Kapia V The State (cc 09-2008) [2015] nahcmd 195

Count 1 (Accused no’s 1 – 7)



Accused no’s 1, 2 and 4
[54] It is common ground that accused no 1 at the relevant time was a Director of Avid and that he contacted Mr Hiveluah with the view of listing Avid with the SSC as a prospective investment company. This, in turn, led to an invitation sent to Avid to make a presentation to that effect to Mr Mulder, being the contact person. It is common cause that this set in motion several meetings between Mr Mulder and persons claiming to represent Avid. Accused no 2 in her plea explanation made mention of a meeting she and accused no 1 had with Messrs Mulder and Green and stated the main points of discussion were with regard to the modalities of the transfer of the funds and the shareholding of SPYL in Avid. The evidence further shows that accused no 1 presented the financial managers of the SSC, under cover of the Community Care Trust letter head, with SPYL’s Code of Conduct and Constitution. The purpose for this could only have been to show or confirm its interests in Avid as shareholder.
[55] As already mentioned, after the SSC informed Avid on the 21^st of January 2005 that their bid was successful, but prior to the transfer of funds, it had come to the knowledge of the SSC’s financial managers that the late Lazarus Kandara in some way was connected to Avid which, for purposes of dealing or investing with Avid, was unacceptable. This led to the suspension of the transfer of funds on the same day (21^st) where after a meeting was set up with accused no 1 for the 24^th of January, during which the involvement of Kandara in Avid’s affairs and other disquieting issues related thereto, were to be addressed. Though it is not entirely clear from the evidence who amongst the financial managers was the spokesperson during this meeting, it is not disputed that several issues were raised. The SSC managers corroborate one another as far as they were given the assurance by accused no 1 that Kandara was not involved; this laid to rest that particular concern and it was no longer a prerequisite for making the investment with Avid. Other issues of concern have already been referred to earlier herein
[56] Subsequent thereto the letter dated 25 January 2005 was sent by Avid to the SSC listing the shareholders and board of trustees and, annexed thereto, a Resolution of the Board of Directors dated 24 January 2005 stating that it was resolved that accused no’s 1 and 2 would be the contact persons while accused no 2, Justin Rentzke and Gottlieb Hinda (both Asset Managers) would be dealing with investments. This resolution was signed by accused no’s 1, 2 and 4. This satisfied the concerns raised by the SSC managers as mentioned above. As regards the safety of the investment, accused no 1 arranged that Mr Mulder meet with the Asset Manager who would be dealing with the investment in Johannesburg, South Africa and made the necessary arrangements for his flight and the meeting with the contact person. Accused no 2 also attended the said meeting. Once satisfied that a financial guarantee bond would be issued by either the World Bank or by the IMF for confirmation of the investment having been placed in the Standard Charter Bank, and the certificate to be handed to the SSC, the transfer of funds to Avid was approved on the 27^th of January 2005.
[57] Accused no 1 contends that after the transfer of funds, he was no longer involved with the investment until his resignation from the board on 20 March 2005. In para 28 of his s 115 plea explanation he states that he was unaware that the late Kandara was authorised to transfer Avid funds and only came to learn about it on the 10^th of July 2005. According to his knowledge the late Kandara, as an investment consultant, only advised Avid on investments and he (accused no 1) was never part of a decision to authorise Kandara to transfer funds, or to be a signatory to Avid’s bank account; neither was he aware of Kandara’s appointment as Chief Executive Officer of Avid. He admits having informed the financial managers of the SSC during their meeting on the 24^th, when asked about Kandara’s appointment as CEO or as signatory to Avid’s bank accounts, that he was unaware of such appointment. It should be noted that the exculpatory explanation given by the accused in his defence does not constitute evidence.
[58] The alleged ignorance of accused no 1 as regards the involvement of the late Kandara and his actual running of Avid on a daily basis, stands in sharp contrast to the plea explanation of accused no 2 (Exh ‘B’) in which she states in par 3.6 that already in November 2004 the directors of Avid passed a resolution authorising Kandara to be a cosignatory with accused no 2. In par 3.14 of her statement accused no 2 states that, after the funds had been transferred from the SSC account to Avid’s account, ‘the board members unanimously entrusted the late Kandara to do the investment’. (My emphasis) Contrary to accused no 1’s belief as to the involvement of Kandara in Avid, the next paragraph of the statement reads that Avid was a young company and did not have a staff compliment of its own and as such made use of Kandara’s services; and that the daily affairs of the company were being run by him as he had acted as the CEO of the company. I pause here to observe that it should be borne in mind that the late Kandara established Avid and was engaged in its business affairs from the onset.
[59] If the assertions made in the plea explanation of accused no 2 about the involvement of Kandara with Avid are to be repeated on oath and found to be credible, it could reasonably be inferred that accused no 1’s specific denial of Kandara’s involvement was an intentional misrepresentation to the SSC financial managers when they particularly enquired into his involvement with Avid during their meeting of the 24^th and accused no 1 having given them the assurance that he was not involved. If it were found to have been the case and considered together with the evidence of the financial managers that, had they known about Kandara’s involvement, they would never have made the investment, the misrepresentation so made could be viewed as material. This is evident from Mr Green’s reaction by tearing up the letter of transfer of funds on the afternoon of the 21^st of January after being informed by Mr Mulder about the possible involvement of Kandara. The fact that Avid by then had already been notified that their bid was successful, in my view, makes no difference as the misrepresentation made would indeed have involved some prejudice as the funds by then had not yet been transferred and was still under SSC control.
[60] What is further clear from the evidence of the SSC financial managers is that it was important to them to know who would be handling their investment – a consequence to Kandara’s suspected involvement – and when served with a board resolution that accused no’s 1 and 2 would ‘act on behalf of Avid Investment Corporation in all matters regarding to the Social Security Commission Investment’ this satisfied the SSC officials and effectively refuted allegations about Kandara’s involvement. This resolution was signed by accused no’s 1, 2 and 4. Contrary to what had been conveyed to the SSC about the persons at Avid who would be dealing with the investment, accused no 1 in his plea explanation states that he personally had done very little in that regard as he immediately left the country, only to return on the 5^th of February 2005 where after he was preoccupied with preparation for taking up his seat as member of the National Assembly (par 21). This notwithstanding, he, in compliance with their earlier undertaking, on the 7^th of March 2005 sent a letter (Exh ‘X’) to the SSC in which it is confirmed that a Guarantee Bond was obtained by Avid on behalf of the SSC issued in their name, and that it had been shown to them (SSC) as confirmation of the investment made. The tenor of the letter is that the SSC investment was safe as confirmed by the Financial Guarantee Bond obtained and held by Avid. As it turned out, this ‘bond’ (Exh ‘W’) referred to in the letter was bogus, yet it was held out to the SSC as proof of the financial guarantee bond. The circumstances surrounding the manner in which the said document ended up with Avid and relied upon, are vague.
[61] Viewed against the backdrop where accused no’s 1 and 2, as per the resolution dated 08 February 2005 were authorised to act on behalf of Avid in all matters regarding the SSC investment, there is no explanation from their side as to why they did not fulfil their duty in that respect. In the absence of any evidence to the contrary, it seems to me by way of inferential reasoning not farfetched to come to the conclusion that they, from the onset, never intended to manage the investment and made misrepresentations in that regard. In the absence of evidence showing otherwise and regard being had to the statement of accused no 2 about the board unanimously having entrusted Kandara to do the investment once the money was transferred, and them relinquishing their duty of responsibility towards the SSC investment, this could easily be interpreted to have been a façade merely to obtain the investment. In my view, such conduct could prima facie be construed as a misrepresentation made by accused no’s 1 and 2 individually. In the circumstances, their omission to give effect to what has been held out to the financial managers as security for the SSC investment, calls for an explanation.
[62] Turning to accused no 2, as the Chairperson of the Board of Directors of Avid she communicated with the financial managers of the SSC in writing and also attended meetings with accused no’s 1 and 7 for purposes of procuring the investment. In one letter dated 20 January 2005 (Exh ‘M’) mention is made about a financial guarantee bond that will be furnished to the SSC; monthly reports that would be submitted; and that funds would be placed in a scroll account with Standard Chartered Bank and not to be moved. A list of the Avid shareholders was appended to this letter. In subsequent correspondence dated 25 January (Exh ‘R-1’ and ‘R-2’) accused no 2, at the request of the SSC financial managers, submitted a list of Avid’s shareholders which inter alia included trusts and the names of accused no’s 4 and 6 in person. Appended thereto was a resolution taken by the board the previous day stating that she and two other asset managers would be dealing with investments. As already mentioned, this was information the SSC financial managers considered essential prior to the transferring of funds into Avid’s account. I pause here to observe that on both the Avid letter head and the Board Resolution dated 24 January 2005, the name of accused no 3 is reflected as a director of the company, this despite him already having resigned as such during November 2004. There can be no doubt that the other directors must have been aware of this.
[63] In a follow-up ‘Letter of Confirmation’ (Exh ‘V-1’) dated 08 February 2005, accused no 2 confirmed that the SSC funds were invested in the four months fixed interest bearing account as per the agreement and that Avid obtained a Financial Guarantee Bond for N$30 million, tradable one week before the maturity date. On 05 April 2005 accused no 2 again confirmed that the SSC funds (N$30 million) were invested on 28 January 2005 for a period of four months and what the accrued interest at the end of February 2005 amounted to. It is clear from the evidence that the funds entrusted to Avid had not been invested as stated in the correspondence and Namangol had recalled the investment before the end of February 2005, yet it accrued interest. There is no indication how this information came to the knowledge of accused no 2 before passing it on to the SSC.
[64] In view of the above, it seems surprising to note that accused no 2 in her plea explanation (par 3.18) stated that the board ‘initially had little information on how the funds were placed’. This certainly begs the question as to where the information so conveyed to the SSC concerning the investment and accrual of interest then came from. Could this be seen as a further misrepresentation made in order to sooth the minds of the SSC financial managers who had become increasingly uneasy about their investment with Avid? In the absence of evidence to the contrary, it would appear to me that such inference could reasonably be drawn from the present facts and accused no 2 needs to explain herself in this regard.
[65] The position of accused no 4 who had also been a director of Avid at the relevant time is substantially different from that of her co-directors in that she had not been personally engaged in any of the deliberations between Avid and the SSC regarding the investment made with the company. This much is evident from the evidence given by the SSC financial managers. She therefore could not (directly) have made any misrepresentation pertaining to the investment under consideration. Although proclaiming in her plea explanation (par 17.1) that she had never attended any board meeting of Avid, there is evidence to the contrary as the resolution of the 08^th of February 2005 clearly reflects that she was a signatory to the resolution taken by the board on that day. Similar assertions were made by her in a statement made to the police during the investigation (Exh ‘QQQ’ par 17) but in the latter instance it is stated that, although she was unable to attend formal board meetings, she was informed of major developments (of which the SSC investment was one) within the company. From the statement it is evident that accused no 4 had stayed abreast with the SSC investment and when she received a letter in April 2005 from the SSC demanding the return of their moneys, she made enquiries and was informed that the matter was under control. The statement is silent as to who had given her the assurance that everything was under control and whether she had verified that information and with whom. It would also appear from the statement that the accused herself did very little, if anything, about the investment thereafter.
[66] It was submitted on behalf of accused no 4 that because there were no direct dealings between her and the financial managers of SSC, therefore, she had made no fraudulent representation. It must however be borne in mind that a misrepresentation could be made either by a positive act (commission) or an omission. The learned author Snyman (supra at 525) says the following in this regard: ‘A mere omission by X to disclose a fact may, in the eyes of the law, amount to the making of a misrepresentation if there is a legal duty on X to disclose the fact’. See S v Mbokazi¹⁹ at 445f-i where it is stated:
‘It would seem to me that the remarks of Lord Halsbury in Aaron's Reefs Ltd v Twiss 1896 AC 273 (HL) which are quoted with approval in S v Ressel 1968 (4) SA 224 (A) are also apposite in the present case:
“It is said there is no specific allegation of fact which is proved to be false. Again I protest, as I have said, against that being the true test. I should say, taking the whole thing together, was there a false representation? I do not care by what means it is conveyed - by what trick or device or ambiguous language; all those are expedients by which fraudulent people seem to think they can escape from the real substance of the transaction. If by a number of statements you intentionally give a false impression and induce a person to act upon it, it is not the less false, although if one takes each statement by itself there may be a difficulty in showing that any specific statement is untrue.” ’
[67] In the present instance accused no 4, on her own admission, appeared to have been adequately informed about the SSC investment and well to the extent that she and her co-directors were able to resolve during a board meeting that accused no’s 1 and 2 would be responsible for the investment made with the SSC. Add thereto that she was also aware that the investment would be placed with a trader. Although the accused, as a director of the company, together with fellow board-members, had taken certain resolutions affecting the SSC investment, this could only have happened once certain facts or information related thereto had been shared with her; something likely to have happened during the board meeting in view of her aloofness with the business of the company. This information was likely to have come from accused no’s 1 and 2, the only other directors present at the meeting. Whatever that information was, it could only have related to the SSC investment and the further requirements posted by its financial managers. Had any misrepresentation been made to the SSC by her co-accused as regards the manner in which the investment would be dealt with and accused no 4 having had prior knowledge thereof, or acted carelessly as to whether it was true or false, or was suspicious of the correctness but failed to check on the source of the information presented to her in order to erase any doubt, then such conduct would constitute a misrepresentation on her part, either as a director of the company or in her personal capacity.
[68] Whereas the accused persons are jointly charged and allegedly have acted with common purpose, the court in its assessment of the evidence to establish whether or not any of the accused persons (individually or jointly) had made any misrepresentation, should not approach the evidence on piecemeal basis but should rather view it holistically and, more so, where they had been working in unison to achieve the same goal ie to secure the SSC investment.
[69] In S v Nakale and Others (supra) at 464I – 465D this court stated the following:
‘[24] There is a vast difference between offences like murder and theft, on the one hand, and offences like corruption and fraud, on the other hand, in particular as far as the evidence is concerned. In many cases of corruption or fraud the conduct of one accused may be dependent on the conduct of another and although the State's evidence may strongly implicate one accused and to a lesser extent the other, discharge of the one may be fatal to the State case. However, it must be emphasised that caution should be exercised whether the type of the offence is applicable in a particular case as a factor to be considered at this stage. Furthermore, if more than one accused is charged for committing the same offence and the State alleges common purpose, evidence which strongly implicates one accused, but to a lesser extent another accused, may be evidence on which a reasonable court may convict, if the basis of common purpose is laid by the State in its evidence. If prima facie a scheme or a scam can reasonably be inferred from the State's evidence, in which all, or more than one, of the accused may have played a part, however small, to achieve the result of committing the alleged offence(s) an accused that may appear less guilty at the close of the State case, may at the end of the trial also be convicted. The Supreme Court of Appeal (South Africa) also recognised the fact that a co-accused may testify and incriminate another accused as referred to in S v Lubaxa (supra) at 1257F - H.’
[70] In view of the afore-going, it is my considered opinion that, although the evidence at the close of the State case does not prove any misrepresentation directly made by accused no 4 to any of the financial managers of the SSC, there is, in the light of the totality of the evidence presented, prima facie evidence before the court to also put the accused on her defence.
Accused no 3
[71] This accused was a director of Avid until his resignation on 17 November 2004 where after he could not legally have represented Avid in any official capacity. In his plea explanation (Exh ‘C’) he denied his involvement in any dealings with the SSC or that he had made presentations or misrepresentations to the SSC in respect of those charges preferred against him.
[72] Despite the accused already having resigned as director from the company in November 2004, his particulars as a director of Avid remained part of the company profile (Exh ‘L’) that was presented to the financial managers as precursor of the SSC investment. This document formed part of the presentation made to the financial managers when introducing Avid as an investment company and the persons running its affairs. To have the name and photograph of accused no 3 reflected in the company profile as a director whilst knowing it was no longer the case, clearly constitutes a misrepresentation in itself. It then begs the question why those presenting the document did not update the company profile to its existing status at the relevant time, while the same would apply to the company’s letter head which, until 20 January 2005, reflected the name of accused no 3 as a director. Though this might call for some explanation on the part of the then serving directors, there is no evidence showing that accused no 3 had any knowledge of the company profile or letter head still reflecting his name as such. That, however, is not where it stops.
[73] Mr Mulder testified that information about accused no 3 being a director of Avid, as reflected in their documentation, made him feel more comfortable when he looked at the company profile and, more so, when the accused during the ongoing negotiations paid him a visit and they, according to Mulder, talked about Avid. From this Mulder inferred that accused no 3 came in his capacity as a director. Mulder did however testify that he (accused no 3) did not introduce himself as a director, acting on behalf of Avid. Under cross-examination he further said that those persons who had come to speak to him about Avid were presented to him as members of the company. It is in view thereof that the prosecution argues that accused no 3 had associated himself with Avid during the negotiations.
[74] Mr Kasper, counsel for accused no 3, submitted from Mulder’s evidence about accused no 3 coming to talk to him ‘on an issue or two concerning Avid’, that it could have been about anything and that no presentation or misrepresentation of any sorts regarding the investment was made by the accused. It seems to me that there is merit in counsel’s submission if it were to be considered in isolation, however, that is not how evidence is evaluated, particularly where it is alleged that the accused, being jointly charged, have acted with common purpose. The gist of Mulder’s evidence about accused no 3’s visit is that he had come to talk about Avid and, bearing in mind that the only business between Avid and the SSC at the time involved the investment, it would appear, in the absence of evidence to the contrary, not farfetched to infer from such evidence that the purpose of the visit was to promote Avid as an investment company. Whereas he had officially severed ties with Avid two months prior thereto, what other reason did the accused have to involve himself in the company’s business; and if it concerned the investment to be made, how did he come to know about it and what was required of him, if anything, and by whom? In view of his plea explanation amounting to nothing more than a blunt denial, considered together with uncontroverted evidence that he involved himself in some way with Avid at a time when negotiations were underway to secure an investment with the company, he is the only person who could possibly explain his actions and intentions, if any, on this point.
[75] It is therefore my considered opinion that there is indeed prima facie evidence before the court pointing in the direction of an active association by accused no 3 with dealings between the SSC and Avid at the relevant time, justifying the decision to place him on his defence.
Accused no 5
[76] The position of this accused is different to any of that of his co-accused in that he had no official ties with Avid either as a director or shareholder, and was merely the spouse of one of the directors, Mrs Blaauw, accused no 4. In his plea explanation (Exh ‘E’) accused no 5 explained how he became involved in the affairs of Avid, a company he continuously promoted to the point where Avid matters were openly and regularly discussed between him and the other directors who had all been known to him. He headhunted directors for the company and seemed to have taken it upon himself to keep accused no 6 informed about the progress made in the company. In January 2005 (the date in par 20 is incorrect) he became aware of Avid’s intentions to submit a proposal to the SSC for investment. He further explained that it was by mere chance when he went to the SSC offices to meet with Mr Green, that he was given the letter of confirmation by Mulder, requesting him to hand same over to either his wife or accused no 2. Although admitting that he enjoyed sharing information and promoting the business (of Avid), he denies having unduly influenced the financial managers in order to secure placement of the investment with Avid; neither did he make any misrepresentation regarding the involvement of the State President in Avid, or that SPYL held shares in the company. Regarding the latter, he stated in his statement made to the police (Exh ‘RRR’) that he was told about SPYL being a shareholder in Avid. According to him he merely assisted where he could because he had a flexible schedule. However, evidence to the contrary had been adduced by State witnesses.
[77] During his testimony in chief Mr Mulder said that he understood accused no 5 to have been involved in Avid because whenever documents had to be delivered or collected from the offices of the SSC, it would be him doing so. Furthermore, most of the discussions or information conveyed to Mulder came from accused no 5 as he appeared to be speaking on behalf of Avid, accused no 1, the State President and shareholders. From this Mulder gathered that although he might not have been a director of Avid, he had acted like an employee in a marketing capacity as he was the person mostly dealing with Mulder regarding the investment. I assume from Mulder’s testimony when he said that accused no 5 spoke ‘on behalf of others’ that what he meant thereby is that he conveyed information about the involvement of these persons in Avid and nothing more. Under cross-examination Mr Mulder was adamant that, although he had failed to mention this in his witness statement, he was told by accused no 5 that accused no 1 was a Deputy Minister, also about the State President having shares in Avid but that it would not be disclosed anywhere.
[78] Mr Green in turn testified that he was approached by accused no 5 on the 3^rd of January 2005 in order to introduce Avid Investment Company to the SSC. He introduced himself as a Member of Parliament and said he was sent by higher authority without mentioning to whom he was actually referring. He pointed out that SPYL with 80 percent shareholding was the major shareholder of Avid, and that the company would be offering superior returns on the SSC’s investments. Green said he believed the accused though he was not shown (or asked to be shown) any shareholding certificates issued in the names of the said shareholders. Accused no 5 further stated that accused no’s 1 – 4 and 6 were directors of the company and that he himself was merely a representative of the company. The extent to which accused no 5 was involved in the negotiations between the SSC and Avid is evident from Mr Green’s testimony. He said that at some later stage after the investment of N$30 million was awarded to Avid, but prior to the transfer of funds, he informed accused no 5 that the transaction was cancelled and unless he (Green) received documentation from Avid to the effect that accused is the official representative of Avid, he would no longer deal with him. This seemed to have brought an end to accused no 5’s direct involvement in the negotiations between the SSC and Avid.
[79] Under cross-examination Mr Green was asked whether he believed that the SPYL and the State President had shares in Avid whereupon he replied that he does not (now) know what he believed back then. When asked whether he was misled by accused no 5 in any way, he said that he did not think so. However, it matters not what Mr Green believed at the time a misrepresentation was made to him and whether or not he was misled, but rather whether the misrepresentation had the potential of leading to some prejudice. In this regard the court in S v Campbell²⁰ at 507 stated the following:
‘Whether the person to whom the representation is made is aware of the fact that it is false is irrelevant. The law looks at the matter from the deceiver's point of view. If he had the intention to deceive, it is immaterial whether there is actual or merely potential prejudice. See R v Dyonta and Another (supra at 55 and 57); R v Mohale 1950 (1) SA 390 (GW) at 391-2; R v Adam 1955 (2) SA 69 (T) at 74C-75B; S v Swarts en 'n Ander 1961 (4) SA 589 (GW) at 591; R v Kritzinger (supra at 60F); Joubert (ed) op cit para 336 at 293-4. In R v Dyonta and Another (supra) it had been held that even in a situation where a person attempted to sell pieces of glass to a police trap there would be sufficient potential prejudice to constitute fraud.’ (My emphasis)
[80] From the evidence adduced it would thus appear to have been established that accused no 5 associated himself with Avid’s endeavours to secure the SSC investment and in the process played an active role in furnishing information to the financial managers in order to promote the company’s chances of getting the bid. That much he admitted. In the process he, according to the evidence, has made several misrepresentations to those persons with the SSC who were directly involved with decision making and, as such, in the position to award the investment to Avid. These misrepresentations revolved around the directors and shareholders of Avid, seemingly aimed at enhancing the image of the company as a prominent investment company as far as it concerns its shareholders and those at the helm of the company. He personally gave out to Messrs Mulder and Green that a set of facts existed pertaining to the composition of the company which in truth and fact was not the case. In the absence of evidence to the contrary, a reasonable court may find the accused’s actions in this regard fraudulent. It is my considered opinion that accused no 5 should therefore be placed on his defence.
Accused no 6
[81] In his plea explanation (Exh ‘F’) accused no 6 gave a comprehensive exposition as to how he became involved in Avid. This had come about as a result of accused no 5 who approached him and later introduced him to the late Kandara with the view of becoming a shareholder in an asset management company. During a subsequent meeting with accused no’s 1, 3 and 5 he learned that a company called Avid Investments Corporation had been registered in which he was offered shares. He has however to date not received any shareholding certificate reflecting him being owner of any shares in the company, this despite accused no 5 having told him that he was an 8 percent shareholder, and promises made by the late Kandara that he would receive his shares certificate in due course. During a second meeting in January 2005 held in accused no 1’s office, he learned that accused no 2 had been elected as chairperson of the Board of Directors and that Avid had been invited to make a presentation to the SSC on the profile of Avid and its investment potential. He was asked to accompany accused no 2 to this meeting so that he could assist with any questions that might arise during the meeting. He claims that in order to lend weight to the business potential of Avid he agreed to accompany accused no 2. He confirmed having been introduced at this meeting as a shareholder which he now concedes to have been factually incorrect.
[82] Mr Green testified that although he had earlier been informed by accused no 5 that accused no 6 was a director of the company, he had not been introduced as such during the meeting with accused no’s 2 and 6. It further appears from the evidence of Messrs Mulder and Green that during this meeting accused no 6 personally did not make any presentation or imparted information to them that was not the truth. It would thus appear that the reason why he was jointly charged with his co-accused is because he associated himself with the actions of the directors of Avid in their endeavours to secure the investment for Avid. To this end there is no evidence showing that there was any prior agreement and consensus between accused no 6 and any of the co-accused to defraud the SSC or its financial managers as regards the investment to be made. Although the evidence shows that he actively associated himself generally with the common pursuit of Avid’s business as an investment company, the evidence falls short from proving that he actively associated himself with the commission of any of the offences charged. There is neither evidence before the court proving that accused no 6 knew, or must have known about misrepresentations made to the SSC by any of the co-accused during the negotiations and that he wittingly associated himself with such misrepresentation through his conduct.
[83] The accused in his plea explanation explained that by the time he was asked by Kandara to accompany accused no 2 to the meeting, he was made to believe that he was a shareholder and it was in this capacity that he obliged. Though mindful that this does not amount to evidence, no evidence to the contrary had been presented during the State case; neither does it appear to me from the plea explanations of any of his co-accused that evidence to the contrary is likely to be forthcoming.
[84] Pertaining to the testimony of Mrs Kandara about money accused no 7 had channelled to accused no 6 in which she was the go-between, there is no evidence on record that these funds could be linked to the Avid transaction; neither could it in my view be inferred from the established evidence.
[85] For the afore-going reasons I have come to the conclusion that there is no evidence on which a reasonable court, acting carefully, may convict accused no 6 on the charge of fraud, alternatively theft, and in respect thereof he need not be placed on his defence.
Accused no 7
[86] With regard to accused no 7 it is common cause that he was not personally engaged in the investment dealings between the SSC and Avid and only came into the fray after N$29,5 million of the SSC investment was transferred into the trust account of Namangol Investments (Pty) Ltd. Accused no 7 at the relevant time was the sole director and shareholder of the company. During the transfer Namangol’s trust account reflected a credit of N$221 945.33. On the same day (28 January 2005) the amount of N$20 million was transferred into a South African account registered in the name of Allan Rosenberg Investments Services (hereinafter Rosenberg). Five days later a further N$6,3 million was transferred into the account of Dean Africa CC, another South African entity where after several transfers from the trust account followed, involving substantial amounts. On 11 February 2005 Namangol however recalled the investment made with Rosenberg and when legal proceedings were subsequently instituted in the High Court of South Africa (Witwatersrand Local Division) (as it then was), judgment was entered by consent between the parties whereby Rosenberg was ordered to pay R30 million to Namangol, exceeding the actual investment made with it by N$10 million. Though of no significance to the present proceedings, the agreement reached between Rosenberg and Namangol which was made an order of court was shady. Be that as it may, Rosenberg paid the sum of R15 million into the account of Greyling Orchard Attorneys’ Trust Account who, in turn, transferred N$14,9 million thereof into the personal bank account of accused no 7 which, by then, only reflected a balance of N$51 013.21. What followed thereafter is a constant dissemination of large sums of money from the personal account in favour of various beneficiaries, family members and other entities. Part thereof was for personal investment or paid into the business account of Namangol; vehicles were bought and paid for from this account; outstanding debt was paid; and a large amount was given to a church. Of note is a cheque drawn in the amount of N$500 000 in favour of Mrs Kandara on 30 March 2005. The above transactions have been admitted by accused no 7 (and co-accused) in a document handed into evidence and marked Exhibit ‘DDD’.
[87] Accused no 7 in his plea explanation denies having committed fraud as alleged in the charge contained in count 1 and the alternatives thereto. It is specifically denied that he had made any misrepresentation to the SSC, or its management, or that he had acted with common purpose with any person or persons in the defrauding of the institution, or its representatives. He disputes that the sum of N$30 million was given to him or that he wrongfully, unlawfully and intentionally appropriated the aforesaid moneys of the SSC. His plea explanation handed in as Exhibit ‘G’ asserts that during January 2005 he was approached by the late Kandara who informed him about a forthcoming investment of N$30 million and that accused no 7 had to introduce him to Namangol’s traders, this he had subsequently arranged. Kandara thereafter borrowed money from either accused no 7 or Namangol on the basis that it could later be recovered from the investment to be made by him; the amounts not mentioned in the statement though. On 28 January 2005 the amount of N$29,5 million was deposited into Namangol’s Trust Account, followed by an oral instruction by Kandara how the money should be placed. Accused no 7 was instructed to invest N$20 million with Rosenberg; to find a suitable trader within his own discretion for an investment in the amount of N$6,3 million which he invested with Deane Africa CC in South Africa; and to retain the balance of N$3,2 million pending further instructions. Accused claims that he did not know that the money deposited into Namangol’s account emanated from the SSC investment.
[88] With regard to the evidence adduced by the State there is nothing showing that accused no 7 was personally engaged at any stage of the negotiations between the SSC and Avid pertaining to the proposed investment; neither that he had acted with common purpose with his co-accused at the relevant time. It thus means that he was not in any position to have made the alleged misrepresentations embodied in the fraud charge. This much the prosecution seems to have conceded. Whereas at the close of the State’s case there is no evidence showing that accused no 7 committed the offence of fraud set out in the main count of count 1, it is my considered opinion that he should not be placed on his defence in respect thereof.
[89] The accused, together with the co-accused, are charged in the alternative to theft (by conversion) and theft, to which they have all pleaded not guilty. It has been argued in support of the s 174 application by Mr Makando, on behalf of accused no 7 that, on the alternative charges, the State, in order to secure a conviction, had the burden to prove that the money deposited into Namangol’s account was stolen from the SSC and after the accused had realised this, he appropriated same. Furthermore, in his plea explanation accused no 7 stated that he did not know that the said moneys were that of the SSC as Kandara never disclosed the source of the money to him. The question was further posed whether the money was entrusted to Namangol or accused no 7 in person? As regards the second alternative charge of theft it was submitted that the evidence did not prove that the moneys deposited in Namangol’s account was indeed stolen money.
[90] The evidence presented undoubtedly shows that the N$29,5 million which was transferred from the Avid account to Namangol was the investment made with Avid by the SSC. The fact that these funds were transferred without any form of accompanying documentation seems inconceivable and, if that were indeed the case (as accused no 7 asserts), then that is testament to the improper manner in which business was conducted at Avid. According to accused no 7 he only received verbal instructions from Kandara how to invest the money, to which he obliged. He admitted having transferred N$20 million to Rosenberg and N$6,3 million to Deane Africa CC as per the instructions, and retained the balance of N$3,2 million pending further instructions. This notwithstanding, about 14 days later he recalled the funds transferred to Rosenberg of which N$14,9 million was paid back and deposited into his personal bank account. He thereafter used the money at will and, in the absence of evidence which might possibly explain on what authority he had usurped the said funds, it could from the evidence adduced reasonably be inferred that he misappropriated it. The accused seems to be the only person who could explain on whose authority he had so acted for there is no evidence showing that he was merely following instructions, either from Kandara or Namangol Investments when dealing with the money in the said manner. I have therefore come to the conclusion that on the alternative charges of theft, there is sufficient evidence on which a reasonable court may convict, and accused no 7 should accordingly be put on his defence.