Phetolo Ramosebudi, as well as Trillian co-founder Daniel Roy, in the dock on charges of fraud and corruption relating to Transnet’s procurement of 1 064 freight locomotives – a deal that cost South African taxpayers R189.2-million.

Nonprofit organisation Organisation Undoing Tax Abuse (Outa) has welcomed the arrests, stating that Molefe and Singh had much to account for when it comes to the billions of rands South Africa lost as a result of State capture.

“They were not only involved in State capture at Transnet, but also later at Eskom, the State’s crippled power utility. We are also happy to see that Outa’s referrals and submissions on State capture to the law-enforcement agencies contributes to the arrest of State capturers,” Outa CEO Wayne Duvenage said.

Solidarity has also welcomed the arrests after Solidarity filed criminal charges against Molefe and Singh at the Brooklyn Police Station, in Pretoria, earlier this year.

Solidarity said that, although these arrests are positive, justice had already been delayed for far too long, and that South African citizens deserved immediate action from the South African Police Service and other structures regarding other alleged State capturers.

“The absolute injustice of years of corruption and theft cannot continue any longer because of endless delays on the part of our criminal justice system . . . Continuous pressure must be exerted on our security services to do their job, and any further dragging of feet will not be tolerated.

“State capturers have robbed workers of their jobs and future and have stolen taxpayers’ hard-earned money. We cannot allow it," Solidarity CEO Dr Dirk Hermann said.

Solidarity contended that the damage caused by corruption was not limited to financial loss as it has also destroyed the State’s ability to provide essential services, while also breeding distrust among citizens towards the South African justice system.

“In order to purchase the locomotives, Transnet secured a $2.5-billion loan facility from the China Development Bank - the so-called CDB loan,” Outa State capture expert Rudie Heyneke explained.

The 2015 loan, of which $1.5-billion was drawn down, formed part of the financing for the purchase of the locomotives, of which some were purchased from the China State-owned locomotive manufacturer CRRC.

The balance of $1-billion was financed through a so-called “club loan” in South Africa. Investment banking firm JP Morgan was replaced by Trillian as the lead arranger and, for that, an additional R93-million was paid by Transnet to Trillian.

“The original accused appeared previously for irregularities on this transaction. The National Prosecuting Authority (NPA) has now also charged Molefe, Singh, Pillay and Nyhonyha for irregularities regarding the CDB loan,” Heyneke explained.

In August 2020, Outa submitted a detailed referral to the Investigating Directorate on how the Transnet executives ignored the advice of the former Transnet treasurer Eveline Makgatho that a loan from the CDB would be too expensive and that financing for the acquisition of locomotives from the Chinese original equipment manufacturers could be financed at lower rates and fees. 

Makgatho also warned Molefe and Singh that the CDB loan, as it stood, could be classified as a violation of the Public Finance Management Act.

Outa tracked the money flows and gave this information to the Investigating directorate. This information also outlined suspected criminal acts relating to the loan, involving Transnet officials and Gupta associates who arranged the loan at higher than market-rate interest rates, taking a pay-off of R189.240-million for themselves as “success” fee.

Outa’s submission explained how payments were taken for “facilitating” the CDB loan, with people who had no business with Transnet whatsoever receiving funds through an established and sophisticated money laundering network.

Outa’s submission had recommended prosecuting at least 17 people, including the nine who had now been arrested, as well as Atul Gupta, his wife Chetali Gupta – both of whom were directors of Sahara computers at the time, with Sahara receiving kickbacks from Kuben’s company Albatime – and Salim Essa, who received R20-million, and were involved with the planning and execution of the kickback.

Since Ramaphosa’s election to the Presidency, the Investigating Directorate in the NPA was set up to deal with serious corruption, along with the Special Tribunal to enable the Special Investigating Unit (SIU) to more easily recover stolen funds.

The Presidency has also provided support and resources to other critical crime-fighting bodies such as the Asset Forfeiture Unit (AFU), Specialised Commercial Crimes Unit and Directorate for Priority Crime Investigation – also known as the Hawks.

Through collaboration with key entities in the criminal justice system, the Investigating Directorate has enrolled more than 20 corruption cases in the last financial year and 65 accused have been charged. These include several State capture and other serious corruption cases, Ramaphosa said.

In the past financial year, the AFU obtained freezing orders to the value of R5.4-billion relating to corruption offences, with R70-million paid into the Criminal Assets Recovery Fund.

Over the past eight years, the SIU has recovered funds and assets to the value of R2.6-billion and set aside contracts to the value of R18-billion. A total of 119 cases worth more than R13-billion have been enrolled by the SIU at the Special Tribunal.

“Corruption is an extremely complex crime to prosecute. Perpetrators go to extraordinary lengths to cover their tracks.

“They set up shelf companies to hide dodgy transactions, rapidly moving monies between multiple accounts, misrepresenting income to the tax authorities, and, in the case of government employees, using friends and relatives to apply for tenders to mask their involvement. This means that the response of the authorities has to be just as sophisticated,” Ramaphosa explained.

In 2020, the government established a multidisciplinary Fusion Centre as an operational hub to address priority financial crimes, including corruption. The centre brings together the investigative capabilities of government’s crime prevention and security structures and those of the Financial Intelligence Centre, which develops intelligence for law enforcement agencies to use in their investigations.

Ramaphosa said that, in the last financial year, the work of the Fusion Centre supported 276 fraud and corruption investigations. About R659-million was restored to the State through preservation and recovery of the proceeds of crime, while about R613-million in suspected criminal proceeds were frozen.

The Fusion Centre was initially set up to investigate corruption around Covid-19-related procurement. Ramaphosa explained that its mandate was now being expanded to include money-laundering, fraud, maladministration, terrorist financing and other serious financial crimes.

“Another vital financial intelligence tool is the lifestyle audits conducted by the South African Revenue Service. Last year, Sars completed 25 lifestyle audits to the value of over R450-million to resolve discrepancies between declared income and an individual’s lifestyle,” the President said.

Ramaphosa added that he was announcing appointments to the National Anti-Corruption Advisory Council.

“The council will bring together stakeholders from across society to oversee the implementation of government’s anti-corruption strategy,” he explained.

The new body will advise government on the critical preventative measures, institutional capabilities and resources needed to prevent a recurrence of State capture and to stamp out fraud and corruption in South Africa, Ramaphosa said.