The Appellants thereafter applied for leave to appeal to the Supreme Court of Appeal and were granted leave by the DCLD against the grant of the confiscation orders against them. Upheld the appeal and set aside the confiscation order in relation to the third benefit (the proceeds of Nkobi Investments’ sale of the shares in Thint Holdings). The Judgment of the DCLD in the criminal proceedings is at pages 2156 to 2255 of Volume 24.
The Judgment of the Constitutional Court in the application for leave to appeal is at pages 2496 to 2541 of Volume 27.
THE BENEFITS TO WHICH THE CONFISCATION ORDERS RELATE
Nkobi Investments holds 25% of the shares in Thint, which in turn holds 80% of the shares in ADS. The agreed value of Nkobi Investments’ 20 % interest in ADS (through its shares in Thint) was R21 018 000 at the time of the restraint order. Nkobi Holdings holds 100% of the shares in Nkobi Investments and Shaik owns an effective interest of 92% in Nkobi Holdings.
In the Further Directions dated 19 November 2007, the Chief Justice directed the parties to address in their Written Argument the issue of whether the heads of argument filed before the lower courts should form part of the record that is to serve before this court for the purposes of this appeal.15.
FACTS RELEVANT TO THE CONFISCATION ORDERS
The letter was copied to the President of the ANC (Mr Thabo Mbeki) and the Deputy President of the ANC (Zuma). Zuma had attended the meeting in his capacity as the Deputy President of the ANC. The meeting took place at the British Department of Defence offices and Zuma had been in the United Kingdom at the time in his official capacity as Deputy President of the ANC.
At the time of the meeting with Zuma on 2 July 1998 therefore, Thomson (Pty) already had a right to acquire a 50% plus one share in ADS. The purpose of the loan was to enable Nkobi to subscribe to the increased share capital of Thomson (Pty).98. The said clause confirms that Nkobi did in fact have a claim arising from the direct acquisition of the ADS shares by Thomson (France) and that it.
JUDGMENTS OF THE LOWER COURTS Judgment of the DCLD
129.1 Section 19(1) of POCA authorised a confiscation order to the value of the gross proceeds of any unlawful activity, and no regard was to be had to the expenses and costs incurred by the Defendant in acquiring such proceeds.106. a) All arose from the same event, namely, the decision of the Thomson parent company to acquire the shares in ADS without the involvement of the Nkobi companies.107. b) There was no evidence of a contractual obligation on the part of Thomson to include Nkobi in its acquisition of the ADS shares (as was contended by the Appellants).108. c) The trial court had held that two of the interventions by Zuma on behalf of the Appellants were not covered by the indictment and could not be taken into account in. convicting the accused for contraventions of the Corruption Act. The trial court held that since the State had not alleged or relied upon interventions by Zuma as Deputy President of the ANC, as distinct from. his positions as Member of the Executive Council in KwaZulu-Natal and Deputy President of the National Government, it could not at the end of the case argue that Zuma’s interventions as Member of the Executive Council in KwaZulu-Natal and Deputy President of the National Government should also include those as Deputy President of the ANC. Furthermore the State had led no evidence in the trial in regard to Zuma’s powers and duties as Deputy President of the ANC.109. d) The First Appellant had patronised Zuma due to the latter’s general political standing as opposed to his. position in the respective offices and, on the probabilities, Zuma’s intervention to persuade the Thomson parent company to include Nkobi in the ADS shareholding was the effective cause of the Third Appellant’s acquisition of the shareholding in ADS, the dividends that had been paid in respect of those shares, and the benefit received in respect of the sale of the shareholding in Thint. e) Zuma’s interventions on two occasions were related criminal activity and could be taken into account in making a confiscation order in terms of section 18 (1) of POCA.111. 129.3 In regard to the relief claimed by the NDPP (a confiscation order), the court held that:. a) It was proper for the Defendants to be directed to pay the value of the benefits jointly and severally, and not each independently, as the object of POCA was not to enrich the State.112. b) Even though the Third Appellant had loaned the monies to acquire the Thint shares (from Thomson’s Mauritius division) and the dividends received by it were used to repay this loan, the confiscation order to the value of the shares (the first benefit) was not. As explained, the SCA confirmed the judgment of Justice Squires relating to the first and second benefits, and set aside the confiscation order relating to the third benefit.
131.1 Pursuant to Zuma’s intervention, Thomson agreed to relocate its shares in ADS, resulting in Nkobi acquiring an interest in ADS. Zuma’s conduct fell within the scope of Shaik’s corrupt intention, which fell within the direct scope of the corruption charge under count 1. Sections 1(1) and 19(1) of POCA do not require the connection between the proceeds of the crime, and the crime itself, to be direct.115.
131.3 The provisions of POCA authorise multiple confiscation orders to be made in circumstances where the proceeds of unlawful activity has passed through different hands.116. 131.4 Since the SCA had found, in the criminal appeal, that Zuma’s interventions fell within the ambit of count 1, such conduct was therefore directly related to the offence for which the Appellants had been convicted for the purposes of Section 18 (1) (a) of POCA.117. 131.6 The words “proceeds of unlawful activities,” in Sections 1(1) and 19 (1) of POCA refer to the value of everything received by a defendant in connection with the crime, without taking into account any expense to which the defendant is put to bring about any particular result.
131.7 There was nothing disproportionate in the Appellants being ordered to pay to the State both the value of the shares (the first benefit) and the value of the dividends used to pay for the same shares (the second benefit). Both constitute direct benefits of the corruption under count 1, and there was no reason for interfering with Justice Squires’ order in this regard.120.
APPLICABLE LEGAL PRINCIPLES: GENERAL OVERVIEW Chapter 5
The fact that Section 18 requires the defendant to have benefited, and that a benefit necessarily connotes an economic gain, must necessarily mean that the benefit is a reference to the nett gain derived as a consequence of the offence or related criminal activity. The purpose of POCA is to deprive the defendant of the proceeds of crime and that must mean the benefit that the defendant actually derived from the offence or related criminal activity. The market value could obviously exceed or be lower than the gross value of the property to the defendant, which.
Quite evidently, a payment or reward can only constitute a “benefit” to the extent that it is nett of all of the costs attendant upon acquiring it. As with all legislation, POCA is required to be interpreted through the prism of the Constitution.129. 169.5 The purpose of POCA is predominantly deterrent and the closer one gets to the prevention of organised crime, which is the primary rationale underlying POCA, the greater the importance of the purpose becomes.135.
It is for this reason that the deterrence purpose of the legislation must be weighed against the effect on the individual owner, in the light of the relevant offence.140. The nature of the crime must be probed keeping in mind the predominant purpose of POCA. 7] I have already observed that organised crime is but one of the targets of the Act (that is exemplified by the present case).
This principle finds expression, in regard to accused persons, in Section 35 (3) (m) of the Constitution and also Section 11 (h) of the. Suppose that the Defendants were first tried and found guilty of the income tax offences.
APPELLANTS’ SUBMISSIONS
We respectfully submit that the reasoning of the SCA is flawed both as matters of law and fact. 197.7 The companies Thomson (Holding) and Thomson (Pty) were formed as a direct consequence of the agreement. This is dealt with more fully later herein when dealing with the determination of the value of the benefit.
The NDPP sought to rely on the value of the shares in 2005 when it obtained the restraint order. If the benefit was not retained, as in Kyriacou, it would not be a proper exercise of the Court’s discretion to make a confiscation order. The influence of the Constitution on the interpretation of POCA also accounts for the difference.
The amount would be a fiction, and further it would not bear any rational relationship to the object of the Act. The dividends on any analysis cannot be included as a separate benefit in the calculation of the confiscation orders. Appellant held in Thint (Pty) (Ltd) under restraint, the shares have been sold with the approval of the NDPP, and the sum.
The Cellsaf shares are owned by Kobitel (Pty) Ltd a wholly subsidiary of the Third Appellant. These subsequent events however have not altered the position of the Appellants and the validity of the. 301.1 The effect of the confiscation order on the owner has to be weighed against the purpose the confiscation order would serve.
301.2 The severity of the interference with the individual’s right to property has to be weighed against the extent to which the property was derived from the offence i.e.
