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Daily Maverick
23-06-2025
- Politics
- Daily Maverick
Supreme Court of Appeal's verdict on Nulane case exposes flaws in prosecution and judicial oversight
The performance of the National Prosecuting Authority (NPA) has been a longstanding point of concern, with criticisms focusing particularly on the lack of successful prosecutions in cases arising from the era of State Capture. The implications of failings in the NPA, and the resultant lack of public confidence in the justice system, have serious implications for the rule of law. Political parties have frequently made calls for the resignation of the National Director of Public Prosecutions, advocate Shamila Batohi, despite her tenure coming to an end in 2026. One of the headline cases cited to demonstrate the shortcomings of the NPA is the so-called Nulane case. Multiple accused were tried in the Free State Division of the High Court but were discharged under section 174 of the Criminal Procedure Act. This provision allows for an accused to be found not guilty if there is no evidence at the end of the State's case on which the accused could be convicted. The State reserved several questions of law (a procedure that provides for the very limited circumstances under which the State may effectively appeal in criminal cases), and the Supreme Court of Appeal (SCA) has now handed down a judgment that has significant implications for the justice system in general. The case arose from a public-private partnership that had been intended to generate income through farming, manufacturing, and infrastructure expansion in rural areas of the Free State. Prosecutors alleged that a process followed where public funds were fraudulently extracted from the Free State Department of Agriculture and Rural Development, with funds being laundered through various Gupta-associated companies. No tender process Nulane Investments was appointed, without a tender process, to conduct due diligence and feasibility studies relating to the scheme. But the evidence was that it did not render services to the department, instead subcontracting the services at a cost of just over R1-million, while receiving almost R25-million. Several accused were charged with offences of contravening the Public Finance Management Act, fraud, and money laundering, only to be discharged by the high court. The SCA, however, decided most of the reserved questions of law in favour of the State. It found that the judge in the high court had made the 'disturbing finding' that had been 'central to the entire case' that the State's case had been 'abortive from the start' due to shortcomings in the authentication of key documents. The judge, the SCA found, had failed to look at the totality of the evidence, and had 'closed her mind to the evidence adduced by the State'. The shortcomings in the high court's judgment continued. The SCA found that the judge had applied the wrong legal test in applying the common purpose doctrine; admitted documents into evidence and then ruled them inadmissible; misapplied the rules on the admission of documentary evidence; and misinterpreted and misapplied key provisions of the Criminal Procedure Act. The SCA found the acquittal on one of the counts of fraud 'baffling' and was unequivocal in concluding that the high court had 'made numerous errors of law that resulted in the acquittal of the respondents'. As the SCA points out, the offences in question involved the misuse of public funds that subverted the aims of the project, which undermined 'the functionality of democratic institutions' and endangered the rule of law. The trial in the high court constituted 'a failure of justice' that 'erodes public confidence in the criminal justice system'. The SCA ordered that the accused could be retried for the offences of which the high court had acquitted them. The case provides some degree of vindication for the embattled NPA, although there remain several other cases where questions have been raised about the effectiveness of its prosecutions. Just one example is the recent decision, again from the Free State, where the high court ruled that the extradition of former Free State premier Ace Magashule's former personal assistant, Moroadi Cholota, from the United States was unlawful. Cholota and Magashule are among those accused of fraud and corruption relating to a R255-million contract for the removal of asbestos roofs in the townships in the Free State. And it of course remains to be seen how the State's case will fare as and when the Nulane trial resumes. Role of the judiciary But the SCA's findings do shift attention on to the role of the judiciary. Thus far, judges have largely escaped criticism for prosecutorial failures, which have largely been attributed to failures by the NPA and the police. The SCA's scathing findings about the high court judgment raise serious questions about the judge's handling of the case, and invite scrutiny of the role of judges in these cases. An intriguing element of the context to these cases was a previous request by the Free State Director of Public Prosecutions for the asbestos case to be heard by a judge from outside the province. The request was rejected by the leadership of the Free State High Court, but the SCA decision in the Nulane case may reawaken questions about the allocation of judges to hear these cases. This is particularly so since the high court judge in Nulane, who came in for such criticism by the SCA, was an acting judge. The SCA's finding revives concerns that such a high profile case should rather have been presided over by a permanent, and, by implication, more experienced judge. The use of acting judges is a regular feature of the South African judicial system, and many of our high courts would be unable to deal with their vast caseloads without the support of acting judges. But the Nulane decision provides a salutary reminder that the allocation of judges to such cases is a highly consequential decision, and one that will no doubt be carefully considered as and when the case resumes. DM
eNCA
12-06-2025
- Business
- eNCA
NPA wins appeal in R25m Nulane fraud case
JOHANNESBURG - The National Prosecuting Authority has welcomed its successful appeal in the Nulane corruption case. An acting Judge discharged the accused in the R25-million fraud and money laundering trial in April 2023. The accused discharged in the section 174 application include Iqbal Sharma and his company, Nulane Investment. Several Free State officials and Ronica Ragavan, worked for Island-site Investment, owned by the Gupta family. This judgment paves the way for the Investigating Directorate Against Corruption to reinstate the case. Sharma, his brother-in-law, Dinesh Patel, and several others were accused of defrauding the Free State government. Nulane was appointed irregularly to conduct a feasibility study for a dairy farm NPA Welcomes the SCA Judgment Upholding IDAC's Appeal in Nulane Corruption Case — NPASouthAfrica (@NPA_Prosecutes) June 12, 2025
Daily Maverick
12-06-2025
- Business
- Daily Maverick
Justice delayed, justice derailed — acting judge's ‘litany of errors' in Nulane case dealt blow to accountability
An acting judge's misunderstanding of the law has, for two long years, delayed accountability for alleged State Capture. The high court judge's pronouncements unfairly embarrassed the National Prosecuting Authority (NPA) and demoralised courageous prosecutors fighting to restore faith in South Africa's justice system. Thankfully the Supreme Court of Appeal (SCA) has now set aside the Nulane judgment. Stingingly, the SCA found that 'the acquittal of the respondents was unfair to the prosecution and compromised the administration of justice'. Why is the Nulane case so important? In 2022, a mix of officials and businesspeople shuffled into a cold Bloemfontein dock, facing charges of orchestrating a R25-million fraud. With this, the NPA brought its first State Capture case to trial. Although R25-million was a pittance compared with what the Guptas would later purloin, Nulane was a dress rehearsal for the later schemes. The fraud itself appears glaringly obvious. In 2012, a Gupta-linked, foreign scrap metal company suddenly announced its intention to invest in an emerging farmers project in the Free State. Strangely, the foreign company insisted that a company it did not name must conduct a feasibility study first. Somehow, Nulane, owned by Iqbal Sharma, was appointed to that role. Evidence showed how Free State officials set about manipulating procurement processes to falsely and quickly appoint Nulane as a sole supplier. The feasibility study simply was outsourced to Deloitte for just R1.5-million. Nulane merely slapped its logo on the final report and sent invoices to the Department of Agriculture. The money went to Nulane and R19-million then ricocheted through various Gupta-controlled bank accounts before being siphoned off to Dubai. By the time the trial began, the Guptas had long fled South Africa. Smaller fish faced charges for PFMA breaches, fraud and money laundering. Despite evidence to the contrary, much of it common cause, the high court outright acquitted one of the accused and granted section 174 discharges to the rest. The high court declared that there was 'not an iota' of evidence to even answer. The acting judge excoriated both the prosecutors and police for presenting a 'lackadaisical' case. The documentary evidence amounted to 'zilch', the judge proclaimed. The investigation was a 'comedy of errors', a phrase the judge called 'the understatement of the millennia'. This insult warrants scrutiny. Did the acting judge mean that no investigations across thousands of years, from Meletus's inquiries into Socrates, were more incompetently conducted than Nulane? Or did she mean the singular noun millennium, thus restricting her comparison to all the other bad investigations since January 2000? Ironically, the high court's reasoning is now discredited on all these scores. The SCA judgment chronicles a litany of errors, misconceptions and misconstructions; some so basic as failing to apply the elements of fraud to the facts. As for the acting judge's finding that the documents proved 'zilch', the SCA found otherwise. The documents and money flows established a prima facie case of fraud and money laundering which the accused should have been called upon to answer. On 'zilch', the SCA remarked: 'The use of this colloquialism is unfortunate; it does not belong in a judgment.' Thank goodness the State appealed. The stakes were high not only because the acquittals were wrong but because the high court judgment undermined extradition efforts. The collapse of Nulane led to the Guptas walking free in Dubai. The judgment also destabilised case theories for prosecuting other State Capture crimes. The court's position on accomplice witnesses, best evidence, common purpose and section 174 discharges created ripple effects that reverberate today. It is heard tell that the high court's errors emboldened magistrates in Free State courts to discharge other financial crime suspects with alarming ease. When cases are lost, criticism of prosecutors is often merciless. Media outlets joined the chorus of social media condemnation. The otherwise astute investigative journalism platform amaBhungane released a video suggesting that Nulane prosecutors lacked sufficient skills for what should have been a slam-dunk case. Legal reporting guru Karyn Maughan proclaimed that the acting judge 'was absolutely justified in describing it as a comedy of errors'. Maughan said she would be 'absolutely amazed' if the State succeeded in its appeal application. It will be amazing to see an apology to the vilified prosecutors and SAPS investigator. The media's ridicule compounded what was an intensely demoralising experience for NPA advocates Witbooi and Serunye and SAPS investigator Lieutenant Colonel Mandla Mtolo. How they managed to persevere despite such unfair criticism is hard to imagine. Of course every prosecution can be improved. But it was the fact that the judge had 'closed her mind to the evidence adduced by the State' that really prevented the NPA from advancing the State's case, as the SCA noted. The NPA's resilience deserves praise. In this instance, the real issue lies not with prosecutors but with wiser case allocation. State Capture cases cannot be entrusted to judges susceptible to their own 'comedy of errors'. The NPA chief, advocate Shamila Batohi, has herself implored heads of court to appoint experienced judges to seminal matters. A similar hint rang out in Bloemfontein's quaintly dilapidated SCA courtroom B when State counsel, Nazeer Cassim SC, remarked that high-stakes cases should be assigned to judges capable of navigating complex legal terrain. It was acting SCA Justice Cagney Musi (also Free State Judge President) who assigned the Nulane case to the acting judge who so badly mishandled it. As Justice Musi pored over his division's work, he must have regretted his decision. Wayward acquittals are a danger. They imperil South Africa's fragile hope of salvaging itself from ruin. Without the credible prospect of prison, South Africa's kleptocracy will only expand until the justice system is nothing but a laughable, hollow threat. One can only but agree with the SCA's finding that the way the high court trial was conducted 'can be summed up in a single sentence: This was a failure of justice. Regrettably, this erodes public confidence in the criminal justice system.' This critique is not about singling out a judge any more than a judge singled out police and prosecutors. Rather, Nulane serves as a lesson in how mistaken opinions, judicial and public, can delay accountability and demoralise those tasked with wielding justice on society's behalf. Nulane also forces us to confront larger questions. 'How many other Nulane judgments are out there?' This is a troubling question. Much like the temperature this week, the standard of acting appointments has, by all accounts, been plummeting for some time. This phenomenon is so noticeable, it has crept into techniques of civil litigation. No matter how strong a party's case may be, many are induced to take a puny settlement rather than risk the potluck of the court roll. Yet this should not be so. High court trials carry huge social stakes. They're not a CCMA con-arb or housebreaking case. It's all very well to develop lawyers or magistrates by gifting them an acting stint. However, acting judges still need to be drawn from an intellectual and professional elite. A deep, nonracial strata of legal excellence exists in South Africa. Many inspired acting appointments are routinely made and these represent the breadth of legal talent in South Africa, so this is not a 'transformation' issue. The problem is the almost back-of-the-envelope selection of adjudicators we see sometimes. The 'proletarianisation' of the Bench is a threat to the state's legitimacy. The goals of inclusion and professional development must be tempered by a primary duty to select judges capable of deciding cases competently. This is the essence of the 'fair public hearing' promise the Constitution contains. It is especially hard for poor and already marginalised litigants to fix the damage made by learner-judges on appeal. As things stand though, NPA prosecutors have been vindicated by the SCA. Nulane also teaches judges and commentators alike to be less star-struck by defence counsel and their adamant speeches and charming tutelage. A careful examination of the record, not only snippets of the argument or judgment, will often reveal that less-flamboyant career prosecutors have indeed made out a case, at least to warrant the accused mounting a defence. Shakespeare's Hamlet lamented the law's delay and the insolence of office. Thankfully, the SCA has set matters right, for now. The NPA can do better but so can the judiciary. South Africa cannot afford further derailments in its pursuit of justice against the greedy stokers of our ruin. DM
eNCA
12-06-2025
- Politics
- eNCA
SCA to rule in Nulane Investments case
BLOEMFONTEIN - The Supreme Court of Appeal is set to rule on the NPA's bid to overturn the acquittal of Nulane Investments fraud accused. The suspects were arrested for fraud and money laundering amounting to R25-million. The State is pushing for a retrial of Gupta associates and senior Free State officials. The first State Capture trial ended in the accused walking free. At the heart of the matter are government payments to Nulane for a feasibility study.
Eyewitness News
10-06-2025
- Business
- Eyewitness News
Road Accident Fund is wasting millions on 'chaotic' court cases
A judge of the Gauteng High Court in Pretoria has blasted the Road Accident Fund (RAF) for its 'chaotic approach to litigation' which has resulted in huge losses of public money. Courts are swamped with RAF cases, many of them without merit or with over-inflated claims for compensation. But 'the main problem lies with the RAF', said Judge Jan Pretorius in a recent judgment. The RAF does not deal with its matters properly, does not send lawyers to court to oppose applications or, if it does, does not provide them with any instructions. This results in 'default' judgments. The fund would then apply to rescind the judgments, often on baseless grounds. 'In this manner huge sums of money, public money, it must be emphasised, are lost,' said Judge Pretorius. In the week of 5 May, he had granted judgments against the fund of R25-million, and two other courts made default judgments in the same week which he said would have added R50-million to the RAF's liabilities. '[A]t the same time it pleads poverty.' He pointed out that in two matters with over-inflated claims, the RAF had not provided any expert reports to assist the court in assessing whether the claims were reasonable. The case before Judge Pretorius was an application by the RAF to rescind part of a previous order granted in favour of a road accident victim in 2021. The RAF had been ordered to pay past medical expenses of R223,000 and future loss of earnings of R6-million. The RAF's rescission application was made outside of the allowed timeframe. It gave no explanation for this. A more 'serious problem', Judge Pretorius said, was that the RAF made three untrue submissions to the court: that the 2021 hearing was heard virtually, that its defence had been previously struck out, and it had been barred from making submissions to the court. The record showed that the matter had been heard in open court, its defences were never struck out and the fund was represented at court by Ms N Xegwana from the office of the State Attorney. It had been placed on record that she was there to 'note the judgment' and had no instructions to make any submissions. Judge Pretorius said that because of these 'false averments', there was no legal basis to rescind the judgment. He had advised Ms N Kunene, who drafted the affidavit with the false claims, and Tonya de Beer, who deposed it, to appear before him. He was considering making them personally pay the costs of the litigation. Kunene then explained that she drafted the affidavit after receiving a memorandum from the RAF in which the alleged facts were spelled out. She did not know they were not true. She said De Beer was merely asked to sign the affidavit and she herself did not have knowledge of the facts of the matter. Judge Pretorius said this was 'highly unacceptable' and 'perturbing'. 'The result is that the respondent (the claimant) has been dragged to court to oppose an application based on falsehoods.' He said 'although I cannot express my disapproval of Ms Kunene and Ms de Beer's conduct strongly enough, I accept that they did not set out to mislead. The falsehoods originated from the fund, who misrepresented the facts to them.' Because of this he would not make a personal cost order against them. He ordered the RAF to pay costs on a punitive scale. 'This application has added to the applicant's financial burdens in that it will be required to settle the costs of a doomed application which resulted from its own inept management of its affairs.' LOSING BY DEFAULT 'The main problem lies with the [RAF and its chaotic approach to litigation, of which this application is but one example,' Judge Pretorius wrote. He said when the fund had terminated the services of its panel attorneys, there had been warnings that default judgments would result and inflated claims would not be properly scrutinised. This proved to be true and five years later, the RAF's system was largely still 'in chaos'. 'Many cases are heard every day in which the applicant is not represented at court or, if it is, instructions are not forthcoming.' Judge Pretorius said this was in spite of the fund being given special legal treatment, not extended to any other litigant — in that it was given multiple opportunities to comply with the rules of court. 'Notwithstanding the multiple warnings it has received, I still had 41 unopposed matters on the default roll in the week of 5 May 2025. In eight of these matters, the defence had been struck out and in 13, the fund was under bar [failing to file papers within the prescribed time]. In 20 cases the fund had not even noted an appearance to defend.' He said this failure by the fund to properly exercise its constitutional duties 'required urgent attention'. This article first appeared on GroundUp. Read the original article here.
