Gupta companies’ preservation appeal: Hellens tears into State's case

File picture: Independent Media Archives

File picture: Independent Media Archives

Published May 17, 2018


Bloemfontein - The case in which Gupta-linked companies and individuals are seeking to stop a new preservation order on properties worth about R250 million is being heard in the Free State High Court.

The application was brought by Oakbay Investments (Pty) Ltd, Aerohaven (Pty) Ltd, Ashu Chawla, Oakbay acting chief executive officer Ronica Ragavan and former director Varun Gupta, Westdawn Investments (Pty) Ltd and Annex Distribution (Pty) Ltd.

Advocate Michael Hellens SC, who is representing the first five applicants was the first to argue and went straight to poke holes in the State case saying the accusations are not well-founded and will fail critical tests in a court of law.


Hellens criticised the National Director of Public Prosecutions (NDPP) for failing to understand the country's banking system which has resulted in the applicants being wrongly charged.

He said based on the charges being levelled against the applicants, the State had shown it doesn't understand how a foreign bank like Bank of Baroda (BoB) operates.

It is alleged that money paid to Estina (Pty) Ltd by the Free State Department of Agriculture to run a dairy project in Vrede in the Free State, was deposited into a pool account held at the bank before being transferred into the accounts of other Gupta-linked companies.

"The Bank of Baroda is a foreign bank and not a clearing bank," said Hellens.

"It doesn't have a clearing facility. When you're not a clearing bank, you operate as a bank, but cannot clear funds. The money has to be cleared by a local commercial bank," he added.

Hellens said what the State has failed to understand is that a pool account holds money from different clients and in this case, the other Gupta-linked companies also had funds in the same pool account.

"There's no identity of money in the pool account. There's no connection with the money. The State has not realised that the other entities implicated, also had accounts with the Bank of Baroda. The State is conflating facts," he argued.

Hellens said when money comes out of the pool account after some money had been deposited, it doesn't make that money proceeds of crime.

He went on to say the NDPP has still not been able adequately State the crimes committed by the applicants, indicating they did not really understand what they were investigating.

Hellens the charges were simply emanating from the flow of money.

"No offences are essentially pleaded against our clients," he stressed. Just because someone was a director in a company should not result in them being implicated over an alleged illicit flow of funds.

"If the NDPP's case were to be sold, it would mean you can spend your money twice... For example, the R5 million coming from BoB pool account to Oakbay didn't come from the Estina account in the same bank. Oakbay had its own funds in the same bank. It's actually a failure to understand banking," said Hellens.

He said there too many generalisations in the accusations and the applicants' charges are not clearly explained.

He said the NDPP was summarising cases in a bid to convince court that they had a strong case against the applicants. Hellens said the NDPP was alleging that the applicants conived to circumvent the supply chain regulations of the Free State Department of Agriculture without explaining how it was done.

"They are trying to make you believe there was a misappropriation of funds when the money was banked. My lord, this is just hot air," he said.

The case continues.


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