Estina dairy project trial set to continue in July

The trial of two alleged Gupta associates linked to the R37.7m Estina diary project fraud has been put on hold until July 3.

Kamal Vasram and Saliesh Indurjeeth are out on bail.

In Wednesday's proceedings, Vasram's lawyer told the court he had flagged misrepresentations listed on the state's charge sheet. Advocate Jaap Cilliers said the state's charge sheet was based on misconceptions.

The state's first witness, SA Revenue Service (Sars) investigator Piet Swart, started testifying on Monday.

Vasram and Indurjeeth are facing charges of fraud, contravention of section 54(1)(A) of the International Trade Administration Act and contravention of regulation 22 of the Exchange Control Act.

The charges arise from a joint investigation by Sars and the Investigating Directorate (ID) into the failed Free State project. They have pleaded not guilty to all charges.

The state alleges the pasteurisation plant imported for the project was falsely declared as new and valued at $3.4m (R37.7m at the time). The court has heard, however, that two payments made for the equipment totalled $3.3m, leaving a shortfall of $100,000. 

The imported goods from India were invoiced to Estina by Gateway, an alleged Gupta front company in the United Arab Emirates.

Cilliers told the court the first misinterpretation in the charge sheet was the allegation the imported goods were not new but second-hand or used goods or scrap. 

“There are three misrepresentations listed,” said Cilliers.

When asked if he told the investigation officer in the matter he believed the goods were second-hand, Swart replied in the affirmative.

He said there were many reasons for them to investigate, among those being “the nature of the goods and the quality and the value was just too high”.

In an earlier explanation to the court, Swart said new goods did not require the submission/support of a permit, but with any second-hand goods the declaration at customs has to be supported with a permit in terms of the Customs Act.

Cilliers told Swart they had requested the state to provide documentation to prove whether the goods were new or second-hand. The state had responded it had no jurisdiction over or access to the Indian electronic system.

Swart said he had no knowledge of that.

According to Cilliers, late last year a document was also obtained containing information relevant to the case.

“We found the constructor's certificate of the manufacturers of the equipment. We recently only obtained copies and what appears in those documents that the state had in their possession, the constructor's certificate of manufacturers of these items that forms the subject matter of this case,” he said.

He said the equipment was manufactured in 2013.

Cilliers added the document in the state's possession at the time showed the charge sheet was based on the wrong information.

“The document shows the equipment was new. There is also an inspecting authority in India that had to inspect and certify equipment of this nature before it can be exported. And the chief inspector certified the equipment on November 23 2013 and they satisfactorily withstood the test,” he said.

He said the document stated that the equipment was manufactured in 2013, was completed at the end of 2013 and thereafter exported to Durban, SA. 

However, Swart said it appeared strange to him because the consignment was not paid in full. “It was short of $100,000,” he said.

Swart was also questioned on whether he tried to establish who the manufacturer was. He said he didn't. 

“I had no knowledge of who the manufacturer was. The invoice that became relevant doesn't even state who the manufacturer was. I had no knowledge who the manufacturer was in India. Was it expected from us to go on a hunt in India to check who the manufacturer was?” he said.

Cilliers replied: “On the equipment itself, the relevant identification numbers appear there, clearly marked identification numbers together with the manufacturers. So it wouldn't have been difficult. You didn't need to go to India, you would have simply gone to Vrede.”

However, Swart said he did not “necessarily agree with the statement”.

He said the application by the clearing agent, UTi South Africa (Pty) Ltd, on behalf of Estina (Pty) Ltd, was cleared by Sars' automated system and wasn't flagged as a risk. Because of this, there was no need for a physical assessment.

“It was a totally automated release with algorithm assistance and no individual from Sars examined the documents,” he said.

It is the state's case that on March 2014, Indrujeeth who worked for Estina issued and signed a customs clearing instruction on behalf of the company to UTI South Africa.

According to the state, the company is registered in accordance with the laws of SA and represented by Vasram, who was the sole director and shareholder.

The state alleges that Vasram and Indurjeeth were acquainted and associated in fact, acting on their own volition or in collusion, during the commission of the offences. The two individually and jointly acted as an importer.

According to the state, Vasram registered Estina with customs as an import and export business and Sars customs client.

On Monday, Swart told the court the accused acting on behalf of Estina issued a written instruction (clearing instructions), to UTi South Africa (now DSV South Africa). He said UTi South Africa is a licensed clearing agent in terms of section 64B of the Customs and Excise Act.

When advocate Neelan Ramsingh, defence lawyer for Indurjeeth, cross-examined Swart, he tried to quash any link of his client to the other accused.

Ramsingh said Indurjeeth was appointed as an administrator at Sahar and not Estina.

He asked Swart if there was a link found between his client, the other accused and the company other than his signature on the application document.

Swart maintained Indurjeeth was linked.

Ramsingh put it to Swart that apart from the signature of his client on the document there is no direct link between him, the company and the other accused.

“My client will come and testify that during the course of his employment, he received those documents from his line managers and based on that he then submitted them to UTI,” Ramsingh said.  

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