Mosebenzi Zwane is accused No 1 in Free State dairy farm case

Mineral Resources Minister Mosebenzi Zwane, the three Gupta brothers - Atul, Rajesh and Ajay - and their associates will be charged with money laundering in the next few weeks in what will become the first state capture case to be prosecuted.

Zwane will be accused No1 for his role in a sophisticated and elaborate scheme that allegedly siphoned off R220-million meant to benefit poor farmers, to fund the Guptas' luxurious lifestyle.

Atul, Rajesh and Ajay Gupta will be accused No2, 3 and 4, respectively. Other accused include former CEO of Gupta-owned Oakbay Nazeem Howa, Sahara Computers CEO Ashu Chawla, Oakbay CEO Ronica Ragavan, relative Varun Gupta and Kamal Vasram, the sole director of Estina, the company to which the R220-million was paid by the Free State government.

News of the finalised indictment, which is sitting with NPA boss Shaun Abrahams, comes as it emerged this week that the family have been put under surveillance by international law enforcement agencies.

The Sunday Times can reveal that South African law enforcement authorities have obtained co-operation agreements from the Indian, British and United Arab Emirates governments, which are said to be ready to assist when asked by Pretoria.

The latest developments come a week after the NPA's Asset Forfeiture Unit obtained a preservation order against the Guptas, their companies and associates for the millions paid by the Free State agriculture department to Estina, in a project meant for poverty alleviation.

According to the indictment, the Guptas, Zwane and their associates will face three charges: money laundering; assisting others to benefit from unlawful activities; and the acquisition and possession of proceeds of unlawful activities.

Each count carries a prison sentence of up to 30 years or a fine of up to R100-million.

Zwane, who was the MEC for agriculture and rural development in the Free State at the time of the Estina scheme, is accused of making millions available for the Guptas.

He played a central role in the establishment of the Vrede Dairy Farm Project, which was handed to Estina, a Gupta-linked company, without a tender. Estina director Vasram, a former Gupta employee, had no experience in farming or agriculture.

The indictment alleges the Guptas used some of the money to pay for an extravagant family wedding at Sun City in 2013 and to buy a private jet and a fleet of luxury cars.

Estina also transferred R10-million directly into Atul Gupta's bank account.

Papers attached to the indictment detail Zwane's role in the scandal, which includes granting the 99-year lease for the Vrede dairy farm.

The indictment further alleges that:

• Zwane was key in persuading the provincial government to adopt the dairy project;

• R84-million was transferred from Estina to a Gupta shelf company in Dubai for no work done; and

• A bank account in Dubai that was used to launder money back to Gupta entities in South Africa was closed in 2014, a year after the millions were paid by Estina.

It is understood the Guptas have been out of South Africa since late last year. They are believed to be in India.

"We have surrounded the Guptas and they have nowhere to go. They have been kept under watch by our counterparts everywhere and we have made good progress on tracing the monies that went out of South Africa," said a senior police official with intimate knowledge of the investigations.

It's believed the Guptas have moved an estimated R100-billion out of South Africa to Dubai, bought expensive properties - including an R18-million apartment in the Burj Khalifa skyscraper for President Jacob Zuma's son Duduzane - and set up companies there.

NPA spokesman Luvuyo Mfaku said: "We have mutual legal assistance protocols with our counterparts in foreign jurisdictions. Where there are no formal protocols, we request assistance based on the principle of comity - engagement between the parties and rendering assistance on issues relating to securing evidence in foreign jurisdictions."

He declined to confirm whether the NPA had secured co-operation with its British counterparts and whether Gupta-linked accounts had been frozen overseas.

"We have formal protocols relating to MLAs [mutual legal assistance] and extradition-related issues with the UK. We are not at liberty to divulge the nature of our engagements with our counterparts," said Mfaku.

But a senior NPA official confirmed that investigators working with the AFU had made contact with the relevant authorities in the UK, India and Dubai.

The AFU, which raided ANC secretary-general and Free State premier Ace Magashule's office on Friday, discovered that hundreds of millions of rands meant for the dairy farm were dispersed into numerous accounts of Gupta companies, individuals and their business associates.

The Sunday Times established this week that a R15-million down payment from Estina was used by Gupta associates Salim Essa and Iqbal Sharma to pay for the acquisition of a company called VR Laser Services Investments in December 2013.

John van Reenen, from whom Essa and Sharma bought the company, told the Sunday Times that he had received the down payment as part of a deal worth more than R100-million.

"I didn't know where the money came from but I was informed by my lawyers when the payment was made. The rest of the money was to be paid in March the following year.

"I had sold the business to Salim Essa and the property to Iqbal Sharma," he said.

The company made headlines in the past two years when it entered into a joint venture with state-owned arms manufacturer Denel. Denel cut ties with the Gupta-linked company after the negative publicity and opposition from the National Treasury about the venture.

While the AFU spent the week finalising its investigation into the Vrede dairy project, it said it was also ready to move on to the next phase of its multipronged investigations.

A source close to the investigations said the unit was ready to start drafting papers for the seizure of the Gupta-owned Optimum and Koornfontein coal mines.

The source said there was "irrefutable evidence" that the Guptas obtained the mines through illegal means.

The AFU is seeking to prove that the purchase of the two mines was done through corrupt means and involved bribery of officials in state entities.

It is also seeking to prove that the R600-million prepayment that Gupta-owned Tegeta received from Eskom for coal supply from its Koornfontein mine was illegal as it was not used to develop the mine and ensure stable coal supply.

Instead, the source said, the prepayment was used to secure the Optimum mine after the Guptas allegedly bribed officials in Eskom and other state-owned entities.

The AFU also has its sights set on seizing the mine rehabilitation funds of these two mines, which exceeded R1.6-billion.

The Guptas allegedly used the rehabilitation fund of the Koornfontein mine illegally as collateral to secure the Optimum mine. Currently, there is a tentative freezing order on that money after civic group the Organisation Undoing Tax Abuse approached the courts.

"Once we have this in the bag we will go after everything else. We are working in phases. We will recover all the money stolen," the source said.

The source said they were in the formative stage of collecting evidence on the Guptas' previous media holdings, the New Age newspaper and ANN7.

Last year, the family announced that they had sold the New Age and ANN7 to Mzwanele Manyi through vendor financing.

But the AFU said this would not stop them from trying to ascertain whether these companies survived on milking state coffers.