If the money is not recovered within six months, the property must be sold to the highest bidder.
THE DIRECTOR of Public Prosecutions has successfully won an appeal in the Constitutional Court of South Africa that the family of the former Head of Department of Social Services and Population Development, Yolanda Botha, must pay the full amount of the renovations to her Monument Heights home of R1 169 068.49 to the criminal assets recovery account.
Failing payment within six months, the property at 12 Jawno Street must be sold to the highest bidder.
In summing up the details of the case, the judgment handed down by the Constitutional Court on March 26 pointed out that Botha was the HOD of the Northern Cape Department of Social Services and Population Development from January 2001 until April 2009.
“As HOD, she embarked on an unprecedented scale of corruption by awarding tenders to Trifecta Investment Holdings for the lease of government premises. Trifecta would acquire well-constructed but rundown buildings in the Northern Cape, renovate them and then lease them to government departments at lucrative and exorbitant rates. For example, one property was rented at R74.40 per square metre when its fair market value was R40 per square metre thereby resulting in the state paying almost double the value of the leased property. Ultimately the loss to the state was in the order of R26 billion and if the leases were carried to term would mean a loss of R57 billion.
“Trifecta received billions of rand as a result of these corrupt business opportunities. In exchange, in September 2009, Trifecta started renovation works on Botha’s family home, which cost R1 169 068.49. On February 28, 2010, Botha issued a certificate of indebtedness to Trifecta in the amount of R500 000. On March 10, 2010, a ‘loan agreement’ was concluded between Trifecta and Botha for the value of R500 000. Both the certificate of indebtedness and the ‘loan agreement’ were for far less than the cost of the renovations.”
In 2010, Botha was elected to Parliament but failed to declare the gratifications she had received from Trifecta according to the Code of Ethical Conduct for Members of Parliament. On February 11, 2011, after a press report, a parliamentary inquiry was launched into these alleged breaches. Botha’s defence was that she had received no benefit from Trifecta because she was required to repay the sums that Trifecta had spent on renovating her home.
The parliamentary committee found that Botha had breached the Code of Ethics and had received an improper benefit, and attempted to cover this up by a sham loan agreement.
While the parliamentary inquiry was ongoing, Botha paid two sums to Trifecta: on April 9, 2011 she purported to repay the loan in an amount of R371 054.66 from her Government Employees Pension Fund and a further R40 000 on April 28, 2011, amounting to a total of R411 054.66.
Thereafter, she, together with others, including former ANC provincial chairperson John Block, was charged by the National Director of Public Prosecutions (NDPP) with offences of tender corruption and other offences of corruption. Botha – while not technically found guilty as she passed away before the high court handed down judgment – was the subject of adverse findings by the high court.
The NDPP then sought a civil forfeiture order, in respect of the proceeds of Botha’s offences.
The matter was first heard in the Northern Cape High Court which found that the renovations were indeed, on the balance of probabilities, “the proceeds of unlawful activities” and the court ordered forfeiture of the entire property.
Botha’s mother, as the executrix of her estate, appealed the decision in the Supreme Court of Appeal. While the appeal court agreed with the high court that the renovations were indeed proceeds of corruption and money laundering, it held that it was wrong to have forfeited the entire property.
The Supreme Court of Appeal ordered R758 014.83 to be forfeited, reasoning that Botha had repaid funds to Trifecta and that those funds had to be taken into account in the amount to be forfeited.
“It is not disputed that the deceased paid an amount of R411 054.66 to Trifecta as part of the costs expended on the renovations. Mr Malan calculated the renovation costs at R1 169 068.49. Therefore the amount paid by the deceased has to be deducted from the renovation costs,” the Supreme Court of Appeal stated in its ruling.
The NDPP then approached the Constitutional Court seeking to set aside the part of the Supreme Court of Appeal order that ordered the first respondent to pay R758 014.83 instead of R1 169 068.49.
The Constitutional Court pointed out that bribery and corruption in public procurement have become systemic in South African society.
“Corruption affects us all. It intersects at points of social, political, economic and ethical discourse with no end in sight and thus remains an elusive malignancy slowly eroding our hard-won democracy. Whilst stories of the high-profile looters reach the media, the more low-key public officials who sit behind their desks committing acts of public procurement corruption with disturbing frequency may ultimately have an even greater catastrophic effect on our economy and society. In this case a bureaucrat who was a senior official in charge of public procurement was involved in bribery and corruption resulting in the loss of billions of rand for the Northern Cape and the country,” Judge Margaret Victor said in her ruling.
She stated further that public resources were largely beneficial to poor people, “it is they who suffer the harmful effects of corruption most grievously”.
“Corruption has become ‘an albatross’ around the neck of economic growth and a major hurdle to economic development.”
She said it was common cause that the renovation was the result of unlawful proceeds of crime.
Judge Victor pointed out that there was a central flaw in the argument that Botha “repaid” Trifecta. “She was not repaying Trifecta. She was, rather, attempting to obfuscate the unlawful origin of the proceeds.”
She added that there was no intention for Botha to pay back the so-called loan.
“The loan was a sham designed to disguise the real relationship between Botha and Trifecta. Initially, there was no loan between Botha and Trifecta. Rather, Trifecta disguised the renovations costs as expenses (not a loan to an individual) for another, unrelated project. It is clear that there was no intention for such expenses to have been repaid by Botha.”
She added that the payments to Trifecta were made in April 2011 after the commencement of the parliamentary inquiry. “In other words, it was only once suspicions arose that Botha attempted to effect repayment. Prior to that point, not a rand had been repaid. I am of the view that the ‘loan’ was in fact a sham designed to hide the unlawful origin of the proceeds.
“The money was not repaid in a moment of repentance but as a carefully designed scheme which was awash with criminal motive. There was no real loan between Botha and Trifecta, and there was no real debt between them. The repayments were designed to hide the improper relationship between Botha and Trifecta. It is important to impose a deterrent on this type of conduct and ensure that no one benefits from camouflaging such nefarious activities.
“If Botha were only to forfeit R758 085, the courts would, in effect, give her ‘credit’ for the fact that she tried to cover up the original wrongdoing. It will have the perverse effect of rewarding attempts to obfuscate corruption. On an analysis of the entire conspectus of facts, I find that the forfeiture of the entire R1 169 068.49 is proportionate.”
Judge Victor ordered that Botha’s estate must pay an amount of R1 169 068.49 to the state within a period of six months from the date of this order into the criminal assets recovery account. Failing payment, the appointed curator bonis is authorised to sell the property, Erf 3432, Kimberley, also known as 12 Jawno Street, Kimberley, by public auction or private treaty, at a reasonable price to the highest bidder and, subject to the rights of secured creditors, to pay the sum of R 1 169 068.49 and to disburse the net proceeds, after incidental expenses, to the estate of the late Yolanda Rachel Botha.
