Bloemfontein - The Gupta-linked Bank of Baroda in South Africa has been in possession of "proceeds of crime" the Bloemfontein High Court heard on Friday, as the State argued for the court to uphold the freeze of around R30 million of the bank's funds.
The Asset Forfeiture Unit (AFU) of the National Prosecuting Authority (NPA) wants the preservation order issued by the court in January sustained. The funds include R10 million which was allegedly transferred by Estina (Pvt) Ltd into a private account belonging to controversial businessman Atul Gupta were frozen following a preservation order by the court on January 18.
It is believed the funds were part of about R220 million from the Free State provincial government meant for a dairy project designed to benefit poor black farmers in the province.
“Legitimate money was mixed with proceeds of crime,” said Ntimutse in his arguments to court," Thato Ntimutse, for the AFU, said, adding that millions of ill-gotten money was paid into a pool account held by the Bank of Baroda in order to mix it with clean money and hide what is believed to be illicit transactions.
“The money was withdrawn within a day or two. No businessman rounds up their figures when making payments. Mr Atul Gupta was a director in at least three of the affected companies when these transactions were made. He hasn’t come to court to explain himself.”
Ntimutse said there was no proper record keeping at Estina and some R10 million said to have been put into an investment account in 2013, was in fact deposited into the account of Oakbay (Pvt) Ltd, a Gupta-owned company.
He said the NPA had reason to believe some of the transactions were illicit.
“In this case, we don’t have to prove prima facie case. We only have to prove reason to believe… and our suspicions are based on transactions in a pool account. The affected clients started withdrawing money as soon as it was deposited into that account,” Ntimutse said.
His arguments were shot down by the lawyers for Gupta, the Bank of Baroda and at least five Gupta-owned companies who claimed the State's case was in disarray as the arguments were flimsy and that court papers had been badly filed.
Michael Hellens, for the Gupta-owned companies argued the State was presenting new arguments as the facts raised by the State were “not part of the files submitted to court”.
Hellens is acting on behalf of Aerohaven Trading (Pvt) Ltd, Oakbay Investments (Pvt) Ltd, Westdawn Investments (Pvt) Ltd, Annex Distribution (Pvt) Ltd and Islandsite Investments One Eighty (Pvt) Ltd.
Luc Spiller, for the Bank of Baroda, found the State to be contradicting itself by assuming the funds were proceeds of crime without substantive proof.
“The State is making absurd accusations. That money has been withdrawn and it’s gone, so why freeze in the account years later? You cannot justify the preservation order in any way. This preservation order must be set aside,” said Spiller.
Rafik Bhana, for Gupta, said they felt they were “being ambushed”.
“What the [National Director of Public Prosecutions] NDPP did is ludicrous, to say the least. It acted in suspicion and has failed to present a strong case… In the one-and-half hours our learnered friend [Ntimutse] addressed court, he couldn’t answer questions paused by your Lordship. They never said Bank of Baroda accounts should be taken as false in the court papers but they now want to present it as fact. It’s preposterous,” said Bhana.
Hellens described the State's case as a disgrace and urged the court to penalise them in order to teach them a lesson.
“Not only must this order be set aside, but the attorney client cost order must follow. The NDPP has shown its failure to understand our law and how commerce works. The NDPP should be flogged with costs. We cannot have a repeat of the same,” he said.
Judgment will be delivered next Friday.