By Sinenhlanhla Masilela.
Two company directors and three mining companies linked to the Gupta family have been convicted of fraud and money laundering involving R107.5 million meant to rehabilitate two coal mines in Mpumalanga.
The South Gauteng High Court in Johannesburg convicted Ronica Ragavan, Pushpaveni Ugeshni Govender, Optimum Coal Mine (Pty) Ltd, Koornfontein Mines (Pty) Ltd and Tegeta Exploration and Resources (Pty) Ltd on four counts relating to the unlawful use of funds held in two mine rehabilitation trusts.
Judge Mudunwazi Makamu convicted the accused on two counts of fraud and two counts of money laundering involving R7.5 million from the Optimum Mine Rehabilitation Trust and R100 million from the Koornfontein Rehabilitation Trust.
The convictions were welcomed by National Director of Public Prosecutions (NDPP) Advocate Andy Mothibi and the Investigating Directorate Against Corruption’s (IDAC) acting investigating director, Advocate Ntuthuzelo Vanara.
IDAC spokesperson Henry Mamothame said the State argued that funds legally set aside to repair environmental damage caused by mining activities at the Optimum and Koornfontein coal mines were unlawfully diverted to pay mining contractors and other third parties.
Judge Mudunwazi Makamu convicted the accused on two counts of fraud and two counts of money laundering involving R7.5 million from the Optimum Mine Rehabilitation Trust and R100 million from the Koornfontein Rehabilitation Trust.
R7.5m diverted from Optimum rehabilitation trust
Mamothame said during the trial, the State presented evidence that on May 23, 2016, R7.5 million was transferred from the trust’s Standard Bank account into an Optimum Coal Mine account.
He said Ragavan and Govender had signed a letter requesting the transfer. The State argued that the bank was falsely informed that the transaction had been authorised and that the money would be used for rehabilitation work.
However, the funds were subsequently used for other purposes.
On the same day, the R7.5 million was combined with R9.5 million from Tegeta and ultimately formed part of a R26.4 million payment to mining contractor Klipbank Mining for underground mining work carried out in April 2016.
Although rehabilitation work was subsequently undertaken using the funds, the money was never repaid to the trust.
R100m loan linked to Koornfontein trust
Mamothame said the second set of convictions relates to R100 million obtained through a loan facility secured against funds held in the Koornfontein Rehabilitation Trust.
Ragavan, Govender, Koornfontein Mines and Tegeta were convicted of fraud and money laundering in connection with the transaction.
The court heard that in May 2016, approximately R280 million held by the trust was transferred from First National Bank to the Bank of Baroda.
On May 5, 2016, the then Department of Mineral Resources granted Tegeta approval in principle to use the trust funds for concurrent rehabilitation, subject to three conditions.
However, the version of the approval letter provided to the Bank of Baroda did not contain those conditions.
On June 6, 2016, R170 million belonging to the trust was placed in a fixed deposit and pledged as security for a R150 million loan facility granted to Koornfontein Mines.
The bank received written undertakings that the loan would be used exclusively for mine rehabilitation.
The bank subsequently paid out R100 million on June 13, 2016.
Within two days, the money had moved through the accounts of Koornfontein Mines and Tegeta before reaching a Tegeta account at the State Bank of India.
Of the R100 million, R67.8 million was subsequently paid to mining contractors Klipbank Mining and Coalcor Mining.
A further R30 million was transferred back to the Bank of Baroda and paid to other companies, including Koornfontein Mines and Optimum Coal Mine.
The State established that none of the R100 million was used for rehabilitation and that no rehabilitation work was carried out at Koornfontein.
Meanwhile, the R170 million belonging to the trust remained pledged to the bank as security for a year, leaving the funds at risk.
Gupta-linked companies acquired mines from Glencore
The court heard that Tegeta acquired Optimum Coal Mine and Koornfontein Mines from Glencore, with the sale implemented on April 8, 2016.
The acquisition also gave the companies control over the two rehabilitation trusts.
As of February 1, 2016, the Optimum Mine Rehabilitation Trust held approximately R1.44 billion, while the Koornfontein Rehabilitation Trust held about R278.5 million.
The State argued that the accused had acted contrary to regulations requiring mining rights holders to set aside sufficient funds to rehabilitate land affected by mining activities.
The National Environmental Management Act 107 of 1998 and its financial provision regulations require that such funds remain available for their designated rehabilitation purposes.
Ragavan was a director of Koornfontein Mines and Tegeta at the time of the offences. Govender was a director of Optimum Coal Mine and became a trustee of both rehabilitation trusts on April 26, 2016.
All the accused had pleaded not guilty.
Meanwhile, Maleatlana Joel Raphela, the former deputy director-general of the then Department of Mineral Resources, was acquitted of all charges against him.
Sentencing set for December
The matter was postponed to December 1, 2026, for sentencing proceedings.
The court extended the bail of Ragavan and Govender until the matter is finalised.
Welcoming the convictions, Mothibi said rehabilitation trusts played a critical role in protecting communities from the environmental consequences of mining.
“Rehabilitation trusts exist to ensure that surrounding communities are not left to carry the cost of the damage mining leaves behind. We commend the prosecution and investigation team for securing such a crucial conviction. We remain committed in the fight against corruption,” Mothibi said.