Optimum Coal Mine a vehicle through which Guptas laundered money: Shamila Batohi

The Pretoria high court should grant national director of public prosecutions (NDPP) Shamila Batohi preservation orders over Optimum Coal Mine as it was a vehicle through which the Gupta family laundered money.

This is the NDPP’s argument in an application before the court in which it seeks control over the property, now in the hands of business rescue practitioners.

Through its legal counsel Matthew Chaskalson SC, the NDPP argued that Tegeta obtained funds to acquire Optimum through fraud, money laundering, corruption and theft. 

According to court papers, Tegeta acquired Optimum in 2016 by paying a purchase price of more than R2bn into an escrow account held on behalf of banks who were creditors of Glencore, the existing owner of Optimum. 

Tegeta, the NDPP contended, obtained the money to pay this purchase price from eight sources of finance that arose from unlawful activities. 

Batohi has brought two applications under the Prevention of Organised Crime Act (Poca) to recover what she claims are proceeds of crime linked to the corrupt scheme for the Optimum acquisition.

“Assets targeted in these applications are the assets that gave rise to the public protector’s findings, in her October 2016 'State of Capture' report, that state capture existed and had pernicious, far-reaching effects,” Chaskalson said. 

“The public protector found evidence of irregular conduct by senior Eskom executives,  erstwhile minister of minerals and energy Mosebenzi Zwane and other senior state officials. This conduct facilitated the Gupta family’s acquisition of the business of the Optimum Coal Mine and Optimum Coal Terminal through which Optimum coal was mined and exported.”

The first preservation order sought by the NDPP is over all of Tegeta’s shares in Optimum Coal Mine (Pty) Ltd (OCM), all of Tegeta’s shares in Optimum Coal Terminal (Pty) Ltd, and the business of OCM.

The second order is for Centaur Ventures Limited (CVL), a Bermuda-based entity which was 50% owned, and almost entirely financed, by the Gupta family.

“The CVL claims are claims against OCM. They arise out of prepayments made by CVL to OCM for coal which OCM failed to deliver,” said Chaskalson.

OCM, OCT and Tegeta have all been in business rescue since 2018 when the Gupta family placed the companies in voluntary business rescue after they could not find any bank willing to deal with them or any of the SA companies they controlled.

“Throughout the processes giving rise to the Optimum purchase and the CVL claims, Mr [Daniel] McGowan was a close business partner of the Gupta family in CVL and in other state capture-related projects of the Gupta family, Salim Essa and Trillian.

“He has since fallen out with the Guptas but has taken great lengths to retain control over the CVL claims which are the proceeds and instrumentalities of state capture crimes from his days in partnership with the Gupta family and Essa,” the court papers read.

McGowan, the NDPP argued, used his control over the R1.3bn CVL claims to control the OCM and OCT business rescue processes and the OCM and OCT business rescue plans.

“Those plans are due to be finally implemented in a month’s time. They effectively propose to transfer the entire business of OCM and OCT to Mr McGowan’s Liberty Coal (Pty) Ltd and Liberty Energy (Ltd) in a debt for equity transaction in which Mr McGowan will effectively trade the CVL claims for control of the OCM and OCT businesses.

“One of the extraordinary features of this case is that the OCM and OCT rescue plans which are about to be implemented are plans built on proceeds of crime because they are structured around the CVL claims,” Batohi argued.

She said there was no positive evidence for McGowan to refute any of the evidence gathered by the NDPP showing the targeted property is the proceeds of crime.

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