SCA dismissal of appeal in Optimum Mine case bolsters NPA asset forfeiture efforts

3 November 2023

The NPA welcomes the unanimous judgment delivered by the Supreme Court of Appeal (SCA) in the Optimum Coal Mine case on 1 November 2023.

This case involved an appeal against the granting of a preservation of property order by the Gauteng Division of the High Court on 23 March 2022 under section 38 of the Prevention of Organised Crime Act 121 of 1998 (POCA), on application by the National Director of Public Prosecutions (NDPP). The preservation order appointed a curator bonis with designated powers in respect of the affected property. This was after the adoption of a business rescue plan under Chapter 6 of the Companies Act.

The SCA ruled that preservation order was not appealable as it was not a final order and that the respondent still has an opportunity to be heard or challenge the final forfeiture order.

This order now enables the Asset Forfeiture Unit in the NPA to explore non-conviction based Chapter 6 of POCA preservation orders that are part of the NPA’s innovative approach to ensuring that the proceeds of crime are not dissipated.

The property identified in the preservation order includes: (a) all shares held in Optimum Coal Mine (Pty) Ltd (OCM); (b) the business of OCM as defined in the business rescue plan adopted by the creditors of OCM in September 2020 including, but not limited to, the assets listed in the business rescue plan; and (c) all shares held in Optimum Coal Terminal (OCT). The shares in question are held by Tegeta Exploration and Resources (Pty) Ltd (Tegeta). OCT has a shareholding in the Richards Bay Coal Terminal that entitles OCM to export coal.

In the SCA appeal, the NPA contended that an alternative business rescue plan, excluding Templar and Liberty, can and should be pursued, with the curator and the business rescue practitioners working together as provided for under the preservation order. This is to ensure that the proceeds from any new sale of OCM’s business will, after the satisfaction of lawful creditors’ claims, be forfeited to the state, if the pending forfeiture application is resolved in favour of the NPA. The purpose of the preservation order is thus to preserve all the assets of OCM and OCT in the interim.

The NPA is exploring all avenues with a view to finding a speedy solution to the case as that will be of benefit to all parties involved.

The SCA decision supports attempts by the NPA to explore expeditious asset recovery approaches as a prosecutorial strategy in all cases.

A critical part of the NPA strategy to address state capture and other complex corruption cases is asset recovery. The AFU will continue to monitor all these cases to assess any asset recovery potential. Success in this regard will require ongoing and enhanced cooperation with relevant law enforcement stakeholders and partners.

Issued by Mthunzi Mhaga, NPA Spokesperson, 3 November 2023