13 officials to face Nkandla music - report

2014-07-20 18:09

Nkandla (Giordano Stolley, Sapa)

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Caiphus Kgosana and Xolani Mbanjwa, City Press

Johannesburg - Thirteen officials, some of whom sat on the committee that decided who to award the Nkandla refurbishment contracts to, have been charged in an internal disciplinary hearing for maladministration related to the R246m upgrades to President Jacob Zuma’s rural homestead, City Press reports.

The Special Investigating Unit, which conducted its own investigations into the Nkandla upgrades scandal, recommended to Public Works the names of officials to be charged in connection with the saga.

They are facing charges related to procurement irregularities and transgressing provisions of the Public Finance Management Act and failure to follow supply chain prescripts.

More officials are expected to face the music in the next coming weeks in connection with Nkandla, according to Public Works Minister Thulas Nxesi.

Although the department was reluctant to provide the names of those charged - “to avoid jeopardising the legal process” – some of them are senior managers who sat on the Bid Adjudication Committee that decided on the awarding of tenders for the Nkandla refurbishment.

But there are fears that government officials are being made scapegoats while those who actually benefited financially from the upgrading of Nkandla might get off lightly.

Instituting charges against government officials also raises serious questions about whether Public Protector’s Thuli Mandonsela’s findings that Zuma and his family benefited unduly from the upgrades – and that the President must repay a portion of the non-security related costs – will be acted upon.

Public Works said it was acting on recommendations of the task team established by Nxesi to probe Nkandla irregularities and not on Madonsela’s report.

'No official is made a scapegoat'

Nxesi’s legal advisor Phillip Masilo dismissed the idea of officials being made scapegoats: “No official is made a scapegoat, everyone should account for his or her role in the project. Everyone found to have done anything wrong will be dealt with irrespective of the position.

“It should be noted that SIU is investigating everyone including politicians. It is not clear who is a 'bigger fish' however it is a fact that senior officials who were involved at the inception of the project are no more in the department eg Mr Solly Malebye [former DG], Mr Sam Vukela [former Acting DG], Mr Rachard Samuels [former COO], Ms Cathy Motsisi [former CFO], Mr Khanyile [former Regional Manager]. All left the department for various reasons,” Phillip Masilo, Nxesi’s legal adviser.

He did not mention any moves to get Zuma – who has denied benefiting form the upgrades – to pay back some of the money as recommended by Madonsela.

Nxesi’s legal advisor Philip Masilo said those charged were senior people within government. He said, however, that they had obtained legal advice not to release their names at this stage.

“We can’t mention their names or ranks but some of them were in the Bid Adjudication Committee. All of them will have to answer,” he said.

No suspensions needed

Masilo said the Special Investigating Unit first gave them five names, but later added more names to arrive at thirteen officials who have serious questions to answer on how the Nkandla procurement process was followed. He said the officials had not been suspended and would face charges while still on duty.

“They haven’t been suspended. There’s no need. It’s believed their presence [at work] will not jeopardise the investigation,” Masilo said.

Zuma has already missed a deadline to submit a comprehensive response to Parliament on how he plans to act on Madonsela’s recommendations. He has consistently said he is waiting for the SIU to conclude its investigation before he responds.

Meanwhile two directors of Public Works’ Prestige Portfolio, which deals with accommodation for ministers and senior government officials, have been dismissed for irregularities related to the R60m renovations of ministerial homes in Pretoria.

Noloyiso Ntwana and Vusi Mashiane were charged and dismissed after the SIU found that a contractor renovating ministerial homes in Pretoria had been paid an extra R2.6m without supporting documentation.

The SIU is also investigating why the price tag for the renovation of ministerial homes in Cape Town came in at R100m. Nxesi said he would report to Parliament on this matter once that investigation is complete.

A decision has been taken to cap costs for the renovation of state-owned houses at 30% of the market value of the property.

This is to avoid cost overruns on the refurbishment of ministerial properties. It emerged that R15m had been spent on renovating a house in Cape Town for Rural Development Minister Gugile Nkwinti, much more than the property’s actual value.

Nxesi said due to the expansion of cabinet, they would need to lease or buy additional property to accommodate new ministers.

Public Works spokesperson Thami Mchunu said six members of the executive were still awaiting houses. He estimated that it would cost the state R2.5m per annum to find accommodation for each of them.

Mchunu could not say where they are accommodated at the moment.

- City Press
Read more on: thulas nxesi | jacob zuma | gugile nkwinti | sam vukela | nkandla upgrade

New SA visa rules force 250,000 Zimbabweans to decide on returning home

Sapa-AFP | July, 2014 09:17

Zimbabweans stand in a long queue at a Home Affairs office in SA when a deportation deadline loomed. File photo.
Image by: ESA ALEXANDER
Strict new South African immigration laws have sparked confusion and panic among foreign residents in this "Gateway to Africa" and forced 250,000 Zimbabweans to decide whether to return home.


Discussion on new immigration regulations continues: Gigaba Discussion on new immigration regulations continues: Gigaba
Walk down most streets in Johannesburg and you will hear accents and languages from across this vast African continent.

Builders by the roadside waiting for work chatter away in the sweet sing-song rhythm of African Portuguese, waiters stand and gossip between orders employing the rolling Rs and whistles that mark out Shona, a language of Zimbabwe and southern Zambia.

Congolese, Somalis, Nigerians, Mozambicans and above all Zimbabweans, flock to the "City of Gold" in search of their own little slice of the riches of the Highveld, as the surrounding region is known.

Since the 1880s, when Johannesburg exploded to life with the discovery of vast gold deposits, this has been a city, and a country, of immigrants.

"Shosholoza", perhaps South Africa's most beloved song -- belted out at sporting events, political rallies and anywhere more than a handful of people gather -- originally came from the Zimbabwean workers making the train journey south to work the mines.

But today the South African authorities, wary of the inflow amid brutally high unemployment, have begun tightening visa regulations and closing loopholes.

New rules quickly snapped into force shortly after the country's May election, catching scores of expatriate workers of guard.

A German doctor waiting six months for the processing of her residence permit was banned from returning to South Africa for five years for overstaying her tourist visa.

A Briton was stranded in London, separated from her husband and 18-month-old child, after being declared an undesirable immigrant for a similar reason.

There are fears the new rules may hit the vital tourist industry. Immigration consultants have lodged a slew of court cases challenging the laws, which they say are unconstitutional.

Haniff Hoosen, an opposition Democratic Alliance lawmaker, said "the new regulations have already ripped apart families, dissuaded investors, and led to the suspension and even cancellation of multi-million rand film and tourism ventures."

But the most far-reaching implication may be felt by the more than a quarter-of-a-million Zimbabweans who fled the political and economic crisis at home after disputed elections in 2008.

They were granted special permits that expire later this year.

According to the new laws, if they want to continue living in South Africa they will have to return home to apply for extensions.

"Sending 250,000 back just to extend their permits doesn't make sense," said Bernard Toyambi, the paralegal officer of the non-governmental organisation the People Against Suffering, Oppression and Poverty.

"How will they keep their jobs? How long does the process take?"

The worst fear is mass deportations if no special political deal is secured.

"It's like they're chasing us out, they're killing us," said Sascha Madipa, 28, a Zimbabwean immigrant in downtown Johannesburg.

The rules have "created such an element of uncertainty, uneasiness among the people. It's like doomsday," said Gershon Mosiane, an immigration lawyer and president of the Forum of Immigration Practitioners (FIPSA).

"These people were not given ample time, and to declare a person undesirable, our position is that it is arbitrary and is against the principle or the rule of law... that a person is innocent until proven guilty," said Msiane.

South Africa has promised to make a decision on the status of the Zimbabweans, with immigration chief Apleni Mkuseni saying they should "wait patiently and with no panic".

But new South African Home Affairs Minister Malusi Gigaba signalled a less sympathetic stance.

"Workers from other countries, and I dare say Zimbabwe, have flocked to South Africa seeking asylum. We must ask: Is there a conflict in Zimbabwe which necessitates that Zimbabwean nationals must apply for asylum in South Africa?" he asked.

With Zimbabwe's economy still spluttering, unemployment unofficially estimated to be as high as 80 percent, a fresh financial crisis looming and president Robert Mugabe recently returned to power for another term, many Zimbabweans are reluctant to return home.

A Zimbabwean opposition politician, Ngqabutho Mabhena of the Movement for Democratic Change, who helped negotiate the special permits, has been talking to South African officials about the looming crisis.

"Our guess is that the majority of the people will want to re-apply because after the 2013 election in Zimbabwe, no Zimbabwean that we have spoken to wants to go back," said Mabhena

Over one hundred years after Johannesburg sprung up from the dust, Zimbabwean workers may again be making a journey, this time northward and homeward, leaving behind a city that is a little less cosmopolitan.

Sita defends award of R10m deal

July 20 2014 at 01:26pm
By SAPA

Comment on this story
Mzwandile Petros
Independent Newspapers.
Former Gauteng police commissioner Mzwandile Petros. Picture: Nicholas Thabo Tau.

Johannesburg - The state information and technology agency (Sita) has defended its decision to award former provincial top cop Mzwandile Petros' company a R10 million deal to recover three stolen laptops, the Sunday Times reported.

“The minister (then Lindiwe Sisulu), the chairperson and I took a decision to appoint the company - even though it wasn't on our database or had a track record - because we needed someone with experience in the police - someone who can link the information quickly and someone we can trust,” Sita chief executive Freeman Nomvalo told the newspaper.

“You must understand that the burglary wasn't a pure crime. It was done by highly trained people,” he said.

iFirm, the company belonging to Petros - the former Gauteng police commissioner - was hired in March to investigate a burglary at the Sita offices in Centurion that had taken place on February 28 in which three laptops were stolen.

Soon after being awarded the deal - the company was then paid R3 million - before it had even obtained a VAT number.

Petros confirmed to the Sunday Times that his company only obtained a VAT number after receiving the initial R3 million.

“When the first payment of R3 million was made, there was no VAT number and subsequent to that the VAT was applied for. It's a section done by SARS and the VAT number was given.”

Meanwhile, Nomvalo declined to disclose who had recommended Petros' company.

Petros served as Gauteng commissioner for nearly three years. Previously he was the provincial commissioner of the Western Cape for seven years. - Sapa

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THE FORMER SCORPIONS CRIME FIGHTING UNIT ..........

Merging with the police
The ANC decided to merge the Scorpions with the SA Police Service following the Khampepe Commission by June 2008, reducing their power.The disbandment was recommended by South Africa's minister of safety and security, Charles Nqakula.

The decision was controversial, and was opposed by a majority of South Africans and interest groups ranging from opposition parties to organised business. The Democratic Alliance has accused the ANC of merging the Scorpions with the South African Police Service in order to subvert investigations into the SA Police and protect corrupt ANC officials.

On 23 October 2008, the South African parliament officially abolished the Scorpions. The vote was 252 in favour with 63 against. Preparations were made for the remaining Scorpions members to start work in the Police's Directorate for Priority Crime Investigation (DPCI). This unit is known as the Hawks.

Subsequently, the Hawks shut down the probe the Scorpions had been conducting into bribery among Zuma allies in a multibillion-rand arms deal.

Constitutional Court ruling
The South African Constitutional Court ruled that the legislation, which replaced the Scorpions crime fighting unit with the Hawks, was “constitutionally invalid”. The reason being that the Hawks are “vulnerable to political interference.”

This case was brought to trial by a private individual (businessman Hugh Glenister) using his own personal money (ZAR 3.5 million) to fund the case. The money retrieved from the victory is to be placed into a trust for use on similar cases in future.

The judges in the matter were: Judge Dikgang Moseneke and Judge Edwin Cameron. They have suspended the effect of the judgement for 18 months to allow time for parliament to take remedial action.

In response the South African Parliament passed the SA Police Service Amendment Act, however a Court judgement by the Western Cape High Court again found that the Act does not go far enough to secure independence for the Hawks.

The Scorpions vs The Hawks- A Royal Battle
The Constitutional Court judgment handed down on Thursday last week involving Glenister versus the President of the Republic of South Africa, is undoubtedly a landmark judgement that is likely to spawn important political and constitutional consequences. It is probably one of the most significant, if not the most important judgment, handed down by the Constitutional Court, since its inception in 1994. The fundamental issue in this case is whether national legislation that established the Directorate for Policy Crime Investigation, colloquially designated as the Hawks (DPCI), and simultaneously disestablished the Directorate of Special Operations, known as the Scorpions(DSO), was unconstitutional or not.

In a bold, convincing and well reasoned judgment, Deputy Chief Justice Moseneke and Judge Cameron, in which three other Constitutional Court judges concurred, for the majority of the Court, ruled that Chapter 6 of the South African Police Service Act 68 of 1995 as amended, was incompatible with the Constitution in that it fails to secure a sufficient degree of independence for the DPSI. In this regard the Court made two cardinal findings:
Firstly, it holds that the Constitution obligates the state to establish and maintain an independent body to combat corruption and organised crime. This seminal obligation can be clearly inferred from both the Constitution and international law treaties which are binding on the South African state. The Court was at pains to declare that endemic corruption undermines the very fabric of the rights, enshrined in our Bill of Rights and thereby imperils our fledgling democracy. Furthermore, the Court points out that a raft of international law instruments dealing with the combating of corruption have been approved by our Parliament and are consequently binding on the state. These require an anti-corruption unit that is sufficiently independent and that the DPSI is manifestly wanting in this regard.
Secondly, the Court held that the DPSI was not sufficiently insulated from patent political influence in its structure and functioning. The reason for this is that the relevant legislation requires that the DPCI's activities must be co-ordinated by the Cabinet and that a Ministerial Committee may determine policy guidelines in respect of its functioning, as well as national prosecuting offences. By the very nature of such oversight, it was held that the DPSI is vulnerable to political interference and inimical to genuine independence. It also found that the members of DPSI lacked the kind of security of tenure required for such independence.


The Court therefore upheld the appeal, and declared the offending provisions establishing the DPSI constitutionally invalid and suspended the declaration of invalidity for 18 months in order to give Parliament the opportunity to remedy the defect.

In a minority judgment delivered by Chief Justice Ngcobo, in which three other Constitutional Court judges concurred, it is held that the Constitution does not obligate the state to establish an independent corruption-fighting unit. He held further in his judgment that there were indeed sufficient institutional and legal mechanisms to prevent undue interference and guarantee the independence of the DPSI. The judgment lacks the perceptive insight and profundity of the majority judgment.

The majority judgment is a singular victory for constitutional democracy in South Africa. It is also an exceptional and exemplary triumph for Mr Hugh Glenister, his Counsel and their attorneys, who have expended a vast some of money (about R3.8 million) and energy in a titanic litigation struggle against corruption in order to protect and advance the cause of the fundamental values encapsulated in the Constitution. South Africa is profoundly indebted to this public spirited man, who as a libertarian, has demonstrated in no uncertain terms the right of ordinary citizens of the country to hold the government to account for its conduct measured against our supreme Constitution. This case is likely to rank with the historic Coloured voters cases, ie the Harris, High Court of Parliament and Collins cases, as a landmark decision of a courageous and sagacious Constitutional Court, giving judgment without fear or favour, and proving its worth as an illustrious Court, ranking with the American Supreme Court and the House of Lords.

Bearing mind that the Court is intensely divided on the issue, and decided on the narrowest of majorities, namely by 5 to 4 judges, and the robust political controversy relating to the conduct and the demise of the Scorpions, the reaction of both the Executive and leaders of the ANC will be of crucial importance. Will they react in the magnanimous manner that President Mandela did in the Western Cape case, in which the Constitutional Court also invalidated a politically contentious statute of the first democratic parliament of South Africa? In the last mentioned case, President Mandela immediately responded to the Court's judgment with characteristic statesmanship by praising the Constitutional Court's judgment and observing that 'this judgment is not the first, nor the last, in which the Constitutional Court assists both the government and society to ensure constitutionality and effective governance'. Mandela thereby with consummate maturity and tact, immediately defused a crisis situation which had arisen out of the counter majoritarian dilemma, inherent in the nature of the Interim Constitution. As a result, both the Court and the Executive emerged unscathed out of the crisis and had traversed the most 'fundamental questions of constitutional law' and 'matters of grave public moment'. This was in marked contrast to the almost belligerent attitude of the politically aggrieved Malan government in the early 1950's to the seminal decision in Harris versus the Minister of the Interior, referred to above.

The Western Cape case represented a consummate victory for constitutionalism, since for the first time the Constitutional Court had invalidated a highly politicized parliamentary statute, passed by a democratically elected and legitimate national legislature and a President, venerated and acclaimed both nationally and internationally for his moral and political courage and sagacity, who responded with characteristic magnanimity to the Court's decision. The great ship of state was thereby navigated by both the Constitutional Court and the President through the turbulent seas of potentially hazardous conflict to reach 'safe and certain water'.

Will the extant Executive, headed by President Zuma and more importantly, the ANC leadership, rise to the occasion and display the same kind of leadership and magnanimity that Mandela displayed? Failure to do so could herald a protracted and acrimonious constitutional crisis not dissimilar to that involving the Coloured voters in the 1950's. Time alone will tell.

George Devenish is a DA Councillor in the Ethekweni Municipality.
He is a former Professor of Public Law at the University of KwaZulu-Natal (Durban).
He writes in his personal capacity.


Glenister's bid rejected

2013-06-14 21:00


Hugh Glenister

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Zuma: Hawks must have some govt control
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Parly must answer in Hawks case - lawyer
Hawks adequately protected - lawyer



Cape Town - The Constitutional Court on Friday rejected an application by Hugh Glenister to cover the costs of an expert, who testified for him in his successful challenge to the founding legislation of the police's elite Hawks unit.

Glenister argued that the court had mistakenly overlooked his request in the initial case for costs, because neither the majority nor the minority judgment mentioned it.

In its 2011 judgment, the court had ordered that the government pay Glenister's legal costs.

On Friday, the court agreed that the issue of the witness should be addressed, but found the rules for payment were not met because the expert did not provide "appreciable help" to the court.

It said the issue at hand was the constitutional validity of the legislation, and this fell "well within the competence of this court”.

In its original judgment, the Constitutional Court found that the SAPS Amendment Act gave inadequate independence to the Hawks in investigating corruption.

It gave the executive 18 months to amend the legislation.

Changes were signed into law by President Jacob Zuma in September last year.

Critics, including Glenister, have maintained that these fail to protect the unit sufficiently from potential political meddling.
- SAPA

Read more on: police | hawks | jacob zuma | hugh glenister | johannesburg
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2014-07-20 07:21

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Court orders Parliament to fix SAPS Act again
16 DEC 2013 07:43 SARAH EVANS


The high court in Cape Town has told Parliament to fix sections of the SAPS Amendment Act, again.
The problem with the Act lay with the lack of security of tenure and remuneration of Hawks members, and the degree of accountability and oversight by the ministerial committee. (Gallo)
When the Scorpions were disbanded in 2009, many people feared its replacement, the Hawks, would be politically pliable. As it turned out, the legislation enacted to create the Hawks left the unit vulnerable.

The Constitutional Court in 2011 gave Parliament an opportunity to fix sections of the SAPS Act that rendered the Hawks vulnerable to political interference.

On Friday, the high court in Cape Town found that Parliament's attempts to fix the offending legislation were simply not enough.

In 2011, the Constitutional Court found that section 6A of the South African Police Service Act was unconstitutional and invalid because it failed to give the Hawks and adequate degree of independence.

In essence, the problem with the Act lay with the lack of security of tenure and remuneration of Hawks members, and the degree of accountability and oversight by the ministerial committee (as well as its "untrammelled" power: the Consitutional Court found that the ministerial committee "undermined" Parliament's oversight function).

The declaration of invalidity was suspended for 18 months to give Parliament a chance to rectify the problem. Parliament duly "fixed" the relevant section, and the SAPS Amendment Act of 2012 was enacted.

But the Helen Suzman Foundation and businessperson Hugh Glenister felt Parliament's attempts did not fix the problem, and that the Hawks were still not independent enough or sufficiently protected from political pressures.

The Constitutional Court had already ruled that the location of an anticorruption unit such as the Hawks within the police was not unconstitutional. It was therefore up to the high court in Cape Town to decide whether the Act gave the Hawks sufficient "structural and operational autonomy so as to shield it from undue political influence".

Thus the high court last week appeared careful to avoid "falling into the trap of seeking to satisfy … paranoia" and busied itself with the "objective" nature of the task before it: trying to assess whether the relevant portions of the Act were adequate.

Central to the issue were sections 16 and 17 of the Act. Two of these went to the core of the case before the high court, namely the appointment of the head of the Hawks and the lack of parliamentary oversight on the anti-corruption body.

The applicants argued that the current legislation gave the minister too much discretion in appointing the Hawks' head.

President Jacob Zuma, also a respondent, argued that the courts could limit the power of the minister on review. The high court found this was "misplaced".

As the court stated on Friday: "The imperative of including, in any empowering statute, sufficient guidance to guard against the infringement of rights in the exercise of the power conferred, is not a question of objectivity but rather of the clarity and specificity of the criteria prescribed. This is precisely because … the legislation … must limit the risk of the unconstitutional exercise of the discretionary power conferred. The risk is not limited by the mere ability to test the exercise of that power on an objective basis in a review."

Next was the matter of Parliamentary oversight. The applicants complained to the court that the head of the Hawks is not insulated from political interference because the minister of police, with Cabinet, appoints him or her, without Parliament.

The Constitutional Court previously held public perception of independence was an important criteria when measuring the independence of an organisation such as the Hawks.

The respondents relied on case law (Van Rooyen and others versus the State and others) to argue that the executive was allowed to make appointments on its own. In that case, the Constitutional Court ruled that it was "constitutionally acceptable" for the minister of justice to appoint magistrates.

But the high court on Friday said this comparison was "misplaced". "First, magistrates apply the law. They do not investigate corruption. Second, and more importantly, magistrates, like judges, are constitutionally fully independent."

The high court ruled that section 16, as well as sections 17A, 17CA, 17DA, and 17K(4) to (9) of the SAPS Amendment Act, are unconstitutional.

Parliament has a year to remedy the problem.

Sarah Evans is a Mail & Guardian news reporter.
Read more from Sarah Evans
Twitter: @SarahPeace6


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Glenister: 'Hawks must fly free'

26 APR 2012 00:00 GLYNNIS UNDERHILL


Anti-corruption unit, the Hawks, should be free of political meddling, says Hugh Glenister at the public hearings on the police Bill in Parliament.

Hawks head Anwa Dramat was listening attentively to the public hearings in Parliament on the South African Police Service Amendment Bill, but like everyone else he must have been waiting for the headline act.

The assembled gathering was anticipating the appearance of grey-haired lobbyist Hugh Glenister. His lonely campaign to fight against the disbandment of the directorate of special operations, which became known as the Scorpions, has captured the public’s attention over the years.

Although Glenister might have lost his legal battle to save the Scorpions, a unit that achieved a conviction rate of more than 90% and pursued many high-profile cases, it had other, unexpected consequences.

His application to the Constitutional Court resulted in a ruling last year that sections of the Act that disbanded the Scorpions and created the directorate for priority crime investigation, known as the Hawks, were inconsistent with the Constitution.

The Constitutional Court ordered that chapter 6A of the South African Police Service Act of 1995 be sent back to Parliament until it had been rectified. The order of constitutional invalidity was suspended for 18 months.

Room for interference
Deputy Chief Justice Dikgang Moseneke had delivered the majority judgment, prepared with Justice Edwin Cameron, ruling that “the directorate for priority crime investigation is insufficiently insulated from political interference”.

And so Glenister was given an opportunity this week to make a personal appeal to members of the parliamentary portfolio committee on police.

“We are all on the same side,” he said. “I have heard some startling things about private and public ­sector corruption. But corruption is corruption. We look to you [the MPs] as the people who would lead us in this fight.”

Glenister said that corruption occurred because opportunities were created for it to flourish. “You are making us cry. Lead us forward, so we can believe that you represent our check against the executive.”

His legal representative, Paul Hoffman, who is director of the Institute for Accountability in Southern Africa, told the committee that his client had already told him that he would challenge the Bill if an acceptable solution was not found.

“We are not making threats, just stating a fact,” said Hoffman. “We accept that everybody on the committee is against corruption and that you want to come up with a constitutionally viable solution.”

It was in the interest of every member of the committee, as well as society as a whole, to see what could be done to deal with the scourge of corruption, said Hoffman. And it was “inappropriate” to house the Hawks in the South African Police Service, he said, using the organisation’s recent history by way of illustration.

“National police commissioners [have not had] a good track record in the past few years,” Hoffman told the committee.

Police commissioners’ bad reputations
He cited the case of former police commissioner Jackie Selebi, who is in jail for 15 years on charges of corruption, adding that incumbent Bheki Cele was awaiting the verdict of a board of inquiry set up to investigate the police lease scandal.

South Africa deserved best practice, said Hoffman, and suggested that the Hawks become a constitutionally protected or chapter 9 institution.

“You have to get real about what is going on in this country. It is not all right to leave this anticorruption body inside the police.”

Constitutional law expert Pierre de Vos also voiced his concerns at the public hearings, saying the Hawks were still not guaranteed freedom from political influence.

“The heart of the matter is that the court said there has to be sufficient independence to keep this body at arm’s length from potential political interference,” De Vos said.

Trying to retain the Hawks within police hierarchy and structures and at the same time make the unit independent would be difficult, if not impossible, he said.

De Vos proposed that making it a criminal offence for anyone to interfere with or stop an investigation could go some way towards giving the Hawks independence.

As the Bill stands, there was the potential for political involvement in the appointment of the director of the Hawks, he said, and there was no protection for the dismissal of members of the Hawks.

And, crucially, there were no proactive mechanisms to protect members of the Hawks from political pressure.

Read more from Glynnis Underhill
Twitter: @glynnisu

MEDIA RELEASE BY THE FINANCIAL SERVICES BOARD FOR THE ATTENTION OF INVESTORS IN THE SHAREMAX GROUP

MEDIA RELEASE BY THE FINANCIAL SERVICES BOARD FOR THE ATTENTION OF INVESTORS IN THE SHAREMAX GROUP

The Financial Services Board (FSB) finds it necessary to comment on a Circular dated 6 August 2013 issued by Frontier Asset Management to debenture holders and shareholders who have acquired their rights in terms of Schemes of Arrangement involving a number of Sharemax companies.

The Schemes were sanctioned by the High Court on 20 January 2012.

The Circular may be read as suggesting that the FAIS Ombud no longer has jurisdiction to deal with complaints of former Sharemax investors, not only against the Sharemax companies themselves, but also against their directors or functionaries.

Further, that pursuing claims through the offices of the Ombud may be interpreted as that such claimants have abandoned and repudiated their claims arising from the Schemes of Arrangement.

The FSB cautions, without suggesting a particular alternative, that views on the above issues are still subject to adjudication by the FSB Appeal Board and until this has been decided upon, investors are well advised to consult their legal representatives before taking a decision on the matter.

A number of determinations by the FAIS Ombud have been made against Sharemax, persons or entities associated with it and independent intermediaries who had advised their clients to invest in the Sharemax product.

Many of these determinations have been taken on appeal to the FSB Appeal Board where they are still pending. In one such instance the Chairman of the Appeal Board has granted leave to appeal.

The FSB is trying its best to have this appeal heard as soon as possible. However, nothing prevents any former investor in Sharemax from lodging complaint with the FAIS Ombud against any party considered to be liable for any loss suffered. Once the outcome of the appeal referred to, is known, the FSB will issue a follow-up media release in order to guide former Sharemax investors as to their further options.

-Ends-

Enquiries: Ms Tembisa Marele

Communications Specialist

Financial Services Board

Email address: Tembisa.Marele@fsb.co.za

Telephone: 012 428 8025


083 754 2052

________________________________________________________________________________________________________


The luxurious lives of Sharemax bosses
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Johannesburg - This is the luxury life of the two top managers of collapsed property syndication company Sharemax - while thousands of investors have lost most, if not all, of their money.

City Press has traced about R250m of assets owned by trusts and companies of Sharemax’s former managing director, Willie Botha, and his marketing manager, Andre Brand.

Botha and Brand were, for almost a decade, at the helm of Sharemax as about 40 000 people invested an estimated R5bn in the company’s 50 property syndicates.

The Reserve Bank ruled in May last year that Sharemax had contravened the Banks Act and had illegally collected deposits from investors.

City Press can reveal this week that one of Brand’s acquaintances, Wietz Nell, has handed incriminating documents and information to the police’s Hawks unit.

The Hawks would not say whether they have launched an investigation against Botha and Brand.

In the documents, Brand accused Botha in a memorandum of illegally pocketing at least R9m of money intended for investors.

Brand also alleged that Botha had, over a period of four years, pocketed R53m in “commission” from a Sharemax front company. Brand demanded a R24.5m share from Botha.

Botha this week ignored multiple attempts to get comment.

Brand said this week that Nell had obtained the documents dishonestly, but he did not deny their veracity.

Brand said that he had in the meantime cleared his complaint with Botha and that he withdrew any allegations against him. He said he now believed the money was paid legally to Botha.

Tomorrow, a group of Sharemax investors plan to bring an urgent court application to declare Sharemax bankrupt, and to freeze the assets of Botha and Brand.

Among the assets that the investors want frozen is Botha’s luxury yacht, which he keeps in the Egyptian port of Hurghada in the Red Sea.

The Italian-designed Scuba Scene is apparently worth between R120m and R150m, and is wholly owned by the Willem Botha Family Trust.

The boat has its own website and is described as “43 metres of classic nautical beauty and luxury”.

It says the Scuba Scene is a “true marvel of design, technology and style to provide all its passengers with an aesthetically pleasing masterpiece”.

The investors also want to ask the high court to prevent Brand from selling his 3 000 hectare game farm near Thabazimbi in Limpopo.

The game farm, Thaba Motswere, has been valued at R79m, and has giraffe, eland, kudu, gemsbok, cheetah and leopard.

The farm’s lodge alone cost Brand an estimated R20m to build and resembles a five-star hotel with all possible amenities.

Brand is desperate to sell the farm and even considered a price of R21.5m last month.

Botha has an equally luxurious game farm in Marken in Limpopo that is thought to be worth even more as it has the Big Five – elephant, rhino, buffalo, lion and cheetah.

Botha lives in a double-storey villa in the exclusive Silver Lakes Estate in Pretoria. Brand recently signed a contract to sell his mansion in Mooikloof in Pretoria for R15m.

Botha was in August “relieved” of his duties and resigned as director. Brand has also since left the company.

In September, the Reserve Bank put Sharemax under statutory management, ordering Sharemax to repay its investors, but there was no money left to do so.

The documents that City Press obtained shows that after Botha and Brand had left Sharemax, they were still paid R15m commission.

The company that is managing Sharemax on behalf of the Reserve Bank, Frontier Asset Management and Investments, did not respond to queries this week.

A forensic auditor, André Prakke, studied the documents obtained by City Press and concluded that there was evidence of money laundering, theft and fraud.

Prakke says that 80% of the money that was invested in Sharemax is gone.

Prakke has investigated Sharemax for many years and has submitted statements about the company to the high court.

He says that the commission that Brand refers to in his memos to Botha has never been revealed in any of Sharemax’s property portfolios.

- City Press

Read more about: property | investing | sharemax | fraud


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Nova Property Group Holdings Limited 2011/003964/06
105 Club Avenue, Waterkloof Heights, Pretoria

Dominique Haese Managing Director, Connie Myburgh Chairman, Rudi Badenhorst Financial Director, Dirk Koekemoer Operations Director

SHAREHOLDERS / NOVA PROPERTY GROUP HOLDINGS LIMITED
and
DEBENTURE HOLDERS / NOVA PROPERTY GROUP INVESTMENTS PROPRIETARY LIMITED
31 May 2014

The Board of Directors of Nova Property Group Holdings Limited (“Nova Holdings”) and Nova Property
Group Investments Proprietary Limited (“Nova Investments”) report as follows.
DEAR SHAREHOLDERS AND DEBENTURE HOLDERS

1. Second Year Capital Repayments

1.1 The Second Year of the existence of the Nova Group since scheme sanctioning has come and
gone.

1.2 After a difficult but very successful First Year, in which the first class of debentures of the
projected first year payment process were repaid in full, the Board is pleased to announce that
the first class of debentures of the projected second year payment process, namely the Hazel
related Debenture Holders, also received payment of their full historically invested capital
during April/May 2014 (full syndication value). 2
1.3 An interim return of 5% per annum was paid to Hazel related Debenture Holders month, for the
3 months period from 1 February 2014 to 30 April 2014, to accommodate the administration
process and allow sufficient time for the FICA processes.


1.4 We thank all the Hazel related Debenture Holders and the numerous other Debenture Holders
who expressed their appreciation, support and exceptionally positive response to the
successful implementation of the projected second year payment process in terms of the
Income Plans related Scheme.

1.5 The Board further is pleased to announce that the second class of debentures of the projected
second year payment process, namely the Village related Debenture Holders, will also receive
payment of their full historically invested capital at the end of July 2014 (full syndication
value).

1.6 This decision was not taken lightly by the Board, in conjunction with the Receivers. As was
advised to Village related Debenture Holders, during February 2014, it was decided that the
optimal value creation in respect of the Village property had not yet been achieved to the best
benefit of the Group and all its stakeholders, and specifically the Village related Debenture
Holders. Consequently, investment payment in respect of Village related Debentures was not
made at the end of January 2014, as projected.

1.7 The Group continues to focus on upgrading activities in respect of Village property, so as to
procure maximum value creation in respect of the Village property, in order to achieve the
optimal market value of the Village property in the best interests of the Group, which could put
the Group in a position to procure alternative funding in order to make payment, in full, to the
Village related Debenture Holders by 31 July 2014.

1.8 An interim return of 5% per annum is currently being paid to Village related Debenture Holders
monthly, for the 6 month period from 1 February 2014 to 31 July 2014, to accommodate the
period required for alternative funding procurement, administration and FICA processes.

1.9 With regard to the third class of debentures of the projected second year payment process,
namely the Whale Rock related Debenture Holders, the Board had to take the difficult decision
that no payment, nor any part payment, in respect of historically invested capital, will be made
during 2014.

1.10 This decision is taken having regard to the current economic and market conditions in the KZN
South-coast property market. The optimal value creation in respect of the Whale Rock property
has not yet been achieved to the best benefit of the Group and all its stakeholders, especially
bearing in mind that there is a current (historically entered into) bank bond over the property, of
approximately R14 Million, which the Group is dealing with. This bond stands first in line to be
settled. Furthermore, taking into account the fact that there is presently only a subdued market 3
for sales of the remaining Whale Rock units, the Whale Rock debentures currently have no, or
little value, as the aggregate possible sale value of the remaining units may well not realise
sufficient funds to repay the bank bond in full.

1.11 The Group will however continue to focus on the possible Commercial Property Development in
respect of the Whale Rock property, so as to procure maximum value creation in respect of the
property, in order to attempt to achieve the optimal market value of the Whale Rock property in
the best interests of the Group and the Whale Rock related Debenture Holders.

1.12 It is not known at this stage when this Commercial Property Development process will
commence, or when it will be completed, nor whether payment will be able to be made to
Whale Rock related Debenture Holders from such Development. Whale Rock related Debenture
Holders will be kept abreast of any future developments.

2. Property Specific Updates

2.1 One of the purposes of the Schemes was for the Board to embark upon individual upgrading
programmes, aimed at enhancing investment returns, capital growth, and investment
repayments when same fall due in terms of the projections contained in the Schemes.
2.2 The Board has embarked on these programmes to the best of its ability, in the face of the
funding difficulties referred to below.

2.3 On most properties, many hours had been spent by the board and professional teams in
preparing and finalising documentation relating to various planned upgrades and
redevelopments. Architect’s drawings, artist impressions and plans of the proposed upgrades
and redevelopments had been completed, submitted to local municipalities, and approvals
obtained.

2.4 Unfortunately, many of these upgrades and redevelopments have subsequently had to be
pended, as it proved extremely difficult, and ultimately impossible, and completely
unanticipated, to obtain loan finance from many of the regular Financial Institutions providing
such finance, notwithstanding the excellent values of the properties within the Group available
for security purposes and notwithstanding excellent serviceability of loans sought.

2.5 The reason for such difficulties put forward by Financial Institutions have proved, exclusively, to
lie with unwarranted, incorrect, biased, negative and malicious media reporting in the past, and
which certain journalists continued to busy themselves with to the extreme detriment of the
Group and its stakeholders, including, specifically Debenture Holders. 4

2.6 The stock standard response from Financial Institutions to a negative decision on their part, on a
well founded and well received funding request, has been so-called “reputational risk” to the
declining Institution, flowing directly from the destructive media reporting referred to above.

2.7 The Group had no choice but to take a view and was unfortunately forced, during last year, to
make the decision to rely on internal funding for its upgrading and redevelopment activities,
which activities are, as a consequence, smaller than initially planned and approved.

2.8 The above ties in directly with the negative impact on monthly investment returns to Debenture
Holders, and the current non payment of investment returns in respect of many of the various
classes of Debentures.

2.9 As previously reported, this position is expected to stabilise by the middle of 2015 on many of
the properties, specifically as the Group is presently focused on smaller refurbishments and
upgrades, which is expected to lead to retaining existing tenants, attracting new tenants,
minimising vacancies, increasing cash flow and ultimately increasing property capital values for
maximum capital payments to Debenture Holders in the long term.

Leeuwpoort Street Investment
The tenant, The South African Revenue Service (SARS), the only tenant in the building who had occupied
the building on a month to month basis for the past 6 (six) years, gave 3 months’ notice of termination
and will be vacating the property on 31 May 2014.
The Board has previously informed the Debenture Holders to remain aware of the risks associated with
month to month leases, particularly as the tenant could give notice to vacate at any time.
Fortunately, the Board had always anticipated this and managed to sell the property for a reasonable
price.

Athlone Park Shopping Centre
Cosmetic upgrades to Athlone Park Shopping Centre have been completed and have been very well
received by both tenants and the public. Structural repairs to the property are currently underway and
are expected to be completed within the next few weeks.
Some success has been had with the placement of new tenants and more than 500m² has recently been
taken up and another 400m² is under negotiation. The placement of Intercare into approximately
1,350m² has been delayed due to circumstances beyond the parties’ control and is expected to be
finalised during the second half of 2014.5

Benoni Hyper
The anchor tenant, Checkers, has vacated the property and Checkers will not return as the anchor tenant
as they have decided to consolidate their Benoni Hyper and Lakeside Mall shops into one shop and this
will be at Lakeside Mall. The line shops occupancies converted to a month to month basis on expiry of
the Checkers lease agreement and many of these line shops have decided to vacate the property. The
planned major redevelopment has been cancelled due to Checkers Hyper’s decision to open in Lakeside
Mall. Alternative uses for the property, such as wholesale, etc, are currently being investigated and
pursued based on market demand.

Carletonville Shopping Centre
The refurbishment or redevelopment of the property is currently under investigation. The property will
continue to underperform until such time as either of these actions has been implemented and finalised.
Shoprite has confirmed their intent on upgrading their premises and renewing their lease agreement.
Alternative uses for parts of the building are being investigated based on market demand.

De Marionette Shopping Centre & Shoprite Secunda
Negotiations for the renewal of the anchor tenant’s lease at Shoprite Secunda have commenced and it is
likely that the renewal thereof will be on a standard lease and not on a head lease basis, as it currently is.
We expect finalisation of this matter within the next month or two.
A major redevelopment of De Marionette Shopping Centre will no longer take place. Cosmetic
refurbishments are expected to commence within the next three months and are expected to have a
very positive impact on occupancy levels.

Homemakers Village & Shoprite Virginia
Homemakers Village was sold.
Checkers occupies Checkers Virginia under a head lease, which is due to expire toward the end of this
year. Talks with the tenant surrounding their future occupation of these premises have been finalised
and the lease agreement will be renewed for a further 5 years.

Liberty Centre
The occupation date for the new supermarket has been extended to March 2015 due to delays in
obtaining local authority approvals. Other national tenants, for approximately 3,500m², have also
confirmed their interest in taking space based on the placement of the supermarket. We remain
confident that vacancies will be taken up as soon as the anchor tenant(s) is in place.6
Part of the placement of these tenants will include cosmetic upgrades to the property and the
surrounding areas.

Lydenburg Pick ‘n Pay
The property is 100% occupied and all the proceeds are being utilized to service the bank bond on a
monthly basis as per the mortgage bond agreement.

Magalieskruin Shopping Centre
As previously reported, the anchor tenant, Woolworths Food, will not be renewing their lease when it
expires in June 2014 and appropriate steps are being taken to secure Pick ‘n Pay as a new anchor tenant.
A national food anchor will occupy approximately 1000m² and the cost to place them will be almost R4
Million. The anticipated lease agreement should be finalised in the next 3 months.
The shopping centre has received cosmetic upgrades, which was done in order to retain existing tenants
and attract new tenants, especially now that a new shopping centre is planned to open within close
proximity to the property. These cosmetic upgrades have been very well received by both the tenants
and the public.

Nelspruit Pick ‘n Pay Hyper
A notable increase in demand was experienced after cosmetic upgrades to the property were completed
and the bulk of the vacancy has been taken up. Retailers in Nelspruit do however remain cautious due to
a current oversupply in the market as a result of new shopping centres being built in Nelspruit and
neighbouring Mozambique. A downward pressure on rentals is currently being experienced and is
expected to continue for the foreseeable future. Ingress and egress to the property has been improved.
Major damage to the interior of the property caused by a burst sprinkler system was successfully
managed and repaired.

Oxford Gate
All the sections will be sold off one by one as a result of the successful sectional title conversion.

Parkside Shopping Centre & Secunda Plaza
Parkside Shopping Centre has been sold.

Secunda Plaza is in need of cosmetic upgrades in order to retain existing tenants, especially now that a
new shopping centre has opened within close proximity to the property. The planned cosmetic upgrades
will commence in the next 2 months. Downward pressure on rentals is currently being experienced due 7
to an oversupply of retail space in the market, which is expected to continue for the foreseeable future.
An increase in vacancies is expected and appropriate steps are being taken to secure suitable
replacements.

Range View Shopping Centre (Carnival Décor Centre)
A notable increase in demand has been experienced since cosmetic upgrades to the property were
completed and more than 800m² of the vacancy has been leased out to DIY DEPO. We expect an
increase in demand as soon as this tenant commences trading in June 2014. The name of the centre will
change to “Carnival Décor Centre”.

Silverwater Crossing
Both new tenants, Mr Price and Capitec Bank, are trading. The renewal of the anchor tenant’s lease
agreement is currently under negotiation and is expected to be finalised within the next 4 months.

The Village Shopping Centre
The anchor tenant, Spar, as well as another large tenant are both looking to expand their premises.
Proposed layouts have been prepared by the property’s architect and we await further advices from the
tenants in this regard.
Office vacancies remain a challenge, and currently 370m² of office space letting is under negotiation.
Tarentaal Centre
The Tarentaal Centre will not undergo any major redevelopment as initially planned. The property will
however be upgraded and this process will commence during the latter half of this year. It is expected
that this upgrade will have a positive effect on tenancy levels.

Waterglen Shopping Centre
A major redevelopment of Waterglen Shopping Centre will no longer take place. Cosmetic
refurbishments are expected to commence within the second half of 2014 and are expected to have a
very positive impact on occupancy levels, which are currently low. This will include tiling the common
area, upgrading all ablution facilities, modernizing the building façade, new clear view fencing around
the building perimeter, landscaping, changing certain shop fronts, increasing Pick ‘n Pay size to
approximately 2200m² and painting the centre, inside and outside. The expected refurbishment cost will
be R20 Million. 8

Witbank Centre
Interest from retailers remains strong but the placement of tenants is being handled on a selective basis
in order to achieve an optimum tenant mix for the shopping centre. The shopping centre needs to be
upgraded in order to retain suitable existing tenants and attract suitable new tenants. The anchor tenant
Checkers Hyper 550m² expansion was successfully completed and their lease was renewed for another 5
years. The construction of the new Taxi Rank and Bus Stop on site was finalised end of May 2014.
Flora Centre

There has been a notable increase in interest from retailers but, as previously advised, the placement of
tenants is being handled on a selective basis in order to achieve an optimum tenant mix for the shopping
centre. Two large tenants have recently been secured and are expected to be trading during the second
half of 2014. This will undoubtedly have a very positive impact on occupancy levels. The refurbishment
of the property has been well received by the public and is now attracting interest from national tenants
such as Sheet Street, which has recently been secured. The construction and refurbishment of Flora will
be finalised towards September 2014.

Growth Plans
The Board has concluded 3 Joint Venture Agreements with reputable residential developers. New
development planning is currently in progress based on the latest market researches, which will include
new architectural layouts, drawings, rezoning and marketing planning in respect of a number of
properties.

Tshwane China Shopping Mall (previously known as Zambezi Mall)
We are pleased to confirm that we have secured Oriental City on a head lease basis. The head lease
covers all lettable area in the building and will be taken up on a staggered basis. Approximately 60% of
the total lettable area has been taken up since late 2013, with the remainder expected to be taken up
during the course of 2014. Marketing of the shopping centre has been undertaken and footfall at the
shopping centre has increased drastically.

The Moloto road access to the centre still has a negative impact on the centre’s full trading potential and
until this is finally addressed, the traffic flow to the centre will remain a challenge.
The south eastern access road and intersection problems are correctly being addressed, and should be
solved within the next 3 months, which should have a positive impact on accessibility to the centre.
Unfortunately the litigation with Capicol Proprietary Limited, the historical developer of the centre, is
ongoing.

Debenture Holders and Shareholders will be kept advised of any significant further developments
.9
Villa Retail Park

Unfortunately the litigation with Capicol 1 Proprietary Limited, the historical developer of the Villa Mall,
is ongoing.
Debenture Holders and Shareholders will be kept advised of any significant further developments.
Please note that this information will be available on the Company Secretarial Services Provider Frontier,
website www.frontieram.co.za. You are welcome to visit this website for regular updates and
background information.

Debenture Holders and Shareholders will be informed directly via sms of any communication placed
onto the web.

Kindly take note that the Nova Group intends communicating every four months, namely April, August
and December of every year.

If you, as a Debenture Holder of Nova Investments and/or Shareholder of Nova Holdings, do not
receive such communications from us, please contact Frontier, as invited below, and ensure your
correct details are reflected on their system.

Queries may be directly addressed by contacting the Frontier Client Services at 0860 77 7722 or on (012)
425 5000 or emailing admin@frontieram.co.za.

Yours sincerely,

The Nova Group Board


--------------------------------------------------------------------------------------------------------------------------------------------The targeting of Adv Glynnis Breytenbach
Dr Loammi Wolf
08 February 2012


Loammi Wolf says NPA is killing awkward prosecutions by removing competent prosecutors


Threatened suspension of top prosecutor would be arbitrary and unconstitutional
......

Sharemaxing the high life....Why is there still No Prosecution in the Sharemax case ??????


The Scuba Scene
High Court applications in Egypt and South Africa, criminal charges and threats of more criminal charges, a luxury lodge development in Mozambique, a Reserve Bank investigation into millions leaving the country and a tycoon’s yacht floating in the Red Sea.

These are the ingredients of yet another chapter unfolding in the Sharemax saga as the riches of the two top managers of the failed and beleaguered property syndication are being exposed.

Revelations of the wealth of former managing director Willie Botha and marketing director André Brand also come in a week that a Free State farmer prepares to apply for the liquidation of the R5bn Sharemax group.

Farmer AC van Zyl of Hoopstad says in his North Gauteng High Court affidavit that he invested R3m in Sharemax’s two biggest property syndications, The Villa and Zambezi Retail Park.

He says the syndications of both The Villa and Zambezi were illegal and have failed. There’s no money to repay him or any of the other investors – as the Reserve Bank has ordered, so the liquidation of Sharemax is the only option.

The liquidation application was due to be heard this week.

Focus shift

While many Sharemax investors are coming to terms with the fact that they’ve lost most, if not all, their investments in Sharemax, the focus has now shifted to the dazzling wealth that Botha and Brand have walked away with in the face of devastated and in some cases, impoverished shareholders.

Botha is fighting battles on all fronts.

Brand has also accused Botha in writing of pocketing R9m of investors’ interest – although he quickly withdrew the statement after Media24 Investigations started asking questions.

Besides his Sharemax woes, Botha is also embroiled in a bitter feud with the man who built his ultra-luxury yacht and who says he invested millions in the yacht as well.

Peet Gericke, owner of Scuba Scene diving in Pretoria, has also gone to war with Botha, accusing him of breach of contract and claiming that Botha intimidated him. He has laid charges at the Brooklyn police station in Pretoria.

At the heart of their dispute is the 43-metre Scuba Scene yacht thought be worth between R120m and R150m, which is owned by Botha’s family trust.

Gericke says he built the luxury yacht over more than four years and that he owns a substantial share.

Dirty laundry

Not so, says Willie Botha, who claims on his yacht’s website that Scuba Scene is fully-owned by the Willem Botha Family Trust. The website, which showed Botha and friends frolicking and diving on the yacht during a recent Red Sea holiday, was this week promptly removed from the web.

The yacht’s Facebook page detailing the feud between Botha and Gericke was removed. Finweek was, however, able to retrieve a copy of the page which gives a fascinating insight into the dispute.

Gericke says his battle with Botha has resulted in four High Court applications in Pretoria and two in Egypt. Litigation continues unabated.

Gericke confirms that he’s been visited by Reserve Bank investigators looking into millions that left the country through his accounts for the construction of the yacht. Much of the money came from Botha, he says, adding the investigators left with a substantial volume of documentation.

Gericke has also consulted with a private investigator in Pretoria, who in turn handed a pile of documents to Willie Hofmeyr, head of the Asset Forfeiture Unit.

Threats of liquidation

On the Facebook page, the Botha camp claims to have loaned R600 000 to Gericke and says if he doesn’t repay the Botha Trust in December, they will liquidate him.

Botha and his advocate visited Egypt in October and say they laid fraud charges against a business partner in Egypt.

The Scuba Scene yacht, which boasts 13 en suite cabins, a crew of 14 and the finest finishes, has been locked down in Hurghada in the Red Sea (see pictures).

Although Gericke still advertises dives from the Scuba Scene on his firm’s website, he confirms that the boat is no longer operational.

Botha also claims that he holds a 50% shareholding in Jupitrax, which owns the Scuba Scene shop in Menlyn Park in Pretoria and a multi-million rand resort development in Mozambique.

Gericke is busy developing the luxury Praia Paraiso coastal estate in Ponta Do Ouro in southern Mozambique. If Botha’s claim to own half of Jupitrax is correct, it would mean he also has a stake in the Praia Paraiso developments, which offer fractional ownership.

Meanwhile, questions are being asked about Brand’s accusation against Botha that the latter had illegally pocketed R9m of investors’ money in October 2009.

Documents pertaining to this payment are now in the hands of the Hawks.

Unanswered questions

Finweek has pieced together the events surrounding the money, and despite assurances by Botha – and suddenly Brand – that there was nothing illegal about the payment, questions remain.

Brand wrote a memo to Botha on 7 July claiming he was owed R24.5m in unpaid commission. He claimed that between March 2007 and February 2011 Botha had earned almost R50m in commission from Brandberg Investments, a property company that does business with Sharemax.

This money does not include the commission they earned from selling shares worth R5bn over 10 years to 40 000 investors.

Brand said he only got around R7m from Brandberg and demands another R24.5m from Botha. Botha claims he never received the memo.

Brand’s claims come after he started an investigation to trace commission that he thought he should have received from Botha but never did.

One of the people he visited was Capicol MD Paul Kyriacou. Capicol was the developer of Zambezi Mall and The Villa. Kyriacou confirmed that he’d told Brand about the R9m he transferred to Botha in October 2009.

“I notified André Brand about this and gave him a copy of all the documentation many months ago,” Kyriacou said. He claims it was for his share in a company he sold to Botha and that there was nothing illegal about it.

Cash up-front

But Brand didn’t agree and wrote the July memo.

Enter Wietz Lourens Nell, a Pretoria businessman who buys and sells property. Brand wanted to get rid of his game farm near Thabazimbi in Limpopo Province, valued R79m according to a 2010 auditor’s report.

Nell found a buyer, and Brand signed a letter agreeing to sell the farm for a mere R21.5m. But, according to Nell, he wanted cash.

The sale never materialised but, says Nell, Brand asked him to help him get his money out of Botha and he gave Nell the July memo.

At around that time, Brand realised that the R9m payment from Capicol to Botha might be questionable. On 26 October he wrote to Botha distancing himself from the transaction saying the money had been wrongfully transferred from Capicol to Botha’s helicopter company.

Brand wrote: “These funds should be transferred to Sharemax for purposes of an interest payment.”

Brand also gave the memo to Nell, who in turn passed it on to the Hawks and the lawyers now bringing the liquidation application. He also made an affidavit about his dealings with Brand, now in Media24 Investigations’ possession. The Hawks will not comment on their investigation.

When Media24 Investigations approached Brand and Botha for comment last week, Botha refused to entertain any questions.

However, at midnight last Friday, both responded by saying that they had spoken to one another and that Brand was withdrawing any allegation against Botha and that he was now satisfied that the money was paid legally to his former business partner.

Brand never denied that the memos were authentic, simply that they had been obtained “dishonestly”.

- Jacques Pauw ( Finweek )
.

Now for the rest of the story

The pending suspension of adv Glynnis Breytenbach, who heads the NPA's Pretoria office of the specialised Commercial Crimes Unit and who has made her mark as a graft buster, caused quite a stir. From a constitutional point of view, it will be an infringement upon the principle of prosecuting independence as laid down in section 179(4) of the Constitution should she be suspended from office.

The problem is of a bigger dimension though than this incident. Although state prosecutions should be based on the rule of law with criminal laws applying in general to everybody, political office bearers seem to be immune to prosecution with the exception of a few sacrificial pawns like Yengeni. If one looks at the case of Malema, for example, who is alleged to be involved in corruption and having evaded taxes to the tune of millions and Carl Niehaus, who committed fraud in a number of instances, who were never prosecuted, it is clear that there is a two-class prosecution policy: one for the well-connected ruling class and another for ordinary people.

The main problem is that the Westminster system's separation of powers has been perpetuated although South Africa switched to the constitutional state model in 1994.

During the Codesa deliberations one of the main issues was that people wanted a clear break with the weaknesses of the Westminster system. They no longer wanted a system of parliamentary sovereignty where any legislation - irrespective of whether the laws were fair and just - should be enforced. They no longer wanted a system where criminal prosecutions could be manipulated by the executive. In short, they wanted a written constitution with a bill of rights, containing a limitation clause clearly spelling out how state power should be exercised, and making it possible to declare legislation that is not in conformity with constitutional norms, unconstitutional. This is a system of rule of law instead of rule by law.

It is a well-known fact that excesses of state power, and an abuse of executive power in particular, typically crop up in systems where prosecutors can be controlled by the executive. This is one of the principal weaknesses of the Westminster system. The most extreme forms of abusing power in the sphere of criminal justice are found in authoritarian systems - be that military dictatorships or systems like the socialist regimes of the former East Bloc. A typical feature of these regimes was that judges and prosecutors were executive appointees and that such positions were only open to trusted cadres.

Reports on how the criminal justice system of East Germany functioned leave no doubt about its crudeness and negation of basic human rights. "Political offences" were prosecuted by the Stasi (secret police) with harsh justice being meted out for any form of dissidence. Even a cursory reading of the three decades of articles by Tiziano Terzani on the communist regimes in South East Asia like China, Vietnam and Cambodia, makes clear how prone these systems were to corruption of cadres. Despite the lofty ideals of communism the abuse of power in criminal justice, directly or indirectly controlled by the executive, was endemic. This should make one think twice before these systems are idealised in the revisionist manner, which is currently so en vogue.

Differences between Westminster and constitutional state criminal justice

The constitutional state model foresees three equally strong branches of state power: the legislature, the executive and the administration of justice through prosecution and adjudication (judiciary; prosecutors). Unlike the Westminster system, where prosecutors were historically a split-off from the police as "law-enforcers" who also prosecuted criminal offences, the prosecutors were split-off from the judiciary in Continental European constitutional states to separate the investigation of criminal offences from adjudication.

In the Westminster system, prosecutors are thus part of the executive branch, and not the third branch of state power. As a result, one cannot clearly define criminal prosecutions as part of the administration of justice. One also cannot clearly delineate criminal investigations and prosecutions (criminal law) from executive state administration (administrative law) because the boundaries of the applicable law are completely blurred.

The current Constitution, however, makes clear that the state prosecutors are the second organ next to the judiciary in the third branch of state power. How they should exercise these powers are regulated by Chapter 8 of the Constitution in conjunction with sections 34 (access to the courts) and 35 (rights to fair treatment in criminal investigations, trials and the execution of sentences) of the bill of rights. This must be clearly distinguished from executive powers and the right to just administrative action (section 33 of the bill of rights) that could be taken by such state organs. In the field of public law, the former is regulated by criminal law and the latter by administrative law.

In other words, prosecuting policy which could be made by the national director of the prosecuting authority in terms of section 179(5) of the Constitution should not be confused with executive policy on how to implement powers conferred upon them in terms of legislation.

The minister of justice is therefore not the boss of the prosecutors - even if Mr Zuma seems to espouse this view -- but runs a department of the executive branch, which is obliged to facilitate a liaising role insofar as executive state organs (the police, tax authorities, customs and excise, etc) have to assist in criminal investigations.

One must therefore clearly distinguish the powers of the police force to secure public safety and order in terms of section 205(3) of the Constitution from their assistance to prosecutors to investigate criminal offences. Their powers as part of the executive branch (ie to secure public safety and order) are subject to the norms of just administrative action as laid down by section 33 of the bill of rights. This prohibits police officers, for example, to use excessive force when they exercise their administrative powers.

Criminal investigations, however, are headed by the prosecuting authority as an organ of the third branch of state power. The power to prosecute has explicitly been conferred upon them by section 179(2) of the Constitution and depends on criminal law. Unlike Westminster systems where police officers may also prosecute, this is precluded in constitutional states. Section 13(5) of the SAPS Act of 1995, which confers prosecuting powers upon members of the police force, is therefore obviously unconstitutional.

Prosecutors are bound by the principle of legality and have to invoke criminal law "without fear, favour or prejudice" (section 179(4) of the Constitution). It is therefore not the national director of the NPA who decides whether a specific act is a criminal offence based on some value judgements but the law.

Prosecutors are obliged to prosecute all matters with a reasonable chance on success (the pre-trial prima facie standard) when the elements of a specific crime can be proved. In S v Basson the Constitutional Court held that it is the constitutional obligation of the prosecuting authority "to prosecute those offences that threaten or infringe the rights of citizens".

In Nkdimeng v National Director of Public Prosecutions, the Gauteng High Court equally stressed the right of victims and held that it would be unconstitutional if the prosecuting authority would refuse to prosecute "where there is a strong case and adequate evidence to do so".

If the prosecutors should be allowed to drop charges in a prima facie case, this would boil down to a de facto acquittal without a trial. This, however, would constitute an usurpation of judicial power which is an unconstitutional practice in terms of section 41(1)(f) of the Constitution.

If prosecutors would refuse to prosecute a person in a prima facie case, a victim could therefore invoke section 34 of the bill of rights to get access to the courts and thus force the prosecutors to institute criminal proceedings in a specific matter. Along this route one can say that the state organ, who exercises a kind of oversight over the prosecutors to ensure that they do not drop criminal charges arbitrarily, is the judiciary.

It is laudable that Dene Smuts of the Democratic Alliance in her defence of adv Breytenbach, has told the top officials of the NPA that they should remember that the NPA is accountable to Parliament. Smuts relied on section 35 of the NPA Act of 1998. This provision, however, is just as unconstitutional as section 13(5) of the SAPS Act, which conferred prosecuting powers upon the police. In terms of section 55(2) of the Constitution, Parliament has the power to oversee state organs exercising executive power. The administration of justice (ie prosecution and adjudication) is not an executive power though.

Illegal orders to drop charges or purposely aborting cases

What is at issue, is that adv Breytenbach has been taken off a fraud case by the former head of the NPA, Menzi Simelane just before he lost office, involving Imperial Crown Trading in the Kumba Iron Ore case r - alleged due to pressure by well-connected persons.

She was apparently also forced not to pursue a fraud and murder case involving the crime intelligence boss Richard Mduli by the new director of the Commercial Crimes Unit, Lawrence Mrwebi. Apparently Mrwebi is also due to give evidence in another matter where she is the prosecutor. He authorised a transaction of his colleague Ledwaba during his time as head of the Scorpions in Natal, in which the latter siphoned off over R500.000 from a confidential funds of the Scorpions.

In its letter to adv Breytenbach, the NPA cited only an alleged abuse of powers in the criminal investigation of the multibillion-rand Sishen iron ore mining deal. A portion of the prospecting rights to the mine was initially awarded to Imperial Crown Trading, whose beneficiaries include President Jacob Zuma's son, Duduzane, Deputy President Kgalema Motlanthe's partner, Gugu Mtshali, and Jagdish Parekh, who heads the Gupta family's business empire. After a challenge by Kumba Iron Ore, the award to Imperial was invalidated by the Pretoria High Court last year.

It has been alleged that such tactics are employed when the top structure of the NPA want a court case to fail. This also happened in the case of druglord Glenn Agliotti, when Gerrie Nel was taken off the case. Simelane also instructed Gauteng's acting deputy director of public prosecutions, Gladstone Maema, to replace Gerrie Nel, as prosecutor in Mphego's trial. Nel charged Mphego, a former head of the SAPS's crime intelligence unit, for defeating the ends of justice in the Selebi trial. Shortly afterwards the case was struck off the role. Mphego was apparently also involved in passing the disreputable spy tapes on to Zuma's lawyer, Michael Hulley, which then served as a reason to drop charges against Zuma.

Breytenbach's lawyer, Gerhard Wagenaar, said that his client had denied abusing her powers and had written to the NPA to request more details about the alleged abuse.

The question is therefore whether directors of the NPA may give orders to prosecutors to drop charges in a prima facie case or whether they may cause the deliberate abortion of a prosecution by taking successful prosecutors, who investigated a matter and know all its details, off a case?

The directors of the NPA are bound by the principle of legality and must invoke the law in an unbiased and scrupulous manner. The rule of law is cemented by section 1(c) in conjunction with section 179(4) of the Constitution. With such behaviour they would forsake their constitutional duties. They themselves could be charged for improper interference with criminal prosecutions (section 32(1)(b) read with section 41(1) of the NPA Act). Originally such interference was sanctioned with up to ten years imprisonment, but at the behest of the executive the legislature watered this down to a maximum of two years' imprisonment.

Such improper orders would also be a ground to remove the national director from office if he would be involved in such arbitrary dropping of charges or wilfully abort cases by taking prosecutors, who investigated a specific off cases with the sole purpose that the case should fail (section 12(6)(a)(i), (ii) and (iv) of the NPA Act). The point is just that this is not likely to happen if the President who is supposed to do that is himself a beneficiary of such improper action. It is doubtful whether this provision in its current form would survive the scrutiny of its constitutionality, because it transgresses the separation of powers.

The Constitution demands impartiality from judges and prosecutors and make them subject only to the Constitution and the law. There are obviously differences between judicial independence compared to prosecuting independence though.

Judicial independence means that there is no internal hierarchic structure in the judiciary where a judge president or chief justice may give orders to other judges how to adjudicate in a specific matter. The different tiers of courts exercise judicial power in their respective jurisdictions and their powers are regulated by the Constitution, the law and the system of precedent (stare decisis), where lower courts are bound by legal rules that crystallised in judgments of higher courts.

Prosecuting independence primarily denotes independence from political influence of the justice minister and the executive branch. In S v Basson a unanimous bench of the Constitutional Court stressed the independence of the prosecuting authority as state organ to institute criminal proceedings under section 179 of the Constitution on behalf of the state. Although the internal organisation of the prosecuting authority is hierarchically structured to enable an efficient administration of criminal prosecutions, all prosecuting decisions are still subject to the principle of legality. It would therefore be an unconstitutional exercise of power if a director of public prosecutions would force prosecutors to drop charges in prima facie cases.

In terms of section 32(2) of the NPA Act all prosecutors have to take an oath that they will enforce criminal law impartially and will uphold and protect the Constitution and rights entrenched by the bill of rights. If adv Breytenbach's superiors would therefore force her to break her oath, this not only has consequences as an unfair labour-law practice because it forces her not to perform her duties properly, but can be contested at a constitutional level as well. She would be able to take the matter to the Constitutional Court on the basis of a dispute concerning the powers and functions of a state organ (section 167(4)(a) of the Constitution.)

The appeal of the Democratic Alliance's case about the legality of dropping of charges against Zuma at the time when he was president of the ANC shortly before the 2009 elections and which made the way free for him to run as President, has been scheduled for a hearing in the Supreme Court of Appeal on 15 February 2012. This will be a litmus test for impartial state prosecutions and upholding the rule of law.

* Loammi Wolf specialises in public law and has a special interest in constitutionalism and state organisation law. She obtained an LLM at the University of Virginia as well as a doctorate in constitutional law at Unisa. Currently she runs the initiative Democracy for Peace. She published extensive research on the topic of prosecuting independence.


Articles:

Why is NPA trying to suspend Glynnis Breytenbach? - Dene Smuts
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Executive-corrupt-interference.....



by Oblio on February 09 2012, 04:28
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LABELS: ADV GLYNNIS BREYTENBACH COMMERCIAL CRIME UNIT CARL NIEHAUS YENGENI

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Special Investigations

Author: Julius Cobbett
31 January 2013 00:57
Fais Ombud finds Sharemax directors liable for investor's loss


Scathing determination declares Zambezi syndication 'nothing more than a Ponzi scheme.'

JOHANNESBURG – Fais Ombud Noluntu Bam has found four Sharemax directors liable for an investor’s loss.

The determination is unusual because it is normally only financial advisers who are held liable for bad investment advice.

However, in a lengthy determination, Bam has set out why she believes the Sharemax directors should be held accountable. The determination was signed on Tuesday. It can be downloaded in two parts here: part 1, part 2.

The determination could pave the way for thousands of other investors to claim losses from Sharemax’s directors.

In her latest determination, Bam is scathing of the Sharemax directors, who she accuses of “violating the law.” Bam's determination was received after close of business on Wednesday and the Sharemax directors were not immediately available for comment.

Bam writes: “The facts before this office support the conclusion that the investment, as promoted and executed by Sharemax, was nothing more than a Ponzi scheme. The directors of Sharemax violated the law and on this basis [they too] must be held liable for the investors’ loss.”

The complaint in question was laid by pensioner Gerbrecht Siegrist, 73, who is now destitute after investing her capital in two Sharemax-promoted syndications: Zambezi and The Villa.

The complaint was initially laid against her financial adviser, CJ Botha. However, the following six respondents were added to the complaint: Sharemax Investments, FSP Network (trading as Unlisted Securities South Africa), and the following four Sharemax directors: Gert Goosen, Willie Botha, Dominique Haese and Andre Brand.

Siegrist’s late husband left her an amount of money which was intended to provide her with an income. This money was placed in conventional investments, but on Siegrist’s broker’s advice, she invested R460 000 in Zambezi on April 2, 2008, and a further R120 000 in The Villa on July 15, 2008.

Siegrist’s broker, CJ Botha, claims that Siegrist instructed him to invest in Sharemax. But, says Bam, in the same breath Botha “admits that the complainant wanted an investment where her capital would be safe.”

Bam notes that Zambezi was a risky investment unsuitable for pensioners. Yet she notes that brokers who sold Sharemax products “almost without fail targeted pensioners.”

Bam found that the directors of Sharemax and FSP Network “were aware of the fact that the scheme [Zambezi] was both illegal and not commercially viable and yet they recklessly took investors’ funds. Investors whom within their knowledge were almost without exception pensioners who could ill afford the inevitable loss.”

Key to Bam’s determination is the finding that Sharemax and its directors were ultimately responsible for advice rendered by CJ Botha.

Bam links Sharemax to Botha through FSP Network, which traded under the name Unlisted Securities South Africa (USSA).

USSA provided many financial advisers with the necessary Financial Services Board (FSB) licence necessary to sell Sharemax products. The business was described by Bam in a previous determination as “nothing short of the hiring out of a licence for a small monthly fee.”

For more on USSA, see: the following articles: Broker offers widow costly Sharemax advice, FSB linked to Sharemax “licence for hire” scheme, and FSB official’s husband pays 13% return.

At its peak, USSA had 1376 representative brokers, all of whom sold Sharemax products. Bam notes that all of USSA’s registered brokers were only allowed to market Sharemax products.

What’s more, Sharemax director Gert Goosen was also USSA’s sole director and key individual.

Bam writes that Sharemax and USSA were “joined at the hip.”

“What Sharemax attempted to do was to create a buffer between itself and the brokers and the investors,” notes Bam. “This was a futile exercise as in law, Sharemax and its directors will, ultimately, be responsible for the conduct of their section 13 representatives.”

Bam says that Sharemax director Dominique Haese “gives no explanation as to why Sharemax stood by and took money from investors, via their ‘supervised’ broker network, who were clearly investing in a product that was not suitable for them.

Bam says that Haese must have known that the majority of the investors brought in by the representatives were pensioners.

Bam ordered all seven respondents, jointly and severally, the one paying the other to be absolved, to pay Siegrist the amount of R580 000. If the respondents comply with the order, they are entitled to Siegrist’s share certificate.

Image source: A risk-reward matrix from Bigstock

Topics: Fais Ombud, Sharemax, Noluntu Bam, Dominique Haese, Rinate Goosen, Gert Goosen, The Villa, Zambezi Retail Park