The Constitutional Court on Friday declared the Investigative Directorate for Serious Economic Offences (IDSEO) and the South African Revenue Service (SARS) were justified in raiding the home and business premises of controversial motor industry tycoon Billy Rautenbach.
During the raid the two state organs seized three truck-loads of Rautenbach's papers and computer data.
The warrant for the raid was granted because the SARS and IDSEO believed Rautenbach was involved in tax fraud, cross-border arms smuggling, fraudulent double discounting and other fraudulent activities.
Rautenbach and the Wheels of Africa group immediately appealed to the Transvaal High Court, claiming that sections of the National Prosecuting Authority Act, in terms of which the warrant was granted, were unconstitutional because they violated the constitutional right to privacy.
Judge Brian Southwood granted Rautenbach's order, but also referred the matter to the Constitutional Court for confirmation.
Rautenbach, a Zimbabwean entrepreneur with mining interests in the Democratic Republic of the Congo, had a 50 percent interest in Hyundai's operations in South Africa and Botswana.
The nine companies in the Wheels of Africa group, including Hyundai Motor Distributors, went into liquidation earlier this year after creditors claimed the company was in severe financial difficulties.
Southwood said the Act's provisions were unconstitutional because they allowed a judicial officer to grant a search warrant when there were no "reasonable grounds" to suspect that an offence had been committed.
Constitutional Court Deputy President Pius Langa, in his judgment, said this reading of the Act was not correct. The other 10 Constitutional Court judges conferred.
Langa said the Act properly balanced the right to privacy, entrenched in the Bill of Rights, and the "important interest" of the state in the effective investigation of criminal activity.
Spokesman for National Director of Public Prosecutions Sipho Ngwenya said the directorate was "extremely happy" with the ruling. He said it proved that the directorate was acting legally.
"It will go a long way to combating serious economic offences," he said.
Langa said the Act's purpose was to allow preliminary investigations into certain serious crimes. These directorates were established to investigate certain serious offences and are, in terms of the Act, empowered to conduct inquiries and "preparatory investigations" on the strength of a warrant.
Three directorates have been established to probe serious crime. One of these is the IDSEO, charged with the investigation of incidences of serious fraud, theft, corruption and other serious economic offences.
While an individual's right to privacy was undoubtedly violated by the search and seizures allowed by the Act, there was adequate justification for this, Langa said.
He said the Act made provision for judicial officers to grant search warrants for a preliminary investigation to determine whether there were reasonable grounds to believe that an offence specified in terms of the Act had been committed.
Timing was often crucial in this, he said. If a directorate's members had to wait this could mean that initial investigations which might be "sensitive and crucial" were not allowed.
The Act also required that a judicial officer should only grant a warrant when there were reasonable grounds to believe that articles connected with the investigation were to be found on the premises to be searched. - Sapa