Zondo inquiry raid on Gupta-linked businessman was unlawful, says judge
Johannesburg - The Commission of Inquiry into State Capture abused its powers when it raided and seized - without a court order - control of safe deposit boxes belonging to a Joburg businessman on suspicion that he received a R50million bribe from Gupta linked companies.
This is according to the South Gauteng High Court which ruled in favour of Kubentheran Moodley on August 21
The Zondo commission subsequently appealed the ruling and lost last week. In her ruling on August 21, Judge Lebogang Modiba found that the commission’s investigators “exceeded their authority” when they accessed Moodley’s rented safe deposit boxes at the state of the art security facility in Houghton Estate, known as Knox Titanium Vault Company, on June 24.
This came after they raided and took control of Moodley’s boxes as part of their investigation into alleged state capture.
The Zondo commission was set up by former president Jacob Zuma to probe allegations of corruption after the release of the State of Capture Report by former public protector Thuli Madonsela.
It believes that Moodley stashed in the safe boxes ill-gotten money from a company linked to the Gupta family.
Moodley’s company, Albatime, was a consultant for Regiments Capital, which is linked to Trillion, one of the companies owned by the Gupta family.
Regiments Capital was awarded state contracts worth about R228million by Transnet since 2010.
The businessman, who argued that the Zondo commission had no business raiding his safe boxes, since he was not criminally charged nor ordered to appear before it, approached the court for relief.
The judge said the commission had no powers in terms of a summons issued to instruct a third party to grant it access to a safe rented by a client.
According to court papers, the commission’s investigators gained access to Moodley’s safe boxes on June 24 this year and subsequently replaced its locks.
“On both Moodley’s and Knox Vault’s version of what transpired when the investigators attended Knox premises, they exceeded their authority.
“The state capture commission has no powers under summons issued in terms of Regulation 10, to instruct a third party, in this case, Knox Vault, not to communicate with a client who keeps items in a safe deposit with it and to refuse the client access to his safety deposit boxes,” said Modiba.
“It has no powers to take over the rental of the relevant deposit boxes and have a client’s keys replaced with those issued under its rental agreement.
“The state capture commission may only derive such power from a warrant for search and seizure issued by a judge in chambers, it sought the warrant after the fact,” she said.
However, the commission later applied for a search and seizure court order against Moodley’s safe boxes, which was granted by the same judge.
Despite the successful application, Judge Modiba raised concerns about the commission’s failure to obtain a court order before searching and seizing Moodley’s safe boxes.
“This court is gravely concerned by such unauthorised conduct.
“It is important to state here, that by granting the search and seizure warrant, this court does not condone such conduct.
“The question whether it is proper to issue a warrant for search and seizure under these circumstances is one that arose in the warrant application. It was argued and considered there,” she said.
Moodley’s legal challenge is believed to be one of the reasons behind the mysterious resignation of the commission’s acting secretary Peter Pedlar, who left the inquiry to start a new job in the Free State just days after the businessman filed his court papers.
Pedlar is the one who filed the “illegal” search and seizure summons against Moodley.
He could not be reached for comment.
In his court papers, Pedlar alleged that Moodley’s boxes contained “stacks of cash in different currencies including the rand, the US dollar and what looked like Chinese currency.”
He claimed that the investigators could see at a glance without going through the boxes some KrugerRands, and a watch in a shopping plastic bag.
He also alleged that:
- Moodley may have been in criminal or irregular conduct.
- Moodley might have been part of a money-laundering scheme.
- Payment received by Albatime was unlawful.
- Certain Transnet executives and prominent politicians might have safe deposit boxes containing bags of money at Knox.
- There was unlawful storing of foreign currency.
- That Moodley is not fit to be called a businessman.
In response, Moodley argued that Pedlar misled the courts and submitted “defamatory” statement just to gain access to his safety deposit boxes.
He also claimed that:
- The commission summoned a third party for access to his deposit boxes.
- Knox breached his contractual obligations.
- No information was given regarding what was being sought inside.
- He never received a copy of a summons.
- They were served to a third party (Knox).
- He was never informed that his presence was required at the Zondo commission nor that any of his affairs are being investigated.
- He has no idea what the commission suspects he might have done.
- The boxes don’t conform to attachable objects under a summons.
Moodley’s claims are supported by former Transnet chief executive Siyabonga Gama, who wrote a letter to the commission, demanding that Pedlar retracts his statements filed in court.
“Pedlar submitted defamatory statements about me in his court papers where he claimed that I own a safety deposit box and I have written to the commission asking them to advise Pedlar to withdraw his malicious and misleading statement.
“I have never had any safety deposit box with anybody, not with Knox or anyone. The commission has referred my letter to their legal department,” Gama said on Saturday.
In his affidavit, Knox chief executive Wayne Becker admitted there was no urgency for the commission to raid Moodley’s safe deposit boxes.
However, he argued that Moodley might have been economical with the truth by not disclosing certain aspects, including his source of income.
He said the businessman should disclose such information since he is not under any criminal investigation.
A legal expert agreed with Judge Modiba’s ruling that the commission acted beyond its scope.
Attorney Koena Mpshe, of KM Attorneys, said Moodley had a right to seek a court order barring the commission from using any material seized as evidence against him.
“These documents may not be used as evidence as a means of obtaining them was illegal. Whatever was found in those boxes before the warrant was sought, cannot be used in court.
“He must make an application for the illegally acquired information to be discarded by the commission and ultimately by the court,” said Mpshe.
The Zondo commission failed to respond to questions sent to it on Friday relating to the conduct of its investigators. The questions included why the investigators initially searched Moodley’s boxes without a court order.