Judgment reserved in the Investigating Directorate’s preservation order application on Optimum Coal Mine

11 March 2022

The High Court of South Africa, Gauteng Division, Pretoria reserved judgment indefinitely in two applications brought by the Investigating Directorate (ID).

The first pertains to how Tegeta Resources, a company owned and controlled by members of the Gupta family, acquired Optimum Coal Holdings from Glencore for

R2.1 billion.

The ID seeks to preserve all of Tegeta’s shares in Optimum Coal Mine (OCM) , all of Tegeta’s shares in Optimum Coal Terminal and the business of OCM. It is the ID’s case that all of these assets were acquired with the proceeds of crimes perpetrated against South African state-owned entities, including Transnet and Eskom.

The ID in its papers told the court that a month prior to Tegeta furnishing the purchase price, the company did not have the R2.1 billion to purchase the mine. However, shortly thereafter funds from Gupta controlled entities Oakbay Investments, Albatime and Centaur mining, amongst others, were transferred into Tegeta’s account as loans.

The second application is brought against a Bermuda company called Templar Ltd, an international investment firm and the largest independent creditor in Optimum Coal Mine. The Templar claim is valued at approximately R1.3 billion. It is the ID’s case that the funds underlying the Templar claims were advanced by the Gupta family's company in Dubai, Griffin Line Trading LLC, a company nominally controlled by Ajay Gupta’s son, Kamal Singhala. Daniel McGowan, the owner of Templar, has himself stated under oath that the funds advanced by Griffin Line were derived from “money stolen from the South African government and laundered via Mr Singhala on behalf of his father and wider family members.”

With the two applications, the ID seeks to have forfeited to the State, the proceeds of one of the primary criminal schemes linked to state capture.

Further, the court heard that the preservation application is necessary to prevent the business rescue process from being abused to legitimise the proceeds of crime. The goal is to ensure a fair, open and competitive sale of the mine, in the interest of the mine workers, creditors and the broader public.

Former Group Chief Executive of Eskom, Matshela Koko brought an application for his affidavit to be adduced as evidence refuting the allegations made by the ID in its court applications on his alleged involvement in the prepayments by Eskom. The court dismissed his intervening application.

Issued by Sindisiwe Seboka, Investigating Directorate Spokesperson, 11 March 2022