National prosecutions boss Menzi Simelane is facing an internal revolt after he pulled the plug — perhaps finally — on investigations into the arms deal.
This week Simelane ordered the Asset Forfeiture Unit (AFU) not to pursue an attempt to seize millions of rands — allegedly the proceeds of bribes from arms multinational BAE Systems — held offshore by arms-deal kingpin Fana Hlongwane.
This was after the AFU team had already obtained a provisional court order — a so-called “preservation order” — against Hlongwane. Simelane, in a detailed statement on Friday, defended his abandoning of the order, arguing that there was no evidence of criminal conduct on Hlongwane’s part and that “we should, in our desperation to fight crime and prove our worth, not be tempted to go overboard and find ourselves in a position where we face criticism for profiling certain people without legal justification.”
The AFU, headed by deputy national prosecutions director Willie Hofmeyr, ultimately answers to Simelane, whom President Jacob Zuma controversially appointed national director in December.
The Scorpions, now disbanded, dramatically raided multiple premises occupied by Hlongwane and BAE in December 2008, signalling a new front in the arms-deal investigation, which, until then had largely focused on Zuma and his financial adviser, Schabir Shaik.
In court affidavits motivating for the search warrants, the Scorpions, supported by investigators from Britain’s Serious Fraud Office, claimed that BAE had paid well over R1-billion in “commissions” — most of it covertly — when it sold South Africa military jets worth R16-billion.
Hundreds of million went to one agent: Hlongwane, adviser to then-defence minister Joe Modise.
BAE has since effectively admitted its commissions system amounted to bribery, settling prosecutions in the United States and United Kingdom for $400-million (R2,9-billion) and £30-million (R335-million) respectively.
The Mail & Guardian this week pieced together, from direct and indirect accounts, the events leading to Simelane blocking the AFU’s attempt to confiscate some of Hlongwane’s millions as the proceeds of crime.
The M&G‘s informants spoke on condition of anonymity, as they are not authorised to speak to the press.
Common to the accounts is that there is fierce anger and a perception that Simelane, who, in his previous job as justice director general, appeared to be obstructing cooperation between local and international arms-deal investigators, had finally pulled the plug on the entire arms-deal investigation.
Simelane is said to have taken a particular interest in the Hlongwane investigations when he visited the NPA offices in Cape Town after his appointment last year.
There, he was briefed about urgent work to comply with requests for cooperation from authorities in Liechtenstein, who had frozen what they regarded as suspicious money in accounts beneficially owned by Hlongwane.
Indeed, the M&G reported in 2008 that a Liechtenstein judge had written to the NPA about two frozen accounts, containing a total of about R35-million, with Hlongwane as the beneficial owner.
The judge stated: “It is suspected that frozen assets belonging to Fana Hlongwane — are linked with active and passive bribery and corruption by [BAE], using a system of international representatives.”
By the end of last year NPA and AFU officials were working against a strict deadline: the freezing order on one of the accounts in Liechtenstein would expire on March 14 — last Sunday — unless it could be reinforced with a court order in South Africa.
Simelane allowed preparations for a court application to continue, although he allegedly attempted to argue at a late stage that there was “no case”.
Two weeks ago, still before the Liechtenstein deadline, the AFU team obtained a preservation order from North Gauteng High Court Judge Willem van der Merwe.
Van der Merwe is the same judge who acquitted Zuma of rape.
A preservation order is a provisional order authorising the attachment of assets thought to be the proceeds of crime. It has to be followed up in 90 days with a final forfeiture application, which can be contested by the target.
As South African asset-forfeiture legislation is of extra-territorial application, the order would have enabled authorities in Liechtenstein to extend the freeze on Hlongwane’s funds there.
… order withdrawn
On Monday Simelane called in AFU head Hofmeyr in the presence of two of Hlongwane’s legal representatives, Christo Stockenström and Jaap Cilliers.
There, according to one source, Simelane all but instructed the lawyers to make representations on Hlongwane’s behalf as to why the matter should not be pursued.
Hlongwane’s representation was submitted a day later, after which Simelane ordered the AFU to drop the case.
Although an asset-forfeiture application does not in law have to be tied to a criminal prosecution, NPA and AFU members working on the matter are said to have viewed it as a precursor to criminal charges against Hlongwane.
Simelane’s decision all but rules out such action.
Cilliers refused to comment on Hlongwane’s behalf.
*Stefaans Brümmer, Adriaan Basson, Sam Sole and Jackie Mapiloko contributed to this article.