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Atul Gupta. Picture: SUNDAY TIMES
Atul Gupta. Picture: SUNDAY TIMES

The National Prosecuting Authority (NPA) has set its sights on the Gupta-owned Optimum Coal Mine, which is in business rescue, in an ambitious plan to have it forfeited to the state as proceeds of crime. 

The plans are outlined in an application filed on Wednesday by national director of public prosecutions Shamila Batohi in the Johannesburg high court.

The NPA is seeking a preservation order for more than R2.038bn. This includes the mine itself, shares in the mine held by Gupta company Tegeta and more than R1.3bn in debt intended to be converted into a majority stake in the mine.

The NPA in June brought a successful application to restrain the assets of business-person Iqbal Sharma, his company Nulane Investments 204 and Islandsite, which belongs to Atul and Rajesh Gupta and their wives, Chetali and Arti Gupta. 

Former president Jacob Zuma’s son, Duduzane, bought a sizeable stake in Tegeta just weeks before the company bought Optimum. 

If the preservation order is granted, it will be the most valuable Gupta asset in the hands of the state since the state capture scandal broke. Other Gupta assets frozen by the state include a private jet, a house in Saxonwold, Johannesburg, and another house in Constantia, Cape Town. 

If the NPA is successful, the preservation of the mine will be a boost for the organisation that has been under fire for not producing speedy results in cases involving grand corruption and state capture. 

In an affidavit filed by Hermione Cronje, outgoing head of the NPA’s Investigative Directorate as part of the application, the NPA stakes its claim to R1.3bn in debt, arising from coal prepayments and loans, belonging to UK-based Templar Capital. These were ceded to it by Bermuda-based Centaur Venture (CVL) in June 2020. 

CVL is part-owned by Gupta son-in-law Akash Garg, known to South Africans as the groom at the family’s infamous Sun City wedding.

The R1.3bn makes Templar Optimum’s largest creditor, and the company is in the process, together with Optimum’s business rescue practitioners, of converting debt to equity in a plan that will see a new Optimum begin operating.

“The purpose of the preservation order sought is to ensure the property is preserved pending the outcome of an application for a forfeiture order in terms of section 48 of the POCA [Prevention of Organised Crime Act]. In terms of section 40 of the POCA, such an application must be brought within 90 days of the publication of the preservation order in the government gazette,” Cronje said in the court papers.

Optimum was purchased by Gupta-owned Tegeta Resources in 2016 for R2.1bn, and subsequent investigations revealed the money came from CVL, which was owned by Garg and Templar Capital owner Daniel McGowan. 

Cronje said the NPA’s chief financial investigator, Sibusiso Tshikovhi, uncovered that CVL’s activities were funded by a Gupta family company, Griffin Line3 Trading, based in Dubai, including coal prepayments made to Optimum by CVL. 

Tshikovhi also showed the payments were not legitimate but rather “money- laundering transactions by which the Gupta family laundered proceeds of crimes committed against SA organs of state and used these proceeds to prop up the finances of Gupta family entities within SA”, said Cronje. 

She said in relation to the cession of the CVL claims to Templar, this was a “contravention of the money-laundering offence created by section 6 of POCA because McGowan, who represented both parties to the cession, was aware that the Griffin Line funding underlying the CVL claims was the proceeds of crime”.

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