NPA seeks to recoup funds used by Gupta family to purchase Glencore Optimum Mine

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The National Prosecuting Authority (NPA) is seeking to recoup funds used by the Gupta family to purchase Glencore Optimum Mine.

But, the R2 billion paid for the coal mine is just a small drop in the ocean of the funds the family allegedly gained from state-owned entities.

Some experts say this move by the NPA could set a precedent and send a message to those implicated in state capture and corruption.

Glencore Optimum Coal Mine supplied coal to power utility Eskom for years until it was put under business rescue in 2014.

The relationship between the power utility and the coal mine soured, amid allegations that it was supplying Eskom with poor quality coal.

The company was then acquired by Gupta-owned company, Tegeta for R2 billion – the exact amount that Glencore was fined for providing poor quality coal.

In 2018, Optimum Coal Mine was put under business rescue, following a slew of allegations at the state capture commission of inquiry.

It is alleged that the Gupta family captured the state and subsequently acquired assets through state funds.

Gupta assets have since been seized and are being sold off to recover the money due to the state.

Last week, the Investigating Directorate of the National Prosecuting Authority approached the high court to stop the Optimum Coal Mine Business Rescue process.

Investigating directorate Spokesperson Sindisiwe Seboka says, “The High Court of South Africa, Gauteng division will hear the preservation application on March 8, 2022. In the first application, the id seeks to preserve all of Tegeta’s shares in Optimum Coal Mine. It is the ID’s case that all of these assets were acquired with the proceeds of crimes perpetrated against South African SOEs, including Transnet and Eskom.”

The NPA submitted two charges before the court in an attempt to stop the BRP process. The first charge aims to recover the cash obtained by the Gupta’s for the 2016 purchase of the coal mine.

And two, to preserve a R1.3 billion creditor claim held by Templar Capital which stands to acquire the coal mine.

Templar Capital is an international company in Bermuda, owned by a Gupta associate Daniel McGowan.

Corporate law experts say should the NPA win this case, it would set a precedent and a warning to other companies that purchase entities using proceeds from crime.

One South Africa Movement Mmusi Maimane says: “Given the light of the fact that the BRP value has been interfered by a company that was even trying to recoup more funding for the Gupta’s, you realise the danger that the Gupta’s have become to South Africa. You realise how much state capture moves beyond just the precedency it moves to even the private sector companies.”

The Gupta family left the country years ago, despite serious allegations of state capture and corruption against them.

Law enforcement authorities still await a decision on their application for Interpol Red Notices to be issued, seeking permission to locate and arrest individuals implicated in state capture. It’s believed this could eventually lead to the Guptas’ prosecution.

The affidavit submitted by the NPA, shows a breakdown of where the Guptas secured their funding in 2016 – in time for the Optimum Coal Mine purchase.

There were six transactions that happened in April of 2016, amounting to over R2 billion.

These include an Eskom coal pre-payment of R728 million to Tegeta, followed by other transactions in the same month of over R1.3 billion to Oakbay investments, Albatime, Trillian Management Consulting Firm and Centaur mining.

One South Africa Movement Leader Mmusi Maimane says South African citizens are now the ones paying for state capture.

“Where I feel the greatest victims of this issue, in essence, are the people of Soweto and many communities who still don’t have electricity because what it’s meant is that many of us are experiencing load shedding as a function of what historically was called barred or grade coal.”

The NPA’s case will be heard at the High court in Johannesburg, on the 8th of March.
Maimane says the Guptas are still trying to help themselves from South Africa’s resources. And he maintains that it’s about time that they are brought to book.

The commission hears evidence related to Eskom from former Glencore CEO: