Hawks swoop on ANC leader’s mine

On the block: John Block could be in more trouble after the Hawks said they had taken over the forgery investigation as part of a wider probe into his activities. Picture: Liz�ll Muller.

On the block: John Block could be in more trouble after the Hawks said they had taken over the forgery investigation as part of a wider probe into his activities. Picture: Liz�ll Muller.

Published Jun 5, 2011


Northern Cape ANC leader Fikile John Block could be looking at more trouble with the law after the elite Hawks detective unit this week took control of an investigation into the illegal mining of salt by a company of which he is a director.

This followed a ruling by the Supreme Court of Appeal (SCA) that Block’s company had been mining salt illegally for more than five years – and ordered that copies of the judgment be delivered to the national police commissioner, the national director of public prosecutions and the Prosecuting Authority and the minister of the Department of Mineral Resources (DMR) to ensure the matter is taken further.

Hawks spokesman Colonel McIntosh Polela confirmed they had taken over the forgery investigation and said the matter was being linked to a cluster of investigations into the activities of Block, including the ongoing probe into his association with embattled Uruguayan businessman Gaston Savoi, whose company Intaka sold medical equipment to Northern Cape health authorities.

Accepting that the permit under which Block’s SA Salt (Pty) Ltd had been operating since 2005 was not only fraudulent, but actually and physically forged, SCA Judge Azhar Cachalia registered strong criticism of the police for failing to investigate the forgery. He said it “beggars belief that officials of the Department of Minerals and Energy (now DMR) who dealt with this matter, purported to validate the permit even though it visibly was not valid, and the DME had no record of it”.

The questionable goings on in the bleak and remote Vrygrond salt reserve were brought to light by The Sunday Independent in April last year. We exposed the alleged complicity of the DMR in riding roughshod over its own regulations to apparently promote the interests of SA Salt over the legitimate contract held by Saamwerk. We also reported that lawyer Gawie Hendrikz, consulting for Saamwerk, had allegedly been subjected to death threats as a result of his advocacy.

Subsequent to the exposé, Block – known as the “King of Kimberley” in reference to the political influence he wields in the Northern Cape – was arrested and charged with fraud, corruption and money laundering in connection with an estimated R112 million tender fraud.

The charges arise from the sale by Intaka of water-purifiers and oxygen generators to Northern Cape hospitals, allegedly at vastly inflated prices and without following proper procedures.

Block was a director of Savoi’s Intaka Northern Cape and, according to the prosecution, was also paid “commissions” for securing public sector contracts in the province. The Intaka prosecution is being handled by the National Directorate of Public Prosecutions and investigated by the Hawks.

Ruling this week Judge Cachalia upheld an earlier decision of the Kimberley High Court ordering SA Salt to surrender the concession it had been exploiting illegally since 2005. The rightful permit holder – both courts affirmed – was the Saamwerk Soutwerke consortium, which, in 2005 applied through the proper channels for rights to the R80m concession at Vrygrond near Upington.

Saamwerk, however, was prevented from launching its operations when SA Salt – which had been mining the claim before the new order mining rights scenario kicked in – produced a rival permit to the salt reserve, supposedly issued on the same day the licence was given to Saamwerk.

SA Salt’s permit was deemed by the DME’s regional officials to take precedence as it was a continuation of a permit granted to the company between 2003 and 2005. Stumbling blocks – roundly repudiated in Judge Cachalia’s ruling – were also set up on technicalities around Saamwerk’s environmental impact studies.

But, it later transpired, the SA Salt mining permit was not recorded on the books of the DME in the first place. It also emerged, when the licence was subjected to expert forensic scrutiny, that the permit document produced by SA Salt was a fake. It had been generated by three different computer printers and apparently “cut-and-pasted” together.

Despite the mounting evidence of skulduggery, however, the DME declined to intervene to assert Saamwerk’s rights, and continued to affirm the validity of SA Salt’s claim – despite the fact that it was not validated in the DME’s own master records.

Meanwhile, SA Salt continued to mine the Vrygrond reserve.

Block’s fellow directors in the controversial SA Salt operation include the politically connected ANC mayor of Upington, Gift van Staden, as well as North Cape businessman Andre Blaauw, and the latter’s aged mother, Cornelia.

In December 2009, however, the tide was turned when Judge Hennie Lacock in the Kimberley High Court found decisively in Saamwerk’s favour, ordering SA Salt to cease mining and the DME to validate Saamwerk’s permit.

Judge Lacock also referred the matter of the forged licence – among other irregularities – to the SAPS for criminal investigation.

But nearly two years later, as Judge Cachalia noted with “dismay”, no visible progress has been made with police investigations.

Judge Cachalia also said it was “curious – and troubling – that SA Salt adduced no evidence by any of its officials to explain how it came to possess MP169/2004 (the forged permit). At the very least one would have expected Block, who, on SA Salt’s behalf, had produced the permit at the meeting with the DME on 13 March 2007, to have explained where he got it. So it is hardly surprising that the high court later found the permit to be a forgery, and that someone in SA Salt’s service was aware of this.”

Meanwhile – on the strength of having lodged an appeal against the Lacock ruling – SA Salt refused to vacate the claim and allow Saamwerk to commence mining.

After the Cachalia judgment, they now have 30 days – from June 1 – to vacate the concession. The DMR, in terms of the judgment, was given seven days to authenticate the legitimate Saamwerk claim to the Vrygrond reserve. Meanwhile, Saamwerk is gearing up for a massive damages claim against SA Salt and the department.

“Conservatively estimated, the numbers add up to more than R30m,” Hendrikz said.

“But by the time we’ve finished with our forensic accounting, it could be as high as R40m or even R50m.” The claim is on top of about R3.5m SA Salt and the DMR have jointly been ordered to pay in legal costs.

Approached for comment, Block, through his spokesman Lesego Letebele, sought to distance himself from the debacle.

“After careful consideration of the judgment of the Supreme Court of Appeal, it is clear that there is no suggestion of impropriety on the side of MEC Block,” Letebele said.

“We note that the said judgment would be referred to the various government institutions for consideration and await responses from these authorities before any final statement is made.”

Judge Cachalia was assisted by Appeal Court Judges Brand, Heher, Ponnan and Theron in handing down his ruling. - Ivor Powell

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