Durban - The state has once again failed to get its hands on the assets of corrupt Richards Bay businessman Ishwarlall Ramlutchman.
In a reserved judgment handed down in the Pietermaritzburg High Court on Monday, Judge Daya Pillay and Acting Judge Piet Bezuidenhout found that the state had failed to prove the value of the benefit Ramlutchman had received by defrauding the provincial Department of Public Works.
Therefore, they denied the state leave to appeal against the decision of Commercial Crime Court acting magistrate Nalini Govender. In December 2013, the magistrate dismissed the state’s application for Ramlutchman’s assets, to the value of R52 million, to be confiscated as “proceeds of his crime”.
The month before, Ramlutchman, who owned AC Industrials Sales and Services, pleaded guilty to defrauding the department by tendering for contracts using false documents.
He was convicted of 21 counts of fraud and one of corruption and given two suspended sentences and a fine of R500 000.
His company had been awarded contracts for work on 14 schools and two hospitals between 2006 and 2008 based on false Construction Industry Development Board gradings.
The gradings determine the scale and value of the contract companies may tender for.
The state’s confiscation order sought to seize the value of the contracts involved and not the profits obtained. It argued that if it had not been for his fraudulent activities, Ramlutchman would not have been awarded the contracts.
Judge Pillay said in Monday’s judgment that it had been submitted by the state that the benefit in this case was the equivalent of the proceeds of unlawful activities, which in this case equalled the amount of the proceeds of the contract for building the schools.
The state had failed to discharge the onus of proving the amount of the benefit, the judges said.
“On a purely factual and common-sense approach, the entire amount received as the proceeds of unlawful activities cannot be a benefit if it is not exclusively a gain or profit.
“The cost of the construction component of the proceeds received cannot rationally be equal to a gain or benefit.
“To treat it as such and order its confiscation would result in the state unjustly enriching itself at the expense of the respondent.”
She said it would amount to Ramlutchman’s paying more than the amount by which he had benefited, which was prohibited.
Judge Pillay said the magistrate had correctly dismissed the confiscation application.
The Mercury