Estina was set up as a fraudulent project, state argues

By Andrew Moses Time of article published May 17, 2018

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Bloemfontein - Estina (Pty) Ltd never earned any clean money because it was a fraudulent project set up to siphon money from the Free State Department of Agriculture through a dairy project, the High Court in Bloemfontein heard on Thursday.

State lawyer Advocate Wim Trengove SC said Estina was never quite productive to afford giving loans to other companies as claimed by some Gupta-linked companies and individuals who launched an application to stop a preservation order on their properties and funds worth about R250.2 million.

Trengove said this as he launched a calculated come back in the case which had literally been obliterated throughout the morning by the lawyers of the applicants.

The companies and individuals are: Oakbay Investments (Pty) Ltd, Aerohaven (Pty) Ltd, Ashu Chawla, Oakbay acting chief executive officer Ronica Ragavan and former director Varun Gupta, Westdawn Investments (Pty) Ltd and Annex Distribution (Pty) Ltd.

Advocate Michael Hellens appeared for the first five applicants while Dawie Joubert represented the last two.

Trengove singled out R30 million transferred from a pool account held at the Bank of Baroda into the account of Oakbay. 

He said the movement of the money characterised dirty money as Estina could not afford giving loans.

“Estina never earned any money other than the proceeds of the (Vrede) dairy project. It was set up as a fraudulent project,” said Trendgove calmly.

“There was a clear link between the dirty money into Estina and the outflow to Oakbay,” he added.

Trengove said it was unfortunate that the applicants were trying to exonerate themselves saying there was no direct link between Estina and Oakbay, yet that statement actually exposes them further.

He said the claim that the loans were from Kamal Vasram, the then sole director at Estina clearly indicates there were illicit deals at play.

“They say there was no direct link to Oakbay but through Mr Vasram. That makes it worse for them. When Oakbay wanted to fund Estina, it was a loan made through Vasram. And when paying back, that money was then paid over to Oakbay. That makes it worse for them because Oakbay is still a beneficiary of dirty money,” he told court. 

READ: Legal giants battle in Gupta companies’ preservation appeal

Trengove also questioned several amounts of money paid to Aerohaven (Pty) Ltd saying they were made upon the instruction of Vasram and Ragavan to the Bank of Baroda. 

They include an amount of R9.5 million made on August 19, 2013 against a loan of R10 million, R19.5 million on 22 April 2013 against a term deposit of Estina of R25 million and R18 million paid out against a term deposit of Estina of R25 million.

Trengove said the crux of the matter was not that the implicated parties necessarily received proceeds of crime, but that they received money from a tainted party.

“The premise is not that the third party received proceeds of crime, but that they received an affected gift within a period of seven years. In this case, we are in that period,” he explained. 

Monies that were also paid to Westdawn and Annex, according to the state lawyer were not clean, hence they were being pursued because the state believes there is “prima facie inference that payments were made.”

He said the three individuals who were directors at the material time did not personally benefit from the alleged proceeds of crime but indirectly benefited from the crime.

Trengove said the applicants had tried their best to discredit the state case but they had failed to explain the movements of the funds and justify their legality.

“There's nothing of substance that my learned friends have made out,” he said in closing. 

But Hellens was not done. In his final response, he said state was only focusing on one aspect of the matter and thereby failing to substantiate their case.

“This case is not a case about whether anyone benefitted from proceeds of crime but whether anyone committed a crime… This is a case of who committed what crime and to what benefit? The loans from Vasram, let's they are suspicious, but to what benefit? There's no benefit indicated.

“The dirty money argument is a distraction… There is no case for the Asset Forfeiture Unit. There is no evidence Oakbay funded Estina,” argued Hellens.

Judgment was reserved.

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