THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case No: 428/17, 491/17, 635/17, 636/17

In the matter between:
ALFEUS CHRISTO SCHOLTZ                                    FIRST APPELLANT
TRIFECTA INVESTMENT
HOLDINGS (PTY) LTD                                            SECOND APPELLANT
TRIFECTA HOLDINGS (PTY) LTD                          THIRD APPELLANT
TRIFECTA TRADING 434
PROPERTY 4 (PTY) LTD                                        FOURTH APPELLANT
TRIFECTA TRADING 434
PROPERTY 5 (PTY) LTD                                             FIFTH APPELLANT
TRIFECTA TRADING 434
PROPERTY 7 (PTY) LTD                                             SIXTH APPELLANT
TRIFECTA TRADING 434
PROPERTY 11 (PTY) LTD                                    SEVENTH APPELLANT
JOHN FIKILE BLOCK                                             EIGHTH APPELLANT
CHISANE INVESTMENT (PTY) LTD                       NINTH APPELLANT

and

THE STATE                                                                               RESPONDENT

Neutral citation:  Scholtz & others v The State (428/17, 491/17, 635/17,
636/17) [2018] ZASCA 106 (21 August 2018)

Coram:
Leach, Mathopo, Van der Merwe and Mocumie JJA and Mothle
AJA
Heard:
3 May 2018
Delivered: 21 August 2018

Summary: Corruption under ss 3 and 4 of the Prevention and Combating of
Corrupt Activities Act 12 of 2004 – what constitutes – offence committed even
if gratification paid after the event.

Sentence to be imposed in respect of offence of corruption – factors relevant
thereto – little weight to be afforded to compensatory order.

________________________________________________________________
ORDER
________________________________________________________________

On appeal from: Northern Cape Division of the High Court, Kimberley
(Phatshoane J sitting as court of first instance):

A
In case numbers 428/17 and 635/17:
The appeal of the first appellant against his conviction of corruption on
count 16 is upheld and such conviction and the sentence imposed on that
count are set aside.
The appeals of the first, second and third appellants against their
conviction of money laundering on count 34, as well as the appeals of the
first and third appellant against their conviction of money laundering on
count 35, are upheld and such convictions and the sentences imposed in
respect thereof are set aside.
Save as the foresaid, the appeals of the first to seventh appellants are
dismissed and their convictions, as well as the sentence of 15 years’
imprisonment imposed on the first appellant in respect of count 15,
confirmed.
B
In case numbers 491/17 and 636/17:
The appeals of the eighth and ninth appellants (the ninth and tenth
accused) against their convictions of money laundering on count 35 are
upheld, and their convictions and sentences on that count are set aside.
Save as the foresaid, the appeals of the eighth and ninth appellants against
their conviction on count 15 and the eighth appellant against the sentence
of 15 years’ imprisonment imposed on that count are dismissed, and that
sentence is confirmed.

C
The Registrar of this court is directed to forward a copy of both this
judgment and the record to the Law Society of the Northern Provinces for
it to consider possible disciplinary action in the light of para 213 of the
judgment.

________________________________________________________________
JUDGMENT
________________________________________________________________
Leach JA (Mathopo, Van der Merwe and Mocumie JJA and Mothle AJA
concurring)

Introduction and background
[1] Flowing from the circumstances under which certain commercial
properties were leased to the Northern Cape’s Department of Social Services
and Population Development, 12 accused, including the nine appellants, were
arraigned in the Northern Cape Division of the High Court, Kimberley on a
plethora of charges, that included various counts of corruption, money
laundering and fraud.

[2] The trial was a lengthy and drawn out affair, during the course of which
several of the charges were withdrawn. Commencing on 3 February 2014, it ran
intermittently until judgment on the merits was delivered on 13 October 2015.
At the end of the State’s case, the accused applied for their discharge and when
that application was refused, they applied to the learned judge to recuse herself.
That, too, was refused. Such refusal will be dealt with more fully in due course.
During the course of presentation of the defence case, but after she had testified,
the eighth accused, Ms Y Botha, died of cancer.

[3] In any event, at the end of the day the court a quo convicted the first
accused, Mr Scholtz, and the second to seventh accused, companies in which he
had an interest, on count 8, a charge of corruption. The first and third accused
were also each convicted on a further charge of corruption, count 16, as well as
money laundering on counts 34 and 35. The second accused was also convicted
of money laundering on count 34 but acquitted on a similar charge, count 35.
Mr Block, the ninth accused, and his company Chisane Investment (Pty) Ltd,
the tenth accused, were both convicted on count 15, a charge of corruption, as
well as of money laundering on count 35. Accused 11 and 12, respectively Mr
Alwin Botes and his company, Itile Supply Services (Pty) Ltd, were acquitted
on all charges. Substantial fines were imposed on the second to seventh
accused, whilst the first and ninth accused were sentenced to an effective 15
years’ imprisonment. As the tenth accused was bereft of assets, no sentence was
imposed on it.

[4] The court a quo granted those accused who had been convicted, leave to
appeal to this Court against their convictions, but refused them leave in regard
to their sentences. The first and ninth accused (who are the first and eight
appellants) later obtained the leave of this Court to appeal against their
sentences. Flowing from this, for some inexplicable reason four different appeal
files were opened, each with its own appeal number: case no 428/2017 in regard
to the convictions of the first to seventh appellants (the first to seventh accused);
case no 491/2017 in respect of the convictions of the ninth and tenth accused
(the eighth and ninth appellants); case no 635/2017 relating to the first
appellant’s sentence; and case no 636/2017 for the eighth appellant’s sentence.
However, as the appeals against both the appellants’ convictions and the
sentences of the first and eighth appellants were otherwise treated as a single
appeal, I intend to provide a single judgment. In doing so, as certain of the
accused initially before the court a quo are not parties to this appeal, I shall

where convenient refer to the individual appellants either by name or by their
accused number as reflected in the record.
[5] As it will appear more fully in due course, the charges on which the
appellants were convicted relate to a number of lease agreements concluded by
various State entities or departments in the Northern Cape with members of
what is known as the Trifecta Group of Companies (the second to seventh
accused) during the period May 2006 to August 2008. As appears from the
documentation included in the record, a company named Trifecta Trading 434
(Pty) Ltd was registered under number 2003/018438/07 on 1 August 2003. Its
name was changed with effect from 18 January 2006 to Trifecta Holdings (Pty)
Ltd (the third accused). Trifecta Investment Holdings (Pty) Ltd (the second
accused) was registered, albeit under a different name, under number
2006/011099/7 on 11 April 2006. The majority of its shares were held by the
Casee Trust, a private trust of the first accused, Mr Scholtz, and the Shosholoza
Trust, the family trust of Mr Breda. The second accused is the majority
shareholder of the third accused whilst the latter is either the majority or sole
shareholder of the fourth, fifth, sixth and seventh accused which were used to
acquire and then rent out properties. (The documentary evidence is to the effect
that the fifth accused is wholly owned by the third accused. Information was
placed before the Department of Social Services that 75% of its shares were
owned by the Shosholoza Trust and the remaining 25% by the Casee Trust. This
conflict was not explained in the evidence and is of no great impact.)

[6] Corruption is all too often an issue which has to be determined by way of
inference drawn from the proven facts. In this regard, like pieces in a jig-saw
puzzle, a number of events need to be taken into account to determine the full
factual matrix from which inferences may permissibly be drawn. For this reason
it is necessary to consider in detail the evidence on record in order to determine
whether the court a quo correctly convicted the appellants.

[7] The first accused (and first appellant), Mr Scholtz, is a businessman
based in Pretoria, engaged in the private equity sector of the economy. He
administered a private equity fund which advanced funds for investment in
commercial ventures and, as a quid pro quo, obtained shares in the companies
used to conduct such ventures (generally a minimum of 25% of the
shareholding). In this way, as more fully set out below, he became a shareholder
in the Trifecta Group of companies, of which Mr Sarel Breda, another Pretoria
businessman, was a director and shareholder.

[8] Mr Breda was running a company, known as Granite City, which dealt in
granite slabs and granite installations. He and Mr Scholtz had first met in the
year 2000 when he approached Mr Scholtz for financial assistance for a large
contract he had obtained to do the granite installation in a well-known
Johannesburg hotel that was being converted into a conference centre. Mr
Scholtz provided the necessary finance. From this initial contact, the
relationship between them blossomed and Mr Breda asked Mr Scholtz to help
him as a business mentor. This he was prepared to do although, in accordance
with his business model, he stated that he did not become involved in the day to
day administration of any of the companies involved.

[9] At the time he first met Mr Breda, Mr Scholtz was one of a number of
partners in a private equity fund which invested mostly in the
telecommunication and service industries. In 2004, however, he started his own
private equity fund and broadened the scope of his investments to include,
amongst others, various property developments and a diamond dealing house to
which he introduced Mr Breda. This, in turn, led to Mr Breda being engaged as
a so-called ‘spotter’ who made regular visits to mining companies and diggings
to seek out diamonds in which to invest.

[10] In late 2004, or early 2005, on reading an article in the Business Day
newspaper, Mr Scholtz learned that the Northern Cape lacked the necessary
infrastructure and housing to accommodate provincial government departments.
Leasing suitable accommodation to the State thus appeared to be a potentially
lucrative source of income, particularly for an entrepreneur having Black
Economic Empowerment (BEE) credentials. He envisaged a business model of
acquiring largely rundown buildings such as hostels, hotels or blocks of flats,
renovating and refurbishing them, and then leasing them to provincial
government departments.

[11] He explained this to Mr Breda, a historically disadvantaged individual,
who had BEE credentials and was regularly in the Northern Cape on his
diamond spotting rounds. He asked Mr Breda to make enquiries in regard to the
possibility of such a business venture in the province. Although Mr Breda
subsequently confirmed that there was indeed a potential market, he
‘disappeared for a while’ – as Mr Scholtz put it. However, in October 2005, Mr
Breda reappeared and asked Mr Scholtz for financial assistance, explaining that
he had already made offers to acquire properties in the Northern Cape with the
intention of renting them to the State. The inference is inevitable that pursuant
to their earlier discussion, Mr Breda had decided to invest in fixed properties for
that purpose.

[12] According to Mr Scholtz, he agreed with Mr Breda that any business
venture on which they embarked should involve the participation of a broad
base empowerment group of previously disadvantaged individuals, preferably
women and children. Mr Scholtz claimed that he did not know any previously
disadvantaged persons in the Northern Cape other than Mr Breda and, for that
reason, it was decided that Mr Breda would identify people or entities as
potential BEE participants in the venture. They agreed that any shareholding
would have to be transferred to the BEE participants without requiring payment

from them or, at most, payment at par value of the shares. Their shareholding
would be held by Mr Breda in his Shosholoza Trust, pending transfer to the
identified participants. Mr Scholtz claimed that his involvement in the venture
at that stage was minimal and consisted in the main of the provision of capital
requirements which he provided through his family trust, the Casee Trust.

[13] It is necessary at this stage to take a step back in time and detail how
Mr Breda had come by this investment opportunity. He was apparently a
prominent member of the African National Congress (the ANC), the ruling
political party both in national government and in the Northern Cape. So was
the ninth accused (but eighth appellant), Mr John Fikile Block, who had served
as the provincial secretary of the ANC in that province for more than a decade.
From March 2001 to December 2003, Mr Block had also been the MEC for the
Department of Roads, Transport and Public Works (for convenience I intend to
refer to it simply as the Department of Public Works). And although Mr Block
was not holding a provincial government post at the time, his star was on the
rise and he was shortly due to become the ANC’s provincial chair. In any event,
he subsequently became an ANC member of the Northern Cape’s legislature
and, on 2 December 2008, was appointed MEC for the Department of
Education. He served in that capacity until 11 May 2009 when he was appointed
MEC for Finance. It is clear from this that Mr Block was a man of considerable
political influence in the Northern Cape. He was also a director of his private
company, Chisane Investment (Pty) Ltd, the tenth accused (the ninth appellant),
which had been registered on 18 February 2004.

[14]  Mr Scholtz’s information that there was a dire need for office space in
the Northern Cape to accommodate government departments and State
agencies, was correct, and it is clear from the undisputed evidence of the
witness, Mr E J Crouch, who was the Director of Property Management in the
Department of Public Works, that Mr Breda had solicited Mr Block’s help to

secure leases with State entities. The head of that department (the HOD) was Mr
Selemela who, in 2005, had appointed Mr Crouch as head of a recently
established property unit whose function was to provide accommodation for all
the various provincial State departments.

Supply Chain Management Procedures
[15] It is convenient at this stage to deal with the prescribed procedures to be
followed in procuring accommodation for a department or State entity. As a
starting point, s 217(1) of the Constitution prescribes that when an organ of
State in the national, provincial or local sphere of government contracts for
goods or services ‘it must do so in accordance with a system which is fair,
equitable, transparent, competitive and cost-effective’. Pursuant to this the
Public Finance Management Act 1 of 1999 (the PFMA), as amended by the
Public Finance Management Amendment Act 29 of 1999 – the purpose of the
latter Act being to amend the former to provide for the application of the former
to provincial governments – was enacted to regulate financial management in
national and provincial governments and, as set out in its long title, ‘to ensure
that all revenue, expenditure, assets and liabilities of those governments are
managed efficiently and effectively . . .’.

[16] Under s 36 of the PFMA every department must have an accounting
officer. Section 38 of the PFMA goes on to lay down the general responsibilities
of accounting officers. Inter alia, the accounting officer for a department must
maintain an ‘effective, efficient and transparent systems of financial and risk
management and internal control’ – s 38(1)(a)(i) – and ‘an appropriate
procurement and provisioning system which is fair, equitable, transparent,
competitive and cost-effective’ – s 38(1)(a)(iii). The accounting officer is also
‘responsible for the effective, efficient, economical and transparent use of the
resources of the Department’ – s 38(1)(b). Moreover, under s 76 of the PFMA
the National Treasury must make regulations or issue instructions applicable to

departments concerning a variety of matters, including financial management
and internal controls of all institutions to which the PFMA applies – s 76(4)(b) –
and the determination of a framework for an appropriate procurement and
provisioning system which is fair, equitable, transparent, competitive and cost-
effective – s 76(4)(c).

[17] On 5 December 2003, the National Treasury issued what became known
as the Supply Chain Management Regulations1 which obliged national and
provincial departments to establish a system of Supply Chain Management
(SCM) for the acquisition of goods and services. These regulations were
repealed with effect from 15 March 2005 by the Treasury Regulations for
departments, trading entities, constitutional institutions and public entities, (the
Treasury Regulations). Promulgated under s 76(4)(c) of the PFMA, they were
similar in nature, albeit more extensive, than the regulations they repealed.
Regulation 16 thereof also provides for a SCM framework to apply to all
national or provincial departments whilst reg 16A3.1 provides that the
‘accounting officer or accounting authority of an institution to which these
regulations apply must develop and implement an effective and efficient supply
chain management system in his or her institution for the acquisition of goods
and services’. Regulation16A3.2 goes on to require such an SCM system to be
‘fair, equitable, transparent, competitive and cost effective . . .’. Then,
importantly, reg 16A6 provides:
‘16A6.1 Procurement of goods and services, either by way of quotations or through a bidding
process, must be within the threshold values as determined by the National Treasury.
16A6.2 A supply chain management system must, in the case of procurement through a
bidding process, provide for –
(a) the adjudication of bids through a bid adjudication committee;
(b) the establishment, composition and functioning of bid specification, evaluation and
adjudication committees;

1 ‘Regulations in terms of the Public Finance Management Act, 1999: Framework for Supply Chain
Management, GN R1734, GG 25767, 5 December 2003.’

(c) the selection of bid adjudication committee members;
(d) bidding procedures; and
(e) the approval of bid evaluation and/or adjudication committee recommendations.’
[18] In April 2006 the Northern Cape government published its provincial
SCM policy to give effect to its statutory obligations contained in the legislative
matrix set out above. This policy proclaimed that it had been adopted in
September 2005 by the provincial government under the PFMA and the
regulations under that Act published in Government Gazette 25767 on
5 December 2003. However as appears from what I have said above, those were
the Supply Chain Management Regulations that had been repealed six months
previously and, presumably, it was intended to refer to the Treasury Regulations
which had come into operation on 15 March 2005.

[19] Be that as it may, both the Treasury Regulations and the SCM policy
contain various provisions relevant to the present matter. Regulation 16A8.3(a)
provides that a SCM official or other role player ‘must recognise and disclose
any conflict of interest that may arise’ while reg 16A8.3(c) stipulates that such a
person ‘may not use their position for private gain or to improperly benefit
another person’ and reg 16A8.3(d) in turn requires officials to ‘ensure that they
do not compromise the credibility or integrity of the [SCM] system through the
acceptance of gifts or hospitality or any other act’.

[20] Importantly, clause 9 of the SCM Policy goes on to provide that goods
and services may be acquired by way of different delegation levels. Thus
telephonic quotations up to R10 000 per case required three quotations, and the
one accepted had to be confirmed in writing for purposes of audit. Formal
written quotations, with a minimum of three per case, were required for
acquisitions of a transaction value over R10 000 and up to R200 000. A
competitive bidding process for acquisitions exceeding R200 000 per case was
prescribed with bids to be advertised in the Government Tender Bulletin, the

Diamond Fields Advertiser and Die Volksblad and, where applicable, in the
Northern Cape Regional Newspapers. I should mention that this echoes
Treasury reg 16A6.3(c) which requires bids to be advertised in the Government
Tender Bulletin for a minimum period of 21 days before closure, save in urgent
cases.

[21] The provisions of reg 16A6.2 quoted above are  also echoed in the SCM
Policy which requires bids for the acquisition of goods and services to be
evaluated initially by a
Bid Evaluation Committee (BEC) whose
recommendation is thereafter to be taken into consideration by a Bid
Adjudication Committee (BAC). As was explained by the witness Ms Potgieter,
who was at the time the director of asset management in the provincial
Treasury, under the Province’s SCM Policy a recommendation made by the
BAC will be considered by the HOD, who has the discretion to agree or
disagree, or to alter the terms on which the relevant department would commit.

[22] However reg 16A6.4 provides that if in a specific case it is ‘impractical to
invite competitive bids’, the accounting officer may procure the required goods
or services by other means and, in that event, ‘the reasons for deviating from
inviting competitive bids must be recorded and approved by the accounting
officer’. The necessity to act in this way was stressed by the National Treasury
in its practice note SCM 2 of 2000 circulated to all accounting officers on 10
May 2005. Ms Vosloo also testified that a deviation from the official acquisition
process on inviting competitive bids for specific procurement would only be
justified in an ‘extremely urgent or emergency situation’.

[23] Clause 24 of the SCM Policy is also pertinent to the issues that arise in
this matter. It provides as follows:
‘UNSOLICITED BIDS


The Accounting Officer should refrain from considering unsolicited bids received
outside a normal bidding process as it eliminates transparent competitive acquisition
processes.

If an unsolicited bid is considered due to an exceptional product benefit, or cost
advantages of a person or company is the sole provider of a product or service the
following procedure must be followed:-
-
The Adjudication Committee must consider the unsolicited bid, the meeting must
take into account any comments submitted by the public and have to acquire
written inputs from Provincial Supply Chain Management prior to making a
recommendation to the Accounting Officer.
-
If any recommendations of the Provincial Supply Chain Management Unit are not
followed, the Accounting Officer must submit to the Auditor-General and the
Provincial Supply Chain Management Unit the reasons for rejecting or not
following these recommendations. Such submissions must be made before any
commitment is made or contract entered into. The Auditor-General and Provincial
Supply Chain Management Unit will have 30 days from receiving the submission
to provide inputs to the Accounting Officer during which period no contract may
be concluded.’

[24] Bearing these requirements in mind, I turn now to consider the
circumstances under which the various leases which form the heart of the
charges against the accused came to be concluded. I shall deal with each of the
properties in the order in which the leases were concluded.

The Northern Cape Training Centre and the Kimberlite Hotel, Kimberley
[25] It was in respect of the Northern Cape Training Centre (NCTC) and the
Kimberlite Hotel, Kimberley that Mr Breda had approached Mr Scholtz for
financial assistance in October 2005. As appears from what follows, the
procedures relating to the leasing of property outlined above were not followed
in respect of these properties. Mr Crouch testified that on Tuesday, 17 May
2005, he received a telephone call from Mr Block, who was at the time the

Deputy Chair of the ANC in the Northern Cape. Mr Crouch, who was also a
member of the ANC, knew who Mr Block was and what position he held. He
had served as a director in the Department of Public Works when Mr Block had
been the MEC for that department in 2001 to 2003. Mr Block had it seems long
been a prominent member of the ANC and, as already mentioned, was shortly to
become the provincial chair of the party. He referred to him as the ‘Big Chief’.

[26] In any event, Mr Block told him that he had sent Mr Breda to see him,
that Mr Breda was also ‘in the building environment’ and that he should see
how he could help him. Mr Crouch stated that in the light of the position
Mr Block held, he took this as an instruction to help Mr Breda. When asked
why he had not objected to this, he said that Mr Block had been his leader for
many years, had previously been his MEC, and that, in the Northern Cape,
everyone listened when Mr Block spoke.

[27] In any event, Mr Block gave him Mr Breda’s cell-phone number and said
he should contact him. Even before he could do so Mr Breda, who he had not
previously met, arrived at his office and introduced himself, stating that he had
been sent by Mr Block. He further explained that he had two properties in
Kimberley available to lease to the State. These were the NCTC building and
the old Kimberlite Hotel,

[28] As head of the property unit, Mr Crouch had recently received requests
for accommodation from two government departments, the Department of
Sport, Arts and Culture and the Department of Agriculture and Land Reform
(again for convenience I shall truncate the names of these departments to the
Department of Sport and the Department of Agriculture, respectively). He
therefore told Mr Breda that he would make arrangements to meet with the
HOD’s of these two departments and for them to inspect the buildings to see if
they would be suitable. He also explained that protocol demanded that the

service provider, in this instance Mr Breda, should not be present at any
inspection. He later reported his meeting with Mr Breda to his own HOD,
Mr Selemela, to whom I shall later refer.
[29] After this initial meeting, Mr Breda came to visit Mr Crouch’s office on
several occasions, and pestered him about progress on the proposed leases,
despite it being explained that certain procedures had to be followed before
leases could be concluded. Eventually Mr Crouch telephoned Mr Block, to
explain to him that prescribed procedures had to be followed and that members
of his staff were beginning to feel uncomfortable as a result of Mr Breda’s visits
and wanted to know why he was being afforded priority. Mr Block brusquely
answered by telling Mr Crouch to see to it that the question of office
accommodation for the Department of Sport be finalised.

[30] The following day, Mr Breda again arrived unannounced at Mr Crouch’s
office and told him that the ‘Big Chief’ had said he should come and fetch him
and take him to inspect the buildings. Mr Crouch complied and accompanied
Mr Breda, first to the NCTC building. In an entry in his diary dated
15 September 2005, he recorded that Mr Breda had told him that he was busy
finalising the purchase of the building and that, although it did not at the time
provide adequate office accommodation, he would see to it that it would be
altered to meet the needs of the Department of Sport.

[31] From there they proceeded to the Kimberlite Hotel which had been
proposed as accommodation for the Department of Agriculture. Whilst
inspecting that property, which as it stood also did not provide adequate office
accommodation but which Mr Breda said he would rectify to meet what was
required, the HOD of the Department of Agriculture, Mr Mothibe, and another
representative of that department, Mr Thabang, arrived to view the building.

[32] It is necessary to record at this stage that on 12 July 2005 the Premier of
the Northern Cape had addressed the following letter to the MECs of the
various Provincial Departments:

‘RE: LEASE AGREEMENTS
In terms of Chapter 13 sub-paragraph 13.2.4 of the Treasury Regulations promulgated in
terms of the Public Finance Management Act No 1 of 1999 as amended. “The accounting
officer of an institution may, for the purpose of conducting the institution’s business, enter
into lease transactions without any limitations provided that such transactions are limited to
operating lease transactions”.
With immediate effect, the Head of Department and Accounting Officer of the Department of
Transport, Roads and Public Works shall cease to enter into any lease agreements on behalf
of other Provincial Departments in due observance of the Public Finance Management Act
and its Regulations.
However, the department of Transport, Roads and Public Works will advise the Departments
on how best and effective to utilize the available space in terms of standing National Public
Works norms and standards.
For those departments where the Department of Transport, Roads and Public Works is
responsible for budgeting and paying for office accommodation on behalf of other
departments, the Department of Transport, Roads and Public Works must engage other
departments including Provincial Treasury to agree on the amounts to be transferred to the
different departments in the adjustment estimates and over the medium term expenditure
framework.
Agreement must also be reached between departments and the Department of Transport,
Roads and Public Works with regard to the date on which departments must take full
responsibility for the budgeting and payment of such leases.
Your cooperation in this regard will be highly appreciated.’

[33] The effect of this directive was to divest Mr Crouch of his capacity to
negotiate leases on behalf of various provincial departments, and that it was
thereafter up to the various HODs to rent accommodation for their departments.
Mr Crouch said he became aware of this letter at the time of the inspection of
the NCTC Building and the Kimberlite Hotel. However he explained that as he

had years of experience in the Department of Public Works, he understood his
continuing role to be to provide support and advice to the various other
departments.

[34] Some two weeks later, on 28 September 2005, Mr Crouch again went to
view the Kimberlite Hotel building. On this occasion he was accompanied, inter
alia, by Mr Breda, Mr Mothibe and Ms T M Joemat-Pettersson, the latter being
the MEC for Agriculture and Land Affairs in the province at the time, who
appeared to support the idea of the Department of Agriculture renting the
building. On that occasion Mr Breda made it clear that he was the owner of the
building, although he had earlier indicated that he was still in the process of
purchasing it. Further meetings between Mr Crouch, the HOD and various other
officials of the Department of Agriculture were held during October 2005 at
which the lease of the Kimberlite Hotel building, the alterations that would be
necessary to meet the department’s requirements and the floor planning
necessary to accommodate the department’s personnel, were discussed. Clearly
the project was viewed as viable by the provincial authorities, and it must have
been at about this time that Mr Breda went to see Mr Scholtz and told him about
the business opportunity he had negotiated but in respect of which he needed
finance as already mentioned.

[35] Despite these meetings having concentrated on the Kimberlite Hotel, the
proposed lease of the NCTC building had not been lost in the wash. The HOD
of the provincial Department of Sport was at the time Mr Henry Esau who had
been with Mr Mothibe of the Department of Agriculture during the inspection
of 15 September 2005. On 22 October 2005, Mr Crouch received a call from
Mr Esau asking him to attend a meeting at the guesthouse of Mr Breda’s wife.
On his arrival, he found Mr Esau in the company of Mr Breda. They had
already signed a written lease agreement in respect of the NCTC building and
he was requested to sign as a witness. This he did, without demur.

[36] The parties to this lease were, on the one hand, the Department of Sport,
on whose behalf Mr Esau had signed as lessee, and a company cited as ‘Trifecta
Trading (Pty) Ltd reg nr 2003/018138/07’ represented by Mr Breda, who had
signed as lessor. As appears from what has already been mentioned, the
company having that registration number is the third accused, Trifecta Holdings
(Pty) Ltd. However nothing turns on the failure to set out its name fully on this
lease. The crucial fact is that Mr Breda, acting on behalf of the third accused,
leased the NCTC building to the Department of Sport for a period of 15 years
with effect from 1 January 2005, renewable for another 15 years. The rental
agreed commenced at R108 000 per month but was to increase to R200 000 per
month for the second six month period, to R240 000 per month after a year, and
thereafter at 8% per annum.

[37] Two days after the signing of the lease of the NCTC building, Mr Crouch
attended another meeting with Mr Breda and the HOD of the Department of
Agriculture, Mr Mothibe. This time they discussed the plans for the Kimberlite
building and the renovations that were required. At a subsequent meeting on
7 November 2005, Mr Mothibe and Mr Crouch discussed various aspects of a
proposed lease relating to the Kimberlite Hotel. Shortly thereafter at yet a
further meeting, Mr Mothibe expressed his satisfaction with the building and
stated he would finalise the lease.

[38] Following these meetings, on 9 November 2005 Mr Mothibe and
Mr Breda, respectively representing the Department of Agriculture and Trifecta
Holdings (the third accused), signed a written agreement in terms of which the
department leased the Kimberlite Hotel for a period of ten years, commencing
on 1 March 2006, at a rental of R150 000 per month. The lease was signed at
the residence of the MEC, Ms Joemat-Pettersson, and was also witnessed by
Mr Crouch.

[39] After the conclusion of both the NCTC and Kimberlite Hotel leases,
Mr Crouch addressed separate letters relating to each property to Mr Breda. In
each he stated that all protocols, norms, standards, terms and conditions as
prescribed by the Department of Public Works had been followed. He testified
that he had been instructed to write these letters by the HOD of his department,
Mr Selemela, and had done so despite knowing that, as a matter of fact, the
necessary protocols and procedures prescribed for provincial government leases
already mentioned above, had not been followed. Whether they ought to have
been is a dispute to which I shall return in due course.

[40] It was only after these leases were concluded, that the Kimberlite Hotel
and the NCTC building were acquired by members of the Trifecta Group; the
former being purchased on 11 November 2005 for R7.3 million and transferred
to Trifecta Trading 434 (Pty) Ltd on 21 December 2005; the latter being
purchased on 23 December 2005 for R1.3 million and transferred to Trifecta
Holdings (Pty) Ltd on 25 May 2006. Both these purchases appear to have been
funded by way of advances secured by mortgage bonds registered by
commercial banks over the properties.

The Oranje Hotel, Upington
[41] In any event, the conclusion of the leases of the NCTC Building and the
Kimberlite Hotel was not the end of negotiations between Mr Breda and the
provincial government in regard to office accommodation. Section 4 of the
South African Social Security Act 9 of 2004 provides for the establishment of
the South African Social Security Agency (SASSA) as the agent for the
administration and payment of social assistance. In September 2005, the Chief
Financial Officer of the Department of Social Development, Mr Thabo Holele –
who was also the chair of the provincial bid adjudication committee (the BAC)
established under the SCM policy – sent a written request to the Department of

Public Works to start an open tender process to acquire office accommodation
for SASSA ‘across the length and breadth of the Province’.

[42] This request followed a discussion Mr Holele had held with Ms Yolanda
Botha who, as appears from what follows, played a pivotal role in the further
leases which lie at the heart of this case. Ms Botha had qualified with a BA
degree and a teaching diploma in 1989 and, the following year had commenced
work as an English teacher at a secondary school in Upington. In March 1994,
she experienced a meteoric rise when she was appointed an ANC national
senator, a post she held until 1996. Thereafter she served as an ANC member of
the Northern Cape’s provincial legislature from 1997 to 2001, and was
appointed the HOD of the Department of Social Services in 2001, a post she
held until April 2009. She thereafter served as an ANC member of parliament.
She was the eighth accused in the court below but, as mentioned at the outset,
tragically passed away from cancer before the conclusion of the trial.

[43] In a letter to the provincial tender board dated 17 October 2005, after
stating that it was fundamental to the transition of social services for SASSA to
acquire office space in the region, Mr Holele recorded that the immovable
property known as 43 Market Street, Upington (also known as the Diesel
Electric building) was suitable for a SASSA regional office. He set out the
terms on which its owner, Mr W Schmidt, was prepared to extend a lease for
five years and recommended that a lease on those terms be concluded. His
recommendation was supported by Ms Botha as HOD of Social Services.

[44] The Diesel Electric property was examined by an architect and various
departmental officials on 13 December 2005, and found to be suitable for
SASSA’s needs. It was 1270 m2 in extent, comprised two floors and could be
converted into 46 offices, 32 on the ground floor. Although there were certain
alterations that would have to be effected to accommodate SASSA at a cost of

some R450 000, Mr Schmidt was prepared to bear these expenses himself.
However, despite these advantages,
the MEC of Social Services,
Mr G Akharwaray did not agree to the property being leased without more ado,
stating that the matter ‘must be put on tender with a view to empowering BEE
players in that area’.

[45] As a result, on 2 November 2005, Ms Botha telefaxed a memorandum to
Mr Holele and Ms Daleen Vosloo (the latter being the assistant director of
administration in the Department of Social Services) informing them that the
MEC, Mr Akharwaray, had told her that he would not sign any lease agreement
relating to accommodation for SASSA until it had been subjected to a bidding
process. She instructed that all SASSA leases and procurements for office space
should be put on tender in order to advance BEE.

[46] Pursuant to this, on 7 November 2005 Ms Vosloo wrote to the Provincial
Tender Board. She explained that the MEC required bids for the provision of
office accommodation for SASSA in Upington and asked for permission to
advertise the invitation of bids for accommodation only in the local newspaper,
a publication that rejoices in the name of ‘Gemsbok’. Such restricted advertising
flew in the face of the Treasury Regulations as well as the Northern Cape’s
SCM policy which required that leases be advertised for a period of at least 21
days in the Government Tender Bulletin and two local newspapers. Without
waiting for the requested permission, an advertisement was placed in the
Gemsbok on 9 November 2005. The following week, on 14 November 2005,
Ms Vosloo sent a memorandum to Ms Botha, Mr Holele and the Director of
Social Assistance Grants, advising them that, in response to this advertisement,
bid documents had been issued to two prospective bidders in respect of the
Diesel Electric and Umbra buildings in Upington. It was only four days later
that the Tender Board, in a letter addressed to the HOD, approved  Ms Vosloo’s

request to allow publication of the invitation for bids to take place solely in the
Gemsbok.

[47] In any event, the Umbra building was not up to the mark. Indeed it
appears from a letter dated 10 October 2005, sent by the head of Corporate
Services of the Department of Social Services to Ms Vosloo, that the building
had already been inspected and found to be unsuitable for SASSA’s needs. On
the other hand, the Diesel Electric building was suitable, but its owner, Mr
Schmidt, lacked BEE credentials. It was due to this that negotiations with him
eventually broke down.

[48] But Ms Botha knew Mr Breda, whom she described as being her
‘comrade friend’. She contacted him and ascertained that he was prepared to
lease the old Oranje Hotel building in Upington to SASSA. As a result, she gave
his contact details to Ms Vosloo who, on 7 February 2006, sent an email to Mr
Thabo Masasa of SASSA to tell him of this ‘good news’. She went on to state
that Mr Breda had ‘HDI status’ (meaning he was a ‘historically disadvantaged
individual’); that Mr Masasa should liaise with Mr Breda to view the building
and with Mr Kevin Ryland in regard to the terms of a lease; and that she would
only become involved should the rental exceed R500 000 per annum as, in that
event, special approval (presumably under the SCM policy) would be needed.

[49] On 15 February 2006 a company known as Marssen 2 (Pty) Ltd was
registered and, on 20 February 2006, Mr Breda and Mr Scholtz were appointed
its directors. On 7 March 2006, its name was changed by special resolution to
Trifecta Trading 434 Property 5 (Pty) Ltd, ie the fifth accused. As appears from
a deeds office report, the fifth accused obtained transfer of the old Oranje Hotel
building on 3 March 2006, almost a month after Ms Vosloo’s email to
Mr Masasa.

[50] Ms Vosloo testified that due to the negotiations around the Diesel Electric
building having come to nought, Ms Botha’s introduction of Trifecta had been a
relief. Be that as it may, and in circumstances not unattended by confusion, the
Department of Social Services proceeded to enter into a written lease agreement
of the Oranje Hotel. On 20 March 2006 Mr Breda directed a letter to the
Department of Social Services on behalf of the third accused, confirming details
of the rental of the property which ‘excluded VAT’. A formal lease of the
building, now between the department and the fifth accused, was signed by Ms
Botha on behalf of the department that same day, ie about six weeks after she
had introduced Mr Breda to officials of the department. Mr Breda signed the
lease on behalf of the fifth accused on 28 March 2006.

[51] This lease was concluded without the Tender Board’s approval. On
28 March 2006 a written submission, prepared by Ms Vosloo but signed by Mr
Holele, was sent to the Tender Board. It stated that the ‘proprietor of the Oranje
Hotel, Trifecta Holdings (Pty) Ltd’ (the third accused and not the fifth accused
who was by then the registered owner) had offered 2 600 m2 of the Oranje Hotel
building at R49 per m2 (excluding VAT) per month for a period of five years
with the option to renew for a further five years; the all-inclusive monthly rental
would be R145 236; annual escalation would be fixed at 7.5%; the annual
income would exceed the standing delegation of R500 000 to provincial
departments in respect of rental for office accommodation; the HOD would
enter into a lease agreement on behalf of SASSA; and that officials from
SASSAs national office had approved of the building as its district office. It
concluded with a request that the provincial Tender Board ratify a lease on
those terms. This request was approved by Ms Botha as HOD under her
signature on 29 March 2006.

[52] When testifying, Ms Botha could not explain why she had signed the
lease before the Tender Board had even been asked to approve the lease and

before she had given her approval as Head of Department. It may be that she
signed the contract on the expectation that it would be ratified by the Tender
Board.  Her doing so, however, is not the only unsatisfactory aspect of her
conduct relating to this lease.

[53] In a letter addressed to the Department of Social Services for the attention
of Ms Vosloo, the Tender Board recorded that it had approved the request to
rent a portion of the Oranje Hotel ‘at a cost of R49 m2 excluding VAT for 5
years with 7.5% escalation annually’. It concluded ‘the Board further noted that
your HOD [ie Ms Botha] has signed the contract and this is ratified’. This letter
was dated 24 March 2006, but as it purported to be in answer to the submission
of 28 March 2006, it was presumably incorrectly dated. To compound the
confusion, there exists a memorandum dated 30 March 2006, submitted to the
Tender Board for discussion and decision, in which the head of the provincial
SCM recommended a lease of the Oranje Hotel on the identical terms proposed
by Mr Holele in his written submission to the Tender Board of 28 March 2006.
This, too, must have pre-dated the Tender Board’s ratification of the lease, and
corroborates a finding that the letter dated 24 March 2006 was not written on
that day.

[54] That is not the only issue on which there is a lack of clarity. The contract
signed by Ms Botha is for 2 640 m2 of rental space as opposed to the 2 600 m2
that had been offered by Mr Breda and referred to by both Mr Holele in his
submission of 28 March 2006 and the Tender Board’s memorandum of 30
March 2006. Furthermore, the all-inclusive rental was agreed in the lease at
R147 740.40 per month and not R145 236 per month as it initially been set out
in the request for approval of 28 March 2006. These differences
notwithstanding, what is truly remarkable is that Ms Botha went ahead to rent
premises approximately double the size and twice as expensive as the Diesel
Electric building that had been found to be suitable for SASSA’s needs. This

alone speaks for Ms Botha committing the Department of Social Services to an
unnecessarily expensive lease.

[55] There are further circumstances relevant to the impropriety of this lease.
As I have said, it was negotiated to provide SASSA with office accommodation.
SASSA had instructed all its regional offices that lease contracts were not to be
longer than three years. Despite this, Ms Botha had negotiated a five year lease.
On 7 March 2006 she had written to SASSA asking for a variation and
suggesting a period of five years. It was only on 30 March 2006 that the Chief
Executive Officer of SASSA wrote to Ms Botha and informed her that, taking
into consideration the scarcity of office accommodation in the area, permission
was granted to deviate from the instruction to allow for a lease period of five
years. This approval was also only granted after Ms Botha had already
committed the Department of Social Services to a five year lease.

[56] Furthermore, on 29 March 2006, the day after the lease had been signed
but before SASSA granted permission for a five year lease, Ms Botha on behalf
of the Department of Social Services, Mr Breda on behalf of the fifth accused,
and Mr F Makiwane purporting to represent SASSA, concluded a written
agreement under which the department ceded its rights and obligations under
the lease to SASSA with effect from 1 May 2006. Why this was done with such
rapidity, one does not know. What becomes clear, however, is that the leased
building was not ready for SASSA to use.

[57] I have already mentioned that the building was about double the size of
the Diesel Electric building, a property which met SASSA’s needs. That it was
just too big is borne out by the fact that, in fullness of time, various portions of
the leased premises which were surplus to requirements were sub-let. It is also
clear that, as it stood, the building needed a great deal of work to put it into a
condition in which SASSA could use it. On 19 May 2006, Mr Breda,

presumably acting on behalf of the fifth accused,2 wrote as follows to the
Department of Social Services for the attention of Ms Botha:
‘Your department entered into a lease agreement with Trifecta for and on behalf of the South
African Social Security Agency on 28 March 2006 for premises at Upington. The rental
agreement was based on the assumption that a minimum of modifications would be required
prior to the occupation of the South African Social Security Agency in May 2006.
The South African Social Security Agency (SASSA) wishes to obtain a specific corporate
identity for their premises throughout the Northern Cape Province. Due to this requirement it
will necessitate various additions, modifications and remodelling of the existing premises to
obtain the objective of SASSA. SASSA requested the modification and remodelling to be
according to their specifications and requirements. Various structural changes will be
necessary to the premises which will necessitate the involvement of professional practitioners
to ensure the correct methods and principles are adhered to during the modification and
alteration phase.
The capital cost to the premises to achieve the minimum requirements and specifications of
SASSA will be R3 839 995.00 inclusive of VAT. See attached annexure A for a breakdown
on the capital cost to modify the premises to the requirements of SASSA.
SASSA indicated that they do not have the capital to fund the modifications in their current
budget but are willing to discount the capital cost over the lease period.
Trifecta is willing to assist SASSA to achieve their objective to obtain specific corporate
identity on the basis of discounting the capital cost over the lease period.
Please note that Trifecta can only accommodate these modifications if the lease period is a
minimum of 120 months.
It is important to note that the modifications and alterations to the premises will take place
over a period of approximately 90 days from the day that the Department of Social Services
and Population Development agrees to the implementation of the modification to the current
lease agreement to accommodate the specific requirements of SASSA. SASSA indicated that
they wish to take physical occupation of the premises by 1 September 2006. We can only
partly accommodate their requirement if we receive the final lease agreement before 31 May
2006.
The Department will however be responsible for the rental during the modification and
alteration phase.’

2 But using the letterhead of Trifecta Trading 434 (Pty) Ltd.

The letter continued to state that the fifth accused was prepared to assist SASSA
by doing the envisaged alterations and providing a further 140 m2 of floor space
if the rental was increased by more than R20 per m2 from R49 to R69,80 per m2
with the annual escalation being increased from 7.5% to 8% and the lease
period doubled to ten years (despite SASSA’s original request that it be no
longer than three years). Moreover, despite this and the fact that the building
was only likely to be ready in September, it wished rental to be payable with
effect from 1 May that year.

[58] Subsequent to this, the Department of Public Works inspected the Oranje
Hotel premises – which I should mention had been transferred into the name of
the fifth accused on 3 July 2006 pursuant to a written deed of sale by which it
purchased the property for R14 million – presumably in order to consider its
position. In a written report dated 5 July 2006, it set out the various alterations
that would be needed. The same day Ms Botha co-signed a letter on behalf of
SASSA to the Department of Public Works, a copy of which was sent to
Mr Crouch, requesting help to urgently estimate the cost of the proposed
alterations to the building ‘as we (are) already in the third month of the lease
agreement, and have not as yet taken occupation of the premises’.

[59] Ms Botha also telephoned Mr Crouch to request his help in obtaining an
estimate of costs for alterations to the building. Although such costing was not
part of his responsibilities, he requested his regional office in Upington to do the
necessary. When there was some delay in this regard, Mr Crouch received a call
from Mr Block who asked how far the costing exercise had proceeded. He
explained that work had commenced but that certain procedures had to be
followed. To this Mr Block brusquely replied that Mr Crouch should see to it
that the process should be speeded up and finalised or else he would come and
do the work himself. As a result of this, Mr Crouch contacted his subordinate in

Upington responsible for doing the costing and instructed him to hurry things
along.

[60] Thereafter, on 17 August 2006, SASSA and the fifth accused, represented
by Mr Breda, signed a lease agreement for the Oranje Hotel premises which
reflected the increases Mr Breda had sought in his letter of 19 May 2006. It
appears from a letter of 11 April 2017 which Mr Breda sent to SASSA, that the
latter was given what he referred to as ‘beneficial occupation’ on 1 December
2006 but only took physical occupation of the property on 3 January 2007.
However in terms of the leases, from May 2006 it paid rental in the sum of
R235 930.98 per month for seven months (a total of R1 651 516.86) to the fifth
accused despite not being in occupation. Simply put, the fifth accused, aided
and abetted by Ms Botha’s interventions ended up with a lease extremely
beneficial to it and binding for a far longer period than SASSA had wanted.
Flowing from this lease, until January 2012, SASSA paid in excess of R18
million in respect of rental for the property.

14 Riebeeck Street, Springbok
[61] The lease of the premises at 14 Riebeeck Street, Springbok, was
concluded a few months after the Upington leases. On 17 August 2006, the
Physical Unit of the Department of Social Services visited Springbok together
with Mr Breda who showed them a block of flats which he said he was going to
convert into offices. On 30 August 2006, Mr R M Saal, the Manager of that
unit, sent a memorandum to Mr Holele in regard to the crucial need for office
accommodation in Springbok, and sought permission to advertise a bid in the
local newspapers. In a subsequent memorandum dated 13 October 2006, Mr
Saal reported to Ms Vosloo on the visit of 17 August and stated that there was at
the time insufficient office space in Springbok for the various departments that
were there as well as the officials of SASSA, and that there was no option but to
acquire more accommodation. Since, so he said, the property Mr Breda had

pointed out was the only other accommodation available in the town, he
recommended that the Department of Social Services look into the possibility of
leasing it.

[62] In any event, on 15 September 2006 advertisements inviting bids for
office accommodation were placed in the Diamond Fields Advertiser, the
Noordwester and Die Plattelander by Ms Flatela, who was at the time the
secretary to the BEC and BAC. The advertised closing date for bids was
29 September 2006, with a period of lease being set out as three to five years
with an option to renew for a similar period, the date of commencement being
January 2007. On the instructions of Ms Botha, the lease period was
subsequently changed to ‘negotiable’ and an erratum to this effect was
advertised in the press.

[63] The fifth accused submitted a bid in response to this advertisement.
Under its contracting information, responsibilities and condition (again
submitted under a letterhead of Trifecta Trading 434 (Pty) Ltd) it recorded that
the floor size it offered was 1300 m2 with the final measurements to be
confirmed on occupation, and an annual escalation of 8%. The rental was
offered at a monthly rental of R65 per m2 excluding VAT, R120 per m2 for
parking and R165 per m2 for shaded parking. The minimum lease period of 120
months (ten years) was proposed with an option to renew for a further 60
months (five years).

[64] On 5 October 2006, Ms Vosloo wrote to Ms Botha informing her that
only one bid, that of the fifth accused, had been received, but that on receipt of
the fifth accused’s registration certificate, the list of shareholders did not
correspond to the information contained in the bid documents which rendered
the bid invalid. She stated that there was severe pressure to obtain alternative
accommodation in Springbok, and sought permission to advertise a fresh bid for

one week in three local newspapers. Ms Botha approved this shortened period.
She explained when testifying that she had done so as the tender had already
been previously advertised and there was an accommodation crisis.

[65] A bid for office accommodation at Springbok was re-advertised as a
result, with the closing date of 16 October 2006, the lease period being
‘negotiable’ and a date of commencement being January 2007. As the court a
quo observed, what was remarkable about this is that in the initial cancelled bid
the fifth appellant had offered a ten year lease despite the advertisement having
stipulated that it was to be for a period of three to five years, and this
subsequent advertisement did not refer to the shorter period its predecessor had
contained. The re-advertisement was also not placed in the Government Tender
Bulletin. According to Ms Botha, this was as it took a week for the Government
Tender Bulletin to process an advertisement and the delay would be too long.

[66] Although only one prospective bidder, Trifecta (accused 5) requested the
bid documents on 11 October 2006, two bidders responded to the advertisement
– accused 5 and accused 12, the latter’s bid documents having been submitted in
person by accused 11, Mr Alvin Botes. Both offered the same building for
rental. Indeed both bids were virtually identical, the only difference being that
accused 5’s bid made no provision for shaded parking as was the case in
accused 12’s bid.

[67] On 18 October 2006, Ms Flatela sent a memorandum to Ms Botha
informing her that the bid of accused 5 scored 97.16 points out of 100 and that
of accused 12, had scored 70.31 points. The same day both the BEC and the
BAC held meetings and resolved to approve accused 5’s offer subject to various
conditions. These included a lease period of five years with an option to renew
for another five years; the installation of air-conditioning; and that the
escalation be increased to 9.5% from the 8% tendered.

[68] In the normal course, the BEC would first make an evaluation of a bid
and make a recommendation that the BAC would then consider. This did not
happen in this instance. Instead the BAC first decided to accept the fifth
accused’s bid and thereafter the members of the BEC were requested ‘to concur
with the recommendation as approved by the Adjudication Committee and to
sign on the space below’ – which they all did. In any event, once this had taken
place, the recommendation that the fifth accused’s offer be accepted subject to
those conditions was placed before Ms Botha for her approval as HOD. This she
gave on 19 October 2006, but:
‘With the proviso that we change the lease period to 120 months with an option to renew for
another 120 months (10 years). It makes sense since it will provide institutional stability for
department.’

[69] Ms Vosloo promptly informed Mr Breda that the fifth accused’s offer had
been accepted, subject to a ten year lease renewable for ten years and an annual
escalation of 9.5% applicable for the duration of the lease; that there be secure
lockable overnight parking for 10 to 15 official vehicles; that air conditioning
and an electronic alarm system be installed; and that all renovations were to be
completed before occupation.

[70] Pursuant to this, the fifth accused and the Department of Social Services
concluded a written lease agreement in Kimberley on 3 November 2006, signed
by Mr Breda and Ms Botha on behalf of the respective parties. It recorded a
commencement date of 1 March 2007, a commencement rental of R65 per m2
per month, a parking rental of R680 per month and a resulting total monthly
rental of R74 780 with an escalation of 9.5% and a determination date of
28 February 2017. Clause 14.2 thereof recorded that the written lease contained
the whole agreement between the parties and that representations or guarantees
not therein contained would not be binding.

[71] The written lease failed to deal with the various conditions (such as the
provision of parking and the installation of air conditioning or an electronic
alarm system) that had been set out in Ms Vosloo’s letter to Mr Breda of
19 October 2006. This failure was to be the source of trouble the following year.
In August 2007, there was a disagreement as to whether the Department of
Social Services was obliged to pay for parking at the premises. In an email Ms
Vosloo sent to Mr Vuba of the department’s legal support services on
28 August 2007, she stated that it was not supposed to pay for parking at all as it
had been included in the VAT exclusive rental of R65 per m2 and that the lease
agreement was incorrect as it did not correspond with the offer that had been
accepted. She also stated that the department had increased the annual
escalation of 8% to 9.5% as ‘compensation for the parking, alarm system, air
conditioning and blinds’.

[72] Mr Vuba included these contentions in a letter he addressed to the fifth
accused, in which he also alleged that the office space in fact measured almost a
170 m2 less than that agreed upon, and that there were no lockable overnight
parking base, no shaded parking base, no toilet facilities for people with
disabilities, no air conditioning, no electronic alarm system and no access
ability into the building for the disabled. He went on to record that the
department viewed these deficiencies in a serious light, and that the State’s
resources were being unjustly used. He concluded by placing the fifth accused
on terms to remedy things within 30 days failing which, so he stated, the lease
might be terminated.

[73] Mr Vuba took it upon himself to forward a copy of this letter to Rand
Merchant Bank, which held a bond over the property, presumably in respect of
funds advanced to the fifth accused to enable it to purchase it. The fifth accused,
or presumably Mr Breda on its behalf, took exception to this and contacted

Ms Botha. She, in turn, telephoned Mr Vuba that night and angrily instructed
him to immediately withdraw the letter to the bank. He complied. On 31 August
2007, he wrote to Rand Merchant Bank saying that he had discussed the matter
with Mr Breda, had resolved the outstanding issues in the lease and would not
be taking steps to terminate it as the matter had been ‘amicably resolved’. This
was a clear distortion of the truth.

[74] When testifying, Ms Botha stated that Mr Vuba had overstepped the mark
and that he ought to have brought the financial officer of the department to see
her to find a solution before sending out this letter. I should mention at this
stage that the court a quo found this to be ‘a glaring demonstration of the extent
to which Ms Botha went to protect the pecuniary interest of Trifecta and, as it
turned (out), her own’. As appears from what follows in due course, that
comment is justified.

[75] Be that as it may, in mid-2010, an addendum to this lease was eventually
signed in which the Department of Social Services agreed to lease additional
space in the Social Services Place Campus from the fifth appellant. But even
then, none of the difficulties set out by Mr Vuba were addressed.

Summerdown Place, Kuruman
[76] The events leading up to the conclusion of a lease in respect of this
property bear in many respects a striking similarity to those relating to the
Springbok property. As mentioned in para 60 above, on 17 August 2006
Mr Breda viewed the property in Springbok with members of the physical unit
of the Department of Social Services. The following day they all went to
Kuruman where offices purportedly owned by Mr Breda were inspected. And
just as he had done in respect of the Springbok property, on 30 August 2006
Mr Saal addressed a memorandum to Mr Holele in which he stressed the dire
need for the Department of Social Services to acquire office accommodation in

Kuruman and requested leave to advertise for office accommodation in the local
newspapers.

[77] In his subsequent memorandum of 13 October 2006 (the same
memorandum already mentioned in respect of the Springbok accommodation)
Mr Saal reported to Ms Vosloo that Mr Breda’s premises ‘would, with a few
alterations, accommodate the department’s increased multi-disciplinary staff’
and recommended that the department ‘explore the possibility of entering into a
lease agreement with the said proprietor as these office space will indeed satisfy
our Department’s need in terms of office accommodation’.

[78] In any event, in late September 2006 an advertisement was placed in a
number of newspapers in which bids were invited for the lease of office
accommodation in Kuruman, commencing January 2007 for a negotiable period
with an option to renew. Once again, and not surprisingly, Mr Breda used a
Trifecta company in order to make such a bid. On this occasion, however, he
used the sixth accused, Trifecta Trading 434 Property 7 (Pty) Ltd. This was a
company that had been incorporated in 2006 under the name Genvest 96 (Pty)
Ltd, the name of which was changed to Trifecta Trading 434 Property 7 (Pty)
Ltd on 3 March 2006, In October 2006 its auditor confirmed that 75% of its
shares were held by Trifecta Holdings (Pty) Ltd (the third accused) of which, in
turn, Mr Breda’s Shosholoza Trust held 75% of its shares, with the remaining
25% being held by Mr Scholtz’s Casee Trust.

[79] In any event, both the sixth accused and a company known as TEB
Properties CC responded to the advertisement. The sixth accused offered
1 300 m2 of the premises I shall refer to as Summerdown Place at a rental of
R65 per m2 per month excluding VAT for a period of ten years, with the option
to renew for a further five years and an annual escalation of 8%, with the lease
to commence on 1 December 2006. The precise terms of the opposing bid of

TEB Properties CC are unknown as its bid documents disappeared at some
stage and were never made available to the court a quo. However, in a letter
addressed by Ms Vosloo to the department on 23 October 2006, it is stated that
the offer was to construct a new building on an erf in Kuruman’s central
business district with a proposed date for occupation being ‘April or May 2007’.
As appears from this letter, comparison between the two offices resulted in the
sixth accused achieving a total score of 97.16 out of a 100 whilst TEB
Properties CC scored but 54.15.

[80] On 25 October 2006, the BEC discussed these competing bids. It
recommended the acceptance of the sixth accused’s bid ‘on condition that lease
period be reduced to five years instead of the ten years as offered’. Five days
later the matter came before the BAC which recommended not only that the
lease period be five years with an option to renew for another five but that there
should be an electronic alarm system installed and maintained, with monitoring
of the alarm to be paid by the department. Presumably this second
recommendation was due to the suggestion of Ms Vosloo in her email to
Mr Holele of 25 October 2006 reporting on the status of various bids for office
accommodation, apparently in preparation for the BAC meeting.

[81] Ms Botha, as HOD, was not happy with this. She approved the BAC’s
approval but again added the proviso that the lease period ‘be extended to ten
years (120 months) with an option to renew for another ten years and at 9.5%
annual escalation’. Effectively Ms Botha demanded that the original offer of a
ten year lease be accepted despite the views of the evaluation and adjudication
committees on the duration of the lease. She also demanded that an escalation
1.5% higher than that asked by accused 6 be paid, and that the option to renew
be extended from the five years offered to ten years.

[82] The increase of the rental period from five years to ten years was a source
of some dissatisfaction. The day after Ms Botha had insisted upon the longer
period, Mr Holele, the chair of the BAC wrote to her, explaining the rationale
for recommending a five year lease period. He stated that the manager of
Supply Chain Management had contacted several banks to ascertain whether
financial institutions had a policy regarding the approval of loans based on the
duration of the lease period. Absa Bank had informed him that a ten year loan is
not a prerequisite for approval and that such lease agreements are not common
practice ‘as it borders on ownership’. Standard Bank had stated that the general
norm for duration of leases was three years. Moreover the MEC for Finance had
been critical of ten year leases and, after long leases of that nature had been
agreed by other departments in the province, had concluded that leases for
longer than five years should be discouraged. In the light of these
considerations, the BAC had deemed it necessary to propose a five year lease
period.

[83] This letter was received by Ms Botha on 2 November 2006. Within four
days the concerns of the BAC had been magically swept away. On 6 November
2006, Ms Vosloo, as head of SCM, wrote to inform Ms Botha that the members
of the BAC had agreed to revise the lease period to ten years and, in order to
facilitate an installation of an electronic alarm system, to increase the annual
escalation from 8% to 9.5%. The increase in the duration of the lease was
alleged to be due to Rand Merchant Bank, the entity that was going to provide
accused 6 with the funds to acquire the building and to make the necessary
alterations, having insisted that ‘the minimum period of lease’ should be ten
years.

[84] In argument, much was made of Rand Merchant Bank’s attitude to show
that Ms Botha had not off her own bat sought to increase the duration of the
lease as she had done in the other leases dealt with above. However, no

representative from the bank was called to say this had been its attitude and a
letter from the bank tendered into evidence to support this allegation does not in
fact do so. Dated 4 October 2006, it requested various documents which it
stated were ‘still outstanding and will be needed to finalise the above
transaction’. These included copies of the lease clearly setting out its terms
including the minimum initial gross income, the annual rental escalation and the
minimum period of lease being ten years. Clearly all the bank did was call for a
copy of the lease agreement containing the terms which it had been informed
had been agreed upon. It did not prescribe what the terms of the lease should be.
And even if it had, that was no good reason for the department to embark upon
expenditure it did not want to incur. It is clear that the BAC succumbed to the
pressure of Ms Botha. The production of this letter was just an excuse for its
change of stance.

[85] In any event, this led in mid-November 2006 to the conclusion of the
written lease agreement between the sixth accused and the Department of Social
Services relating to the Summerdown Place property in Kuruman for a ten year
period at a rental escalation of 9.5%. Thereafter on 15 March 2007, Ms Botha
and Mr Scholtz signed an addendum to this lease in Kimberley which sought to
correct the amounts payable in respect of parking space on the schedule to the
main agreement. (I should mention that Mr Scholtz, in attempting to distance
himself from knowing how these leases had come about, stated that he had not
been in Kimberley from 2005 until after the death of Mr Breda in 2009. This
addendum gives the lie to this allegation, as it records he signed it in Kimberley
on behalf of the sixth accused). In this way in respect of both properties viewed
during the outing in which Mr Breda had gone with members of the physical
planning unit to visit Springbok and Kuruman, a Trifecta company ended up
securing a lease on better terms than what it had offered in the first place. And
again, Ms Botha played a vital part in ensuring that outcome.

The Keur en Geur Building, Douglas
[86] Ms Botha played a similar role with a similar result in respect of a lease
relating to the Keur en Geur Building, in Douglas. As appears from the
judgment of the court a quo, a full set of the procurement documents relating to
that lease could not be found. However, what can be established is that a lease
for office accommodation in Douglas for a period of three to five years was
invited in an advertisement and that, as a result of the directive from Ms Botha,
it was re-advertised under an erratum for a period described as ‘negotiable’.

[87] At the time there were no more than two State employees that were being
accommodated in Douglas, a social worker and her assistant. The initial need of
the Department of Social Services was assessed as being 205 m2 for a total of
nine single offices. In a memorandum dated 13 October 2006 prepared by Mr K
Ryland, (who was at one time an accused but against whom charges were
dropped) Ms Vosloo was informed that he had visited the premises with Mr
Breda who was willing to lease office accommodation of about 500 m2 to the
department, and recommended that the possibility of concluding such a lease be
assessed and considered. In a subsequent memo of 16 October 2006 addressed
to Ms Botha, it was stated that a bid had been advertised in three local
newspapers; that Mr Breda in his capacity as trustee of the Shosholoza Trust
had submitted a bid by the closing date of 29 September 2006; that offer was for
400 m2 (as opposed to the required 205 m2) at a monthly rental of R50 per m2
excluding VAT with an annual escalation of 9.5% for a period of ten years with
an option to renew for another five years.

[88] The minutes of a BEC meeting held on 17 October 2006 reflect that it
was recommended that Shosholoza Trust’s bid should be accepted on condition
that the lease be negotiated for 205 m2 for a period of five years, with an option
to renew for another five years, at a monthly rental of R40 per m2 excluding

VAT. These conditions were agreed by the BAC at its meeting the following
day. That committee also agreed to the proposed annual escalation of 9.5%.

[89] However, in an email sent to Mr Holele on 25 October 2006, Ms Vosloo
indicated that the building was 400 m2 in extent but that the Department of
Social Services only wanted some 200 m2 and could not pay for office space it
was not going to use. According to her, the Shosholoza Trust had said that it
could not subdivide the property and had therefore refused the department’s
offer. Ms Vosloo thus suggested the possibility of placing SASSA officials in
the building so that the department and SASSA would in effect share the lease.

[90] According to Ms Vosloo, she and Mr Saal were subsequently called by
Ms Botha to her office where she instructed them to accept the extra 200 m2 and
said that the additional space would be used for registry and board room
purposes. When testifying, Ms Botha agreed that she and Mr Holele had
approved the full 400 m2, with the additional 200 m2 that the department did not
require for office space to be used for a registry, a kitchenette, a store room and
a board room as, according to her, it made sense to have such facilities
available. She also said that it was a case of all or nothing as Trifecta (or more
properly the Shosholoza Trust) was offering 400 m2 and that the department had
to take the whole if they wanted to get the 205 m2 portion it wanted.

[91] Nothing seems to have happened about Ms Vosloo’s suggestion of
making portion of the building that had been offered available to SASSA. On
13 March 2007, however, the BEC reconsidered the bid and accepted
Shosholoza Trust’s offer of the whole 400 m2 of the building for a lease period
of five years at a monthly rental of R49 per m2 excluding VAT and an
escalation of 9.5% for the duration of the lease. Its explanation for doing so was
that Mr Saal of physical planning had indicated in writing that the department
would use the extra space. However, Ms Botha testified that she and the

department’s financial officer had discussed the matter and decided to take the
total area offered. Two days later, at its meeting on 15 March 2007, the BAC
accepted these recommendations.

[92] A written lease of the building including a rental schedule table from
1 August 2008 to 31 July 2013 was signed by Mr Breda on behalf of the
Shosholoza Trust and Ms Botha on behalf of the tenant, the latter having signed
on 15 January 2009. As set out below, the lease was later ceded to the second
accused. Once more, as a result of Ms Botha’s actions the Department of Social
Services ended up being bound with a Trifecta lease of premises it really did not
need, but at substantial cost to the department. Moreover, as was rightly found
by the court a quo, there was in fact no urgency to procure this lease if regard is
had to the lapse of time after the terms had been agreed until the lease was
signed. It is important to also point out that there were but two persons who
required accommodation in Douglas when the lease was negotiated and there
was still just two persons using the building four years later. Bearing all of this
in mind, the court a quo had ample justification when it said the following in
regard to this transaction:
‘On the basis of the largely common cause facts with regard to the procurement of this lease,
it can hardly be said that Ms Botha acted in the best interest of her department . . . the
department initially required 205 m2. It was saddled with 400 m2 . . . The 195 m2 difference
[calculated] at the rental escalation rate of 9.5% over the five year lease period . . . came
down to a total of R790 106.57.’

[93] In any event, in a letter dated 10 December 2008, approximately a month
before she signed the lease, Ms Botha informed Shosholoza Trust that the
Department of Social Services had no objection to the lease being ceded by the
trust to the second accused, Trifecta Investment Holdings (Pty) Ltd. When he
testified, the first accused explained that the cession had been necessary as
Mr Breda had signed an agreement of sale on behalf of Shosholoza Trust to
purchase the property in issue. The latter, however, could not pay for it, whilst

the second accused could arrange the finance. This illustrates what appears to
have been part of Mr Breda’s modus operandi: secure a lease with the
department and then acquire the property so leased with the financial assistance
of Mr Scholtz.

The fifth, sixth and a portion of the seventh floor of the Du Toitspan
building, Kimberley
[94] As had occurred in other instances, the process in respect of this property
commenced with Mr Saal, as Head of the Physical Planning Unit of the
Department of Social Services, directing a memorandum dated 14 September
2006 to Mr Holele relating to the dire need of office accommodation in
Kimberley. This he stated was due to the office accommodation then occupied
by the Department of Social Services not meeting its needs and as various units
of the department needed to be relocated. He stated that the Physical Planning
Unit had assessed the office space requirements of the department and that a
total of approximately 1 150 m2 was required in a building that had to be
accessible to disabled persons. He concluded by requesting approval for the
advertisement of office accommodation in the local newspapers in order to
secure a suitable office block for the department.

[95] Interestingly, although the memorandum was dated 14 September 2006, it
bears a date-stamp showing that it was only received on 16 October 2006, more
than a month later. In any event, this led to an advertisement for office
accommodation required by the Department of Social Services for a negotiable
period commencing December 2006 being advertised in both the Diamond
Fields Advertiser and Die Volksblad newspapers. It was not advertised in the
Government Tender Bulletin.

[96] In a bid made in response to this advertisement on 3 November 2006, the
fourth accused (Trifecta 434 Property 4 (Pty) Ltd) offered 1 150 m2 office space

in the Du Toitspan building, Kimberley at R65 per m2 per month excluding
VAT and shaded parking at R68 per parking per month excluding VAT, for a
minimum period of 60 months (five years) with an option to renew for a further
60 months. Interestingly, to the very square meter, the floor size contained in
this offer was that set out in the memorandum Mr Saal had sent to Mr Holele
dated 14 September 2006. One is left to wonder whether this was a mere
coincidence.

[97] A competing bid was received from a company known as Gallovents
Fifteen (Pty) Ltd, which alleged that it was a Northern Cape company but gave
a Beacon Bay, East London postal address and an East London telephone
number. In a memorandum directed to Ms Botha dated 14 November 2006 the
competing bids were scored and resulted in the fourth accused being allocated
94.66 points out of a hundred and Gallovents bid being scored at 88.59 points (it
had offered 1 642m2 of office space at R45,60 per m2 per month). The offered
recommendation was that the fourth accused’s offer of R65 per m2 per month
excluding VAT, basement parking of R68 per month excluding VAT, a lease
period of five years and an annual escalation of 8% with occupation being given
on 1 December 2006, be accepted. A material factor in favour of the fourth
accused was stated to be that the extent of office space it offered met the
department’s need of 1 150m2 whereas the competing bid offered a larger area.

[98] The fourth accused’s bid was endorsed and recommended, first by the
BEC on 17 November 2006 and, thereafter, by the BAC on 27 November 2006.
On 28 November 2006, Ms Botha as HOD approved these decisions.

[99] Despite these terms having been agreed upon, it appears as if no formal
lease agreement was signed at that stage. Some two months later, on 29 January
2007, Mr Saal addressed a memorandum to Ms Vosloo stating that it had since
been discovered that an extra 400 m2 of office space was required to

accommodate the intended officials that had to be relocated to the Du Toitspan
building. He recorded that negotiations had been held with ‘the proprietor of the
building to accommodate our needs’ following which it had been agreed that
‘the additional 400 m2 office space be allocated to the Department of Social
Services . . . but that only 200 m2 will be billed for, thus creating a saving of
R13 000 per month’. He therefore requested that an additional amount of
R13 000 (excluding VAT) per month for the extra 200 m2 was required as well
as one extra cleaner to clean the seventh floor, and that a lease agreement would
be concluded once permission was granted for the additional funds.

[100] Without being placed before either the BEC or the BAC for consideration
of the rental of this additional 400 m2 of floor space, a formal written agreement
was signed on 23 April 2007 by Mr Breda on behalf of the fourth accused and,
on 25 April 2007, by Ms Botha on behalf of the Department of Social Services.
It recorded the size of the rented premises at 1 656 m2 to be rented at R65 per
m2 per month (excluding VAT). How that size of the leased premises was
arrived at is not clear, bearing in mind that the initial agreement was for 1 150
m2 to which a further 400 m2 was agreed upon. This should have made it 1 550
m2 rather than 1 656 m2. Moreover the additional 400 m2 was only going to be
charged for on the basis that it was 200 m2 so the rental of 1 656 m2 at R65 per
m2 appears to be incorrect and too high.

[101] That is not the only difficulty. An annual escalation rate of 8% in regard
to rental had been approved by the BEC, the BAC and Ms Botha. No mention
was made of any change in the escalation rate in the memorandum of Mr Saal
of 29 January 2007 which recorded the further negotiations that had been held.
The formal lease relating to the increased area when prepared therefore recorded
an annual escalation of 8% but that appears to have been deleted and a figure of
9.5% inserted in longhand in its place. How this came about one does not know

(the record also contains a signed copy of the lease without this alteration.) The
court a quo justifiably commented on this as follows:
‘There is no justification why the additional 400 m2 was not subjected to an open tender
process. The argument that it was only practical and logical not to subject the additional
400 m2 to a competitive bidding process in view of the fact that Trifecta was already leasing
part of the property to the department is unpersuasive. The additional 400 m2 to Trifecta’s
initial 1 150 m2 comes down to 1 656 m2. Almost the size of the space (1 642 m2) that had
been offered by Gallovents. This stripped the tender process of an element of fairness which
requires the equal evaluation of tenders.’
That this latter comment was justified in particular by reason of the competing
bid of Gallovents having been disqualified in the first instance for offering
492 m2 more than Trifecta. The end result was that the latter ended up leasing
almost that space area to the department but at a substantially higher rental than
if Gallovents’s offer had been accepted.

The ninth, tenth and eleventh floors of the Du Toitspan building
[102] On 2 June 2008, a little over a year after the Du Toitspan lease had been
concluded, Mr Breda wrote to the HOD of Social Services (who was at the time
Ms Botha but the letter was marked for the attention of Mr Saal) referring to
negotiations in connection with the Du Toitspan building and stating:
‘In line with the request from your Department to amend the current lease on the facilities in
the Du Toitspan Building to include the following facilities, we reflect the amendment in this
offer to lease:

Description
Floor Area (m2)
Current Utilisation

Amended Utilisation
Floor 5
670.50 m2
670.50 m2
670.50 m2
Floor 6
259.00 m2
259.00 m2

Floor 9
807.28 m2

807.28 m2
Floor 10
807.28 m2

807.28 m2
Floor 11
807.28 m2

807.28 m2

To affect the amended request to reduce the floor area utilisation on floors 5 and 6, Trifecta
and the Department will amend the current lease agreement for floors 5 and 6, signed in
December 2006, to reflect the new requirement on these floors and will enter into a new lease
agreement for the additional requirement as set out in this offer.

As discussed with the Department of Social Services and Population Development (DSS &
PD) representatives, we confirm that the following rental parameters will be applicable for
floors 9, 10 and 11 of Du Toitspan building:

A.
Contracting information, responsibilities and conditions:
Premises:

Floors 9, 10 and 11 of Du Toitspan Building,

Kimberley
Floor size:

Approximately 2 421.84 square metres, final

measurements to be confirmed on occupation.
Rental per month:

R70-20 per square metre per month excluding

VAT.
Parking rental per month:
Undercover parking bays: R185-00 / parking bay per
month.
Initial lease period:
Minimum 120 months.
Option period:
60 Months after expiry of initial lease period.
Annual Escalation:
10% annually
Lease Commencement Date:
1 August 2008 (if lease is signed before 30 June 2008).’

[103] This letter appears to have set the ball rolling. On 12 June 2008, Mr Saal
indicated in a memorandum that the acquisition of new or additional office
accommodation would be inevitable as there were a number of vacancies which
had to be filled. He suggested that certain units be relocated to the external
office accommodation at the Du Toitspan building and that he had held a
discussion with the owner of the building who had told him that he had office
space available. He recommended that approval be granted to enter into a lease
agreement in respect of this office space.

[104] Ms Botha’s response was immediate. The same day, she and Mr Breda
signed an addendum to the previous lease to the effect that the portion of floor 7
presently being let would not be required once the department took occupation
of additional space on floors 9, 10 and 17. They also signed a separate lease
agreement relating to floors 9, 10 and 11, reflecting rental of R70.20 per square
metre per month for 2421.84 m2 (that being the total extent of the space to be let
on floors 9, 10 and 11 as reflected in Mr Breda’s letter of 2 June 2008) with an
escalation of 10% per annum for a period of eight years (from 1 August 2008 to
31 July 2016), and an option to renew for five years.

[105] In this way the fourth accused came to lease another portion of the same
building, but at a substantially higher rental and a higher escalation rate and for
a substantially longer period than the lease it had in respect of the other portions
of the building. And all of this was done in great haste, without any of the
procurement processes prescribed by the statutory matrix already mentioned
having been followed, and with substantial financial consequences to the
department. The rental for the additional floors as set out in the schedule to the
lease amounted to R193 815.01 per month with effect from 1 August 2008,
increasing to R377 690.63 per month by 1 August 2015.

[106] The day after this lease and addendum were signed, Mr Holele addressed
a letter to the Head of the Department of Social Services (farcically that was
Ms Botha, the person who had signed the lease and addendum) to attempt to
justify the deviation from normal procedures, stating:
‘1.
The Department is under severe pressure to obtain additional office accommodation
due to the population of the organogram – with specific reference to the Social
Welfare Services’ Programme.
2.
In 2006 the market for office accommodation was tested under Bid
NC/SOC/0020/2006. Only two (2) prescribed by the Procurement Policy Framework
Act 05 of 2000.

3.
The Department successfully negotiated leasing of office accommodation on floors 9,
10 & 11 in addition to floors 5 & 6, Du Toitspan Building.
4.
It would be in the best interest of the Department to enter into a separate lease
agreement for floors 9, 10 & 11 as the rental per m2 differs from that of floors 5 & 6:
 Floors 9, 10 & 11: R80.03 / m2 (incl. VAT)
 Floors 5 & 6: R74.10 / m2 (incl. VAT)
5.
It is therefore recommended that the appended addendum to agreement of lease as
well as the lease agreement between Trifecta Trading 434 Property 4 (Pty) Ltd be
signed.’

[107]  The reasoning set out in this letter is insupportable for various reasons.
First, the fact that the market may have been tested two years previously, and
generated but two bids of which the fourth accused’s was accepted, did not
mean that any bid for any other portion of the building made by the fourth
accused would necessarily be the best course for the department to follow.
Circumstances may well have changed and, without going through the normal
bid procedures, the existence of alternative or more desirable accommodation
would not be established. In this respect, there is no suggestion, nor could there
be, that Trifecta was necessarily the sole provider of office accommodation in
Kimberley, particularly in the light of the earlier bid of Gallovents.

[108] Second, concluding a lease in this way also flew in the face of clause 24
of the SCM Policy in that account was taken of an unsolicited bid outside a
normal bidding process – which even if it was to be considered, required the
BAC to consider it and make a recommendation only after taking into account
comments submitted by the public and after obtaining written input from the
Provincial SCM.

[109] Third, there can be no suggestion of extreme urgency justifying a
deviation from the official acquisition process as required by the provincial
SCM Policy (as referred to in paragraph 19 of this judgment). Ms Botha

testified that there was an urgent need to require the office space because posts
had been advertised, appointments had to be made, there was a lack of office
space and the department needed more floors in the same building. That may
have been the case, but that falls short of the extreme urgency the existence of
which is required before the prescribed procedures may justifiably not be
followed. And Mr Holele, while conceding the existence for the need of office
space, when pressed in cross-examination was not prepared to concede that such
need was urgent. Thus while accepting that there was a need the evidence did
not establish an urgency so extreme as to justify the Treasury Regulations and
the SCMA Policy being ignored.

[110] In these circumstances there was no justification for a departure from the
normal procedures, and the letter Mr Holele quoted above was clearly nothing
more than a blatant ex post facto attempt to justify the unjustifiable, addressed
as it was to the person who had already signed the lease agreement. It seems to
me to be clear that Messrs Breda, Holele and Saal, together with Ms Botha, just
took it upon themselves to re-organise the lease of the building as if they were
not bound by any restrictions or procedures. This resulted in the department
becoming obliged to make substantial rental payments on a monthly basis
without the safeguards of the SCM Policy being met – payments that operated
to the financial benefit of members of the Trifecta group.

Matters arising out of these leases
[111] As appears from what I have set out above, the modus operandi of
Mr Breda in securing these leases appears in the main to have been this: in line
with Mr Scholtz’s vision of acquiring and refurbishing largely run-down
buildings in order to lease them to provincial government departments, he
would identify a property which might be suitable to be converted into office

accommodation; he would then introduce such property to the provincial
government, mostly before the formality of an advertisement calling for bids for
accommodation having been published; he would then negotiate the terms of
the lease for such property; in the event of such negotiations being successful
and a lease either having been concluded or  likely to be agreed, he would then
acquire the property using one of the Trifecta group of companies or, on one
occasion, his own private trust which later ceded the lease to a Trifecta
company. Any person able to assist this business scheme would obviously be of
significant advantage to the Trifecta group and those who benefitted through it.

[112]  As appears from the history set out above, the conclusion of these leases
was riddled with irregularities. Indeed, the Treasury Regulations and the rules
of the SCM Policy were honoured more in their breach than in their observance.
Inter alia, and without intending to be exhaustive:
(a)
In respect of not one of the leases was a bid advertised in the Government
Tender Bulletin for a minimum period of 21 days before closure as required by
Treasury reg 16A6.3(c) and clause 9(iii) of the SCM Policy. In the instances of
the leases of the Springbok, Kuruman and Du Toitspan buildings, tenders were
advertised for less than that period and only in local newspapers.
(b)
The NCTC building and the Kimberlite Hotel leases were concluded
without any SCM protocols being observed: this to the knowledge of both the
MEC’s of the respective departments that took occupation of the properties,
Mr Esau and Ms Joemat-Pettersson, and despite Mr Crouch’s so called ‘comfort
letters’ to the contrary effect written by him on the instruction of his HOD,
Mr Selemela – which must be construed as a clear attempt at a cover-up.
(c)
Unsolicited bids were entertained in breach of the SCM Policy, not only
in respect of the NCTC Building and Kimberlite Hotel as already mentioned,
but also in respect of the Oranje Hotel, Upington and the ninth, tenth and
eleventh floors of the Du Toitspan building, Kimberley.

(d)
In a similar vein, in respect of the leases of 14 Riebeeck Street, Springbok
and Summerdown Place, Kuruman, although the department did advertise for
bids for office accommodation in Springbok and Kuruman, it did so only after
members of its Physical Unit had visited those centres with Mr Breda and being
shown the buildings which were later leased. In these cases, too, Mr Breda’s
approach must effectively be construed as being an unsolicited bid in respect of
each property rather than one solicited by a bid advertisement.
(e)
In respect of the Springbok lease, the BEC did not sit to evaluate tenders.
Only once the lease was awarded was it approached to ratify it.
(f)
Similarly, the unsolicited bid in respect of the Oranje Hotel in Upington
resulted in Ms Botha signing a lease before its terms had been discussed and
accepted by the provincial Tender Board, as was required until 30 June 2006.
As already mentioned, she was unable to give a coherent explanation as to why
she had done so.
(g)
What is truly alarming is that Ms Potgieter, who was at the time the
Director, Provincial Asset Management in the Provincial Treasury of the
Northern Cape, testified that there was nothing unusual in a HOD signing a
lease contract for accommodation without it having passed through the SCM
Policy procedures which was later ratified by the Tender Board, particularly in
cases of urgency and emergency. Also disturbing is that despite the terms of the
SCM Policy and Treasury Regulations, she testified further that it was not the
practice at the time to advertise in the Government Tender Bulletin before
procuring services, save for tenders in excess of R40 million – this apparently in
an effort to encourage BEE procurement. Fortunately, she stated that in terms of
a practice introduced in 2011, tenders in contracts above R500 000 had been
advertised in the Government Tender Bulletin.
(h)
It is also necessary to comment on the evidence by Mr Selemela who,
from 2004, was the HOD of the Department of Public Works in the Northern
Cape Province. Called by the ninth accused Mr Block, he testified that during
his ten year period as HOD of the Department of Public Works, no tender

processes were followed nor tenders invited in procurement of office
accommodation
and
that,
rather,
the
department
requiring
office
accommodation would seek out an appropriate building then negotiate with the
owner. Mr Crouch would then give advice in regard to the norms and standards
in respect of the category of employees to be accommodated and the extent of
the spaces they required. If this was in fact the true state of affairs, it shows a
deplorable neglect of prescribed constitutional and statutory procedures. The
court a quo found his evidence in this regard to be ‘disquieting’ and flew in the
face of the province’s procuring procedures. It went on to find Mr Selemela to
have been a poor and unreliable witness ‘whose evidence became debased when
he intimated that he could not recall if the tender process had not been
followed’. One is left with the distinct impression that he set out to denigrate
Mr Crouch, an important State witness, and to try to minimise the defects in the
procedures to which his political cronies had been parties.

The failure to recuse
[113] Before dealing with the merits of the convictions, it is necessary to deal
with an in limine argument that this appeal should be allowed as the learned
judge in the court a quo ought to have recused herself after she had failed to
discharge the accused at the end of the State’s case. At that stage of the
proceedings the accused applied for the discharge on all counts in terms of the
provisions of s 174 of the Criminal Procedure Act 51 of 1977 which provides
that if ‘the court is of the opinion that there is no evidence that the accused
committed the offence referred to in the charge or any offence of which he may
be convicted on the charge, it may return a verdict of not guilty’.

[114] As appears from what follows in this judgment, the accused were not
convicted on any of the charges of fraud which were laid against them and, as
already mentioned, the State has conceded that the charges of money laundering
cannot be sustained. On the other hand, there clearly was evidence

incriminating the accused on the charges of corruption levied against them.
Their contention, both in the court a quo and in this Court, that they were
entitled to a discharge on all counts cannot be entertained.

[115] However, in refusing the application for a discharge under s 174, the
court a quo observed as follows:
‘There is a common thread that runs through the charges which can be gleaned from the
evidence presented by the State. There is also a synergy which can be gathered from the
accused’s plea explanations, the line of cross-examination by the defence counsel and their
argument in respect of this application which points to some collaborative effort and scheme
amongst the accused not to incriminate each other. This is a factor which I permissibly take
into account.’
Arising from this, but before the defence case commenced, all the accused
applied by way of notice of motion supported by a founding affidavit deposed
to by the first accused for the learned judge to recuse herself. It was alleged that
her ruling created a perception of bias on her part. This argument was dismissed
by the court a quo but repeated again in this Court.

[116] The essence of the appellants’ argument was that the trial court had made
a final decision that there had been a synergy in collaborative effort in the
conduct of their defence which, taken together with her refusal to discharge
them on various charges in respect of which the State had conceded it had not
proved its case, created a reasonable apprehension of bias on her part.

[117] In my view there is no merit in this argument. For there to be a reasonable
perception of bias, a proper factual basis must be laid – see President of the
Republic of South Africa & others v South African Rugby Football Union &
others 1999 (4) SA 147 (CC) paras 45 and 48. In my view, no such basis was
established. Although collaboration between the defence was mentioned, it is
clear from the judgment on the discharge application that no final decision in
that regard had been made. Furthermore, the court a quo was not bound by the

concession of counsel for the State in regard to the guilt or otherwise or the
accused in regard to any of the charges laid against him. And in hearing an
application for a discharge, a court is called upon to exercise its discretion. That
is what it did. So even if this Court, on reflection and with the benefit of the
entire record, is of the view it would have exercised its discretion differently,
that is no reason to hold that a failure to have done so automatically resulted in a
reasonable perception of bias.

[118] Accordingly, in the present case, although the reasoning of the court a
quo in regard to the refusal of the application may have lacked cogency in
certain respects, the necessary factual basis upon which reasonable persons,
objectively applying themselves to the facts, would have formed a reasonable
apprehension of bias, was not established. The court a quo correctly rejected the
application for recusal.

The offence of corruption
[119] At common law, it is a crime for a person to offer or give to an official of
the State, or for any such official to receive from any person, an unauthorised
consideration in respect of such official doing, or abstaining from, or having
done or abstain from, any act and exercise of his or her official capacity. Thus
in R v Chorle 1945 AD 487, in which the common law in regard to the offence
was discussed, the appellant had given money to a municipal official to induce
him to use his influence to expedite the issuing of a building permit. This Court
held that he had committed the common law offence of bribery. The learned
judge went on:
‘The law of bribery is designed to protect the State against those who by gifts tempt its
officials to use their opportunities as such to further private interests in State affairs and there
is no reason why the law, which in its original form was wide enough to secure that
protection, should, by restrictive interpretation, be cut down to something less than is
necessary to achieve its object.’

[120] As was pointed out by this Court in S v Shaik & others 2007 (1) SACR
247 (SCA) para 71, s 2(b) of the Prevention of Corruption Act 4 of 1918
extended the crime of bribery from employers of the State to agents who by
definition included, amongst others, employees in general. That Act was
replaced by the Prevention of Corruption Act 6 of 1958 (the 1958 Act), s 2(b) of
which provided that any person who ‘corruptly gives or agrees to give or offers
any gift or consideration to any agent as an inducement or reward for doing or
forbearing to do or for having done or forborne to do any act in relation to his
principal’s affairs or business’ was guilty of an offence.

[121] The Corruption Act 94 of 1992 (the Corruption Act) repealed both the
1958 Act as well as the common law offence of bribery. It did away with the
requirement that the relevant penalised act had to relate to the affairs of a
principal and replaced it with a requirement that it had to relate to the powers
and duties of the person sought to be influenced by the giving or offering or
paying of a benefit.3

[122] The Corruption Act, in turn, was repealed by the PCCA Act. Section 3 of
the latter contains the formulation of a general crime of corruption while s 4,
which is of similar connotation, provides specific provisions in respect of
corruption relating to public officers. Section 3 reads as follows (the reader is
advised to take a deep breath):
‘3. Any person who, directly or indirectly –
(a)
accepts or agrees or offers to accept any gratification from any other person, whether
for the benefit of himself or herself or for the benefit of another person; or

(b)
gives or agrees or offers to give to any other person any gratification, whether for the
benefit of that other person or for the benefit of another person,
in order to act, personally or by influencing another person so to act, in a manner –

(i)
that amounts to the –

3 Shaik para 73.

(aa)
illegal, dishonest, unauthorised, incomplete, or biased; or

(bb)
misuse or selling of information or material acquired in the course of
the,

exercise, carrying out or performance of any powers, duties or functions arising out of
a constitutional, statutory, contractual or any other legal obligation;

(ii)
that amounts to –

(aa)
the abuse of a position of authority;

(bb)
a breach of trust; or

(cc)
the violation of a legal duty or a set of rules,

(iii)
designed to achieve an unjustified result; or

(iv)
that amounts to any other unauthorised or improper inducement to do or not to

do anything,
is guilty of the offence of corruption.’

[123] As the learned author Prof Snyman points out, if this lengthy definition is
stripped of conjunctive words or phrases, it is possible to abbreviate it to read as
follows:
‘Anybody who
(a)
accepts any gratification from anybody else, or
(b)
gives any gratification to anybody else
in order to influence the receiver to conduct herself in a way which amounts to the unlawful
exercise of any duties, commits corruption.’4
It must be immediately recorded that ‘gratification’ is a word of wide
connotation. Its definition in s 1 of the PCCA Act includes money, a gift, a loan,
an interest in property, any favour or advantage of any description, and any real
or pretended aid or influence (the list goes on and on).5

4 C R Snyman Criminal Law 6 ed 2014 at 403.
5 The definition is as follows:
‘gratification’, includes –
(a)
money, whether in cash or otherwise;
(b)
any donation, gift, loan, fee, reward, valuable security, property or interest in property of any
description, whether movable or immovable, or any other similar advantage;
(c)
the avoidance of a loss, liability, penalty, forfeiture, punishment or other disadvantage;
(d)
any office, status, honour, employment, contract of employment or services, any agreement to give
employment or render services in any capacity and residential or holiday accommodation;

[124] It is not necessary to repeat the full terms of s 4 of the PCCA Act and the
offence it creates of corruption relating to a public officer. Although its
provisions are fuller than those of s 3, conceptually they are the same. What is
of relevance is that in each section both the giver of the gratification and its
receiver, commit the crime. Corruption by the recipient is set out in subsecs 3(a)
and 4(a) while corruption committed by the giver of the inducement is set out in
subsecs 3(b) and 4(b). The one is in effect a mirror image of the other.

[125] Prof Snyman gives the following comparison between the crimes in the
2004 Act and those in the 1992 Act:6
‘If one compares the definition of the crime in the 2004 Act with that in the 1992 Act, it is
clear that the provisions of the 2004 Act is applicable only to cases in which X gives a
gratification or benefit to Y (or Y accepts it from X) in order to persuade Y to act in a certain
way in the future. In terms of the rules relating to bribery and corruption which applied
before 2004, the crime could also be committed if X gives a gratification or benefit to Y (or
Y accepts it from X) in order to compensate Y (or as a quid pro quo), for something which Y
had already done in the past. In this respect the definition in the 2004 Act is narrower than
that in the 1992 Act. It is surprising that the giving or acceptance of a gratification as
compensation for something which the receiver has already done in the past, is not
incorporated in the definition in the 1994 Act, since this rule has formed part of the crime for
centuries. It formed part of the Placaat of the States General of the United Netherlands of

(e)
any payment, release, discharge or liquidation of any loan, obligation or other liability, whether in
whole or in part;
(f)
any forbearance to demand any money or money’s worth or valuable thing;
(g)
any other service or favour or advantage of any description, including protection from any penalty or
disability incurred or apprehended or from any action or proceedings of a disciplinary, civil or criminal
nature, whether or not already instituted, and includes the exercise or the forbearance from the exercise
of any right or any official power or duty;
(h)
any right or privilege;
(i)
any real or pretended aid, vote, consent, influence or abstention from voting; or
(j)
any valuable consideration or benefit of any kind, including any discount, commission, rebate, bonus,
deduction or percentage.’

6 C R Snyman Criminal Law 5 ed (2008) at 410-411.

1651 – a document which is among the most important sources of the common-law crime of
bribery. Thus, if X has passed her practical examination for a driver’s licence and has
received her licence, and only thereafter gives the official who gave her the pass mark R500
for awarding her the pass mark, she does not commit corruption in terms of the 2004 Act. In
terms of the 1992 Act she would have committed the crime.’ (Footnotes omitted.)

[126] Prof J R L Milton in his seminal work South African Criminal Law and
Procedure Vol 3 (Statutory Offences – Binder 1) at D3-5 expressed a similar
view. He stated:
‘Writers have stated that the 2004 Act suffers by comparison with its “commendably brief”
predecessor, given its prolix and complex definitions, and the large measure of repetition in
the Act. Of greater concern is that the Act, the purpose of which is to strengthen measures to
prevent and combat corruption, actually has a narrower definition of corruption than the
definition applied in the 1992 Act, in that it punishes those instances where gratification is
given in order to bring about a particular action in the future, and does not apply to
compensation for an action brought about in the past. Prior to the inception of the Act,
whether under the 1958 Act in association with the common law crime of bribery, or whether
in terms of the 1992 Act, both these forms of corruption were(?) subject to criminal sanction.
The lacuna is obviously contradictory to the aims and purposes of the 2004 Act. Given that
the Act, which has been enacted to strengthen and not weaken the fight against corrupt
activity, has omitted an entire category of conduct previously held to be unlawful, could it not
be argued, in the light of the above reasoning relating to Section 12(2)(a) of the Interpretation
Act, that it was indeed the intention of the legislature to revive the common-law crime of
bribery when it repealed the 1992 Act? In this way the law at least extends the corrupt
compensation for past deeds in respect of state officials, whereas the alternative interpretation
simply means that the new legal regime seeking to counteract corruption is more narrowly
defined, and thus weaker, than in the past.’

[127] Whether the PCCA Act in its repeal of the Corruption Act has revived the
common law crime of bribery, is a thought provoking question.7 But it is of
academic interest only in the present case as none of those accused charged with
corruption under the PCCA Act were charged in the alternative with common

7 See further J Burchell Principles of Criminal Law 4 ed at 782.

law bribery. Thus even if entitled to an acquittal on the corruption charges, they
could not in the alternative be convicted of common law bribery, even if that
offence is to be regarded as revived. Hopefully the Executive, which daily
expounds the necessity of fighting corruption, will take heed of the concern
expressed by these learned authors that the Corruption Act has in fact weakened
the fight against corrupt activities, a result that was probably not intended.

[128] The views of Professors Milton and Snyman were drawn to the attention
of the court a quo, which responded in its judgment as follows:
‘I am of the view that the prevention and combating of corruption and corrupt activities will
be rendered meaningless if the Act was interpreted to narrowly regulate conduct where a
gratification or benefit is given or offered by a donor to the recipient in order to persuade the
recipient to act in a certain way only in the future. This could not have been the intention of
the legislature having regard to the purpose of the Act, its preamble and the manner in which
this offence has been dealt with in the past by our Courts. On the whole I am of the view that
the giving or acceptance of a gratification as compensation for something which the receiver
has already done in the past should be read as forming part of the modern day offence of
corruption as set out in ss 3 and 4 of the Act. If not miscreants could simply conspire to
deliver or transfer the gratification subsequent to the unlawful deed and thereby render a
portion of ss 3 and 4 of the Act nugatory.’

[129] I have difficulty with this analysis. The court a quo’s professed difficulty
with accepting that the section restricted liability to instances where the
gratification was offered in order to persuade the recipient to act in a certain
way in the future appears to be premised upon its view that if that were so,
miscreants could avoid criminal liability by simply arranging for the
gratification to be paid or delivered after the event. But it seems to me to be
clear that offenders could not avail themselves of this simple ruse to avoid
criminal liability. As is set out in both s 3(a) and (b) the offence is committed
when a person either accepts or gives the gratification or when such person
‘agrees or offers to’ accept or give the gratification. Thus the offence is

committed on agreement to give or even on merely offering to give the
gratification. The sections in their normal connotation therefore envisage that a
person who undertakes to act in a way which constitutes corruption commits the
offence, even if the promised gratification is only forthcoming after the event.

[130] It also seems to me to be clear that agreement between a corruptor and
corruptee on precisely what actions is required for any gratification to be given
need not be reached, and a general common understanding suffices. Thus in S v
Selebi 2012 (1) SACR 209 (SCA) the appellant, who at the relevant time had
been the head of the national police service had received payments from
Mr Glenn Agliotti.8 This Court found that when Mr Agliotti had made such
payments, the appellant had known they were intended to induce him as the
head of the national police to afford Mr Agliotti some favour in one way or
another and that this was sufficient for purposes of the offence.9 It also held that
the appellant must have realised that the generosity and payments he had
received had created a dynamic whereby he, in his post, would be indebted to
Mr Agliotti and would have to remain willing to do him favours in the future,
and this constituted corruption as envisaged under s 4 of the PCCA, irrespective
of whether any quid pro quo was in fact given (although it found that
gratification had in fact been given).

[131] It seems to me then that where one party does a ‘favour’ amounting to the
unlawful exercise of any duties on behalf of the other, on the understanding that
a gratification of some sort as defined will be forthcoming in due course, it is
neither necessary for the nature or amount of that gratification to be specifically
agreed, nor for it to have been given, before the crime of corruption is
committed.

8 Selebi para 112.
9 Selebi para 41.

Count 15
[132] In the light of the above, I turn to consider the convictions of the
appellants. For convenience I intend to deal at the outset with the convictions of
the ninth and tenth accused, Mr Block and his company Chisane Investment, on
count 15, a charge of corruption in alleged contravention of s 3(a) of the PCCA
Act. In paragraph 152 of the charge sheet it was alleged they were guilty of that
offence:
‘152. IN THAT during the period between March 2006 and April 2008 and at or near
Kimberley in the regional division of Northern Cape and within the area of jurisdiction of this
Honourable Court, the Accused, did directly or indirectly accept or agree or offer to accept
any gratification from Accused 1 and or Accused 2 and or Accused 3 and or the late Mr Sarel
Breda to wit, the following payments;
152.1 R 228 000,00 (paid to Accused 10 on 07 March 2006);
152.2 R 500 000,00 (paid to Accused 9 on 26 April 2006);
152.3 R 338 521,25 (paid to Duncan and Rothman Attorneys for the benefit of Accused 9 on
20 August 2007);
152.4 R 298 151,95 (paid to Accused 9 between 30 October 2007 to 29 April 2008);
153.
Accused 9 also received the following gratification from the aforesaid Accused and or
the late Mr Sarel Breda;
153.1 He received 25 Ordinary Shares in Trifecta Resources and Exploration (Pty) Ltd (on
08 September 2006) which is a subsidiary of Accused 2 and or Accused 3;
153.2  His guest house situated at 382 and 383 Shimane Street, Upington, was renovated to
the amount of R346 919,74.
154.
Accused 9 received the aforementioned gratifications for the benefit of himself and
Accused 10 in order for Accused 9 to personally act or by influencing another person,
to wit Mr Crouch, so to act in a manner-
(i)
That amounts to the –
(aa)
illegal, dishonest, unauthorised or biased exercise, carrying out or performance of any
powers, duties or functions arising out of a contractual or any other legal obligation;
(ii)
That amounts to –
(aa)
the abuse of a position of authority; or
(bb)
a breach of trust; or
(cc)
the violation of a legal duty or a set of rules;
(iii)
designed to achieve an unjustified result; or

(iv)
that amounts to any other unauthorised or improper inducement to do or not to do
anything,
155.
to wit, that Accused 9 influenced and or instructed Mr Ebrahim Crouch to act in a
manner that would ensure that the Department enters into a Lease Agreement with the
Trifecta Group of companies and or with Mr Breda in respect of the Kimberlite Hotel
building and The Northern Cape Training Centre building; and or
156.  that Mr Ebrahim Crouch acts in a manner that would ensure that the prescribed
procurement processes of the Department are circumvented or that Mr Crouch
influences the Departmental employees not to adhere to the prescribed procurement
processes when procuring Kimberlite Hotel building and The Northern Cape Training
Centre building for office space as aforesaid.’

[133] As appears from its terms, this charge relates solely to the department’s
leases of the Kimberlite Hotel and the NCTC building concluded in late 2005. It
is clear from the circumstances that Mr Breda must have identified those
buildings, which were owned by third parties at the time, as being run down but
capable of being renovated and hired to government departments or entities;
that he therefore approached Mr Block to use his influence to assist in procuring
leases; and that as a result Mr Block phoned Mr Crouch and told him to help
Mr Breda who was coming to see him. That this influenced Mr Crouch and the
conclusion of the leases, is clear.  It was on the strength of his introduction that
Mr Breda made contact with Mr Crouch and despite the latter’s protestations
that due protocol had to be followed, events were set in train which led to the
buildings being viewed and the leases being signed without the prescribed
tender processes having been followed or the Tender Board’s permission being
obtained.

[134] Mr Block was not called to testify in his own defence, and as a result the
court a quo, correctly in my view, accepted Mr Crouch’s description of the
telephone calls that had taken place between the two of them. Counsel for
Mr Block, relying on the content of the Premier’s letter of 12 July 2005 (quoted

in full in para 32 of this judgment) – in which it is stated that para 13.2.4 of the
Treasury regulations was amended to read that the accounting officer of an
institution (in these cases the HODs) may enter into leases of this nature
‘without any limitations’ – fell back on an argument that this meant that no
protocols or SMC procedures had to be followed before the HOD’s of the
relevant departments signed the leases of the Kimberlite Hotel or the NCTC
building, and thus there had been no irregularities in respect of these leases.

[135] Regulation 13.2 of the Treasury Regulations provides as follows:
‘13.2 Lease transactions
13.2.1 For the purpose of this regulation, a lease is an agreement whereby the lessor conveys
to the lessee in return for a payment or a series of payments the right to use an asset for an
agreed period of time.
13.2.2 A lease is classified as a finance lease if it transfers substantially all the risks and
rewards incidental to ownership of an asset. Title may or may not eventually be transferred.
13.2.3 An operating lease is a lease other than a finance lease.
13.2.4 The accounting officer of an institution may, for the purposes of conducting the
institution’s business, enter into lease transactions without any limitations provided that
such transactions are limited to operating lease transactions.
13.2.5 With the exception of agreements concluded in terms of Treasury Regulation 16, the
accounting officer of an institution may not enter into finance lease transactions.’

[136] The leases in question were clearly ‘operating’ leases as envisaged by this
regulation, but the argument that by reason of reg 13.2.4 it was unnecessary for
HOD’s to comply with SMC procedures as they were empowered to enter into
such leases ‘without limitation’ cannot be sustained. The regulation must be
interpreted in context of the regulations as a whole, which make it abundantly
clear that the SMC procedures are to apply to all departments relating to the
acquisition of goods and services, be fair, equitable, transparent, competitive
and cost effective and comply with the relevant legislation – see reg 16A. To
argue that this one clause in a regulation essentially renders all these regulations
nugatory has no foundation. To hold otherwise would give rise to the absurdity

that the requirements of the Constitution and the PFMA, relating to the
establishment and functioning of the SCM detailed in paragraphs 15 to 23 of
this judgment, could be ignored.  Regulations cannot override the founding
legislation under which they were made.

[137] Moreover, in the National Treasury’s Practice Note SCM 2 of 2005 dated
10 May 2005, which applies ‘to all national and provincial departments,
constitutional institutions and public entities’, provision is made for threshold
values when procuring goods or services, hiring or letting anything, acquiring or
granting any right or disposing of State property. In clause 4, it is specifically
stated that accounting officers should invite competitive bids for all
procurements above R200 000, and that competitive bids should be advertised
in at least the Government Tender Bulletin and in other appropriate media.

[138] It is unnecessary for present purposes to determine the precise meaning of
the words ‘without limitation’ used in reg 13.2.4. In my view, it was probably
intended to connote that HOD’s were not bound to a limitation in respect of the
rental to be paid, but clearly it cannot be construed as providing an
abandonment of the SCM procedures to be followed in procuring a lease.
Regulation 13.2.4 certainly cannot be construed as providing a free hand to
every HOD to contract as he or she wished without following any procurement
protocols or applicable SCM policy. Nor does it appear ever to have been
regarded in that light by the provincial government officials involved in
procurement. That this is so is also borne out by the fact that SCM schemes
were followed in most of the other leases which form the basis of the charges in
this matter and, significantly, Mr Crouch’s HOD ordered him to issue a
declaration that all protocols had been observed in respect of these particular
leases despite knowing the contrary was true. This was on obvious attempt to
cover up which would hardly have been necessary if it was thought there were
no such protocols applicable.

[139] There can thus be no doubt that the HOD’s could not conclude leases
with gay abandon without complying with SCM protocols nor that the leases of
the Kimberlite Hotel and the NCTC building were concluded irregularly and in
breach of the requirements of the SCM policy, which at that time required a fair,
open and competitive process, advertisement for bids in the Government Tender
Bulletin, and the approval of the Tender Board. The argument that the leases
had not been irregularly concluded as the SCM procedures did not apply in their
instances, borders on the spurious.

[140] I turn to deal with the question of gratification. It was common cause as a
result of the plea explanation that the amounts referred to in paras 15.1-15.4 of
the charge sheet ‘were in fact paid and received’. However, in respect of the
sum of R228 000 paid to the tenth accused, Chisane Investment in March 2006,
the plea explanation proffered was that the amount was paid for ‘consultancy
services’ rendered by accused 9 ‘in his capacity as the Director and a
shareholder of Chisane Investment’ to the Shosholoza Trust at the request of Mr
Breda. And in respect of the sum of R500 000 paid to him on 26 April 2006, Mr
Block’s plea explanation was that he was paid the sum from a company of Mr
Breda, Data Force Trading 53 (Pty) Ltd, also ‘in respect of assistance provided
in the management of business affairs in the Northern Cape, as well as other
business areas outside Northern Cape where Mr Breda had interests’.

[141] The sole suggestion is, then, that these payments were due to Mr Block
for having rendered ‘consultancy services’ (that the most vague and imprecise
definition of work rendered) or for providing business ‘assistance’ (an equally
amorphous description of what he had allegedly done) to justify these large
amounts being paid to him. Had Mr Block in fact performed work or rendered
services justifying those payments, it would have been a simple matter for him
to have both explained what he had done in his plea explanation and then

entered the witness box and testified. For reasons best known to himself, he
failed to do so. No one, not even Mr Scholtz, was able to explain the underlying
causa of these amounts being paid. In the light of Mr Block’s own plea
explanation that he was unemployed at the time, and the fact that all he appears
to have done in regard to Mr Breda or his companies was to introduce Mr Breda
to Mr Crouch and then put pressure for leases to be concluded, I am driven to
the inevitable conclusion that the payments were made as a quid pro quo for his
doing so due to a prior agreement or understanding.

[142] It was argued, however, that these amounts were paid several months
after the conclusion of the leases, so that no inference in linking them to the
conclusion of those leases could be drawn. I do not agree. The leases were
concluded by the third accused, an entity which required financial assistance in
order to purchase the properties. Put simply, the third accused appears simply to
have lacked the funds to immediately make such substantial payments.
However, the two properties it had leased generated substantial incomes: the
NCTC Building generated R108 000 per month with effect from 1 January 2006
and the Kimberlite Hotel R171 000 per month with effect from April 2006. The
amounts of R228 000 and R500 000 paid in March and April 2006 were paid
once the properties concerned had become income producing. There was
therefore no substantial delay as was argued. Without Mr Block giving any
explanation, the inference made by the court a quo that these substantial
amounts were paid due to his involvement in the leases being procured was
correctly drawn.
[143] Mr Block was at the time the Provincial chair of the ANC, and a man of
considerable political influence. It was through his introduction that the two
properties at the heart of this charge became known to the Department of Public
Works and it was his influence which helped overcome Mr Crouch’s resistance
to the normal processes not being followed. But strictly speaking, it matters not
whether his influence in fact led to the leases being signed. The offence of

corruption would have been committed if Mr Block undertook to use his
political influence in an attempt to influence the department to conclude the
leases and subsequently accepted a gratification for doing so.10

[144] And that is precisely what Mr Block did. There is no suggestion on the
evidence that he had any other aims when he introduced Mr Breda to
Mr Crouch and pressed him to assist Mr Breda in concluding the lease
agreements The inference is therefore irresistible that these actions were the
‘consultancy services’ for which he was paid. He is clearly guilty of corruption
relating to the amounts of R228 000 and R500 000 referred to in clauses 152.2
and 152.3 of the charge sheet, and to that extent was correctly convicted on
count 15.

[145] But does his guilt on that count extend to the further gratifications he
received as set out in the remaining sub-clauses of 152 and clause 153? In this
regard, there seems to me to be no doubt that there was a ‘generally corrupt
relationship’ – a somewhat notorious but apt description – which developed
between Mr Block, on the one hand, and Mr Breda and his Trifecta companies,
on the other. That Mr Block was prepared to use his political clout to advance
Mr Breda’s business interests, bears no doubt. It is borne out not only by the
circumstances under which the Kimberlite Hotel and NCTC building leases
were concluded, but also his intervention on behalf of  Mr Breda in regard to the
Oranje Hotel in Upington when he threatened Mr Crouch to hurry up or else he
could personally come and do the work himself. It is also confirmed by the
further payments which are the subject of this charge.

[146] It is common cause that an amount of R338 521.25 was paid to attorneys
in respect of legal fees (he said in his plea explanation Mr Breda had agreed
with Mr Scholtz to loan that sum to him); that between October 2007 and April

10 See further Snyman fn 5 at 411.

2008 he had been paid the sum of R298 151.95 (in his plea explanation he
stated this had been forthcoming from the Trifecta group as salary for services
rendered to Trifecta Resources and Exploration (Pty) Ltd); that he had been
given 25% of the issued ordinary shares of the latter company (Mr Breda and
Mr Scholtz held the remaining shares); and that his guesthouse in Upington was
renovated by a building contractor employed by the Trifecta group.

[147] Importantly, Trifecta Resources and Exploration, of which Mr Block had
been given a 25% share, never traded or exploited any mining activities. To
suggest that Mr Block was entitled to a salary for services rendered to a dormant
company borders on the ridiculous. If there was an innocent explanation, why
did Mr Block not testify to give it? The inference is clear that he had no such
explanation.

[148] In regard to the improvements to the guesthouse, the evidence is in
certain respects somewhat confusing. It was common cause at the stage of his
plea explanation that the total cost of the renovations was R346 919.74.
Although Mr Block did not specify precisely what the arrangement had been, he
stated that Mr Breda had said that he ‘would be of assistance when financial
payment had to be made in that Trifecta had building operations in Upington at
that stage and renovations to this amount was not an obstacle to be effected’.
Quite what that means is not clear but it seems that the Trifecta group would
presumably pay for the work.

[149] During the course of the trial, the contractor who performed the work,
Mr Myles,11 was called to testify. He explained that while doing the necessary
renovations to the Oranje Hotel in Upington on behalf of the fifth accused, he
was asked to quote on renovations to a disused funeral parlour in Upington
which Mr Block intended to convert into a guesthouse. He did so and was in

11 Incorrectly spelled as ‘Miles’ in the record.

due course employed to do the necessary work, although he was told Mr Block
would be responsible for paying him. He submitted invoices to the fifth accused
although, during the course of the contract, he was instructed by Mr Scholtz to
clearly indicate which of the work he was doing related specifically to the
guesthouse and to submit separate invoices in that regard. At some stage he was
told to stop all work, but carried on for a while in the hope that he would in due
course be paid.

[150] Under cross-examination by counsel for Mr Block, Mr Myles stated that
he had been paid about R156 000 for the renovations to the guesthouse and that
the amount of R346 919.74 (which had initially not been in dispute as being the
cost of the renovations) was in fact his estimate of the balance still due,
although it included a component relating to the work he had done after he had
been instructed to stop. In this Court, counsel for Mr Block argued that we
should accept that this latter sum constituted the gratification in issue, but this
overlooks that, at the end of the day and once he had been able to consider the
invoices and add them up, Mr Myles calculated that he had been paid about
R251 000 for the work he had done at the guesthouse.

[151] However, these various payments were made long after the Kimberlite
Hotel and NCTC building leases were concluded, and whilst they may have
been forthcoming as an ex post facto gratification for those leases, it seems
more likely that Mr Breda and Mr Scholtz were probably happy to have
Mr Block, with his considerable political clout, ‘in their pocket’ so to speak and
that they paid him these amounts in order to be able to use his political
influence to their advantage from time to time. If that is so, the reasoning
similar to that adopted by this Court in Selebi, both they and Mr Block, who
must have been aware of why these amounts were being paid to him, probably
made themselves guilty of the offence of corruption as envisaged by the PCCA
Act.

[152] But that it is not an issue on which a final decision needs be reached as it
is not the crime of corruption in respect of which the State charged them. The
charge related solely to the conclusion of the 2005 contracts of lease of the
Kimberlite Hotel and the NCTC Building, and it seems to me that the payments
set out in paras 152.3 and 152.4 and the other gratifications particularised in
para 153 of the charge, were probably not given and accepted as a quid pro quo
in respect of those leases. Rather they were more likely to have been due to a
continuing corrupt business relationship between the parties, albeit a
relationship which had its roots in the initial two leases in respect of which the
payments set out in paras 152.1 and 152.2 of the charge sheet (ie the amounts of
R228 000 and R500 000) had been made.

[153] In my view, it therefore seems to me that the offence of corruption on
count 15 has been established taking into account the initial two payments of
R228 000 and R500 000, but that the other alleged gratifications, albeit paid and
extended to Mr Block as part of a corrupt relationship, do not fall within the
aegis of the charge. Thus whilst Mr Block may consider himself fortunate that
he was charged in the manner in which he was, and had the charge been
differently framed he may well have been found guilty of corruption relating to
all the payments and gratifications alleged in the charge sheet. In the
circumstances, although the conviction must stand it must be recorded that it
relates only to the payments reflected in para 152.1 and 152.2 of the charge
sheet, and does not embrace the further gratifications the State sought to prove
against him on this count.
[154] In regard to Mr Block’s company, Chisane Investment, it received the
payment of R228 000 paid on 7 March 2006. Mr Block stated in his plea
explanation that it related to consultancy services he had rendered on behalf of
Chisane Investment. It was not suggested to this Court that even if Mr Block
was guilty, he had not acted on behalf of the tenth accused to whom the

payment was made. There is thus no reason to interfere with the tenth accused’s
conviction on this count as well, albeit that its guilt does not include the
gratification of the sum of R500 000 paid to Mr Block.

Count 16
[155] Only Mr Scholtz and the second and third accused were indicted on this
charge which is the mirror image of count 15. It is alleged that Mr Scholtz, or
the second accused, or the third accused, or the late Mr Breda, gave the
gratifications referred to in count 15 to Mr Block or Chisane Investment as a
quid pro quo for Mr Block influencing Mr Crouch to ensure that the
Department of Public Works leased the Kimberlite Hotel and the NCTC
Building.

[156] The court a quo convicted Mr Scholtz and the third accused on this count,
essentially for the same reasons it had convicted Mr Block and Chisane
Investment on count 15, namely, that Mr Block had exerted his political
influence upon Mr Crouch to corruptly assist Mr Breda to secure the leases for
the benefit of the third accused. However, it found the second accused not guilty
on this count as it had only been incorporated in 2006, subsequent to the leases
having been concluded, and could therefore not have been a party to the
corruption.

[157] For the reasons already given in respect of count 15, even if there was an
ongoing relationship of corruption between Mr Block, on the one hand, and
Mr Breda and the Trifecta companies on the other, as a result of the charge
having related solely to the Kimberlite Hotel and NCTC Building leases, only
the payments of R228 000 and R500 000 can be regarded as gratifications that
were given. On a similar basis of reasoning, any conviction on this count must
be limited to those gratifications. The court a quo thus erred in founding its

conviction upon the further gratifications referred to by the State in the
indictment.

[158] However, just as Mr Block and Chisane Investment were guilty of
corruption in respect of the gratifications of R228 000 and R500 000, there can
be no doubt that Mr Breda was similarly guilty of corruption by paying those
sums as a quid pro quo for Mr Block agreeing to use his political influence to
have the leases concluded. Mr Breda clearly acted on behalf of the third accused
in doing so, and thus its conviction on this count, even though it relates only to
the two payments I have mentioned, must stand.

[159] But what of Mr Scholtz? He alleged that he was unaware of these
payments and the reasoning of the court a quo in founding him guilty on this
count is by no means clear. There was certainly not a finding that he had
personal knowledge of the payments of R228 000 and R500 000 and counsel for
the State conceded in this Court that the evidence fell short of establishing
beyond a reasonable doubt that Mr Scholtz in fact knew of these payments. In
the circumstances, the appeal of Mr Scholtz on this count should succeed, as
was correctly conceded by the State, and his conviction and sentence on this
count set aside. This will be reflected in the order set out below.

Count 8
[160] That brings me to count 8, a further charge of corruption brought against
Mr Scholtz and the Trifecta companies, the second to seventh accused. As it
involved the alleged corruption of a public official, it was brought under s
4(1)(b) of the PCCA Act. In paras 127 to 129 of the indictment it was alleged
that accused 1 to 7 were guilty of corruption (a deep breath is again advised):
‘127. In that during the period between 2005 and December 2009 and at or near Kimberley
in the regional division of Northern Cape an within the area of jurisdiction of this
Honourable Court, Accuse 1 to 7 and or the late Mr Sarel Breda, who was then a co-

Director in Accused 2, did directly or indirectly give or agree or offer to give any
gratification to wit,
127.1 10% Shares held by Accused 2 to [Ms Botha)] and or to Jyba Investment
Trust; and/or
127.2 Renovated the house of [Ms Botha] to the amount of R1 265 611,99; and/or
127.3 Cash payment in the amount of R15 000.00 to [Ms Botha],
128.
for the benefit of [Ms Botha] and or for the benefit of Jyba Investment Trust, in order
for [Ms Botha] to personally act in a manner –
(i)
That amounts to the –

(aa)
illegal, dishonest, unauthorised, incomplete, or biased exercise, carrying out or
performance of any powers, duties or functions arising out of a constitutional,
statutory, contractual or any other legal obligation; or
(ii)
That amounts to –

(aa)
the abuse of a position of authority,

(bb)
breach of trust; or

(cc)
the violation of a legal duty or set of rules
(iii)
Designed to achieve an unjustified result,
129.
to wit, that [Ms Botha] circumvented the prescribed procurement processes to ensure
that the Department and or SASSA enter into the Lease Agreements referred to
hereunder with Accused 1 to 7 on the terms beneficial to them.

129.1 Old Oranje Lease Agreement, Upington – Lease Agreement

129.2 14 Van Riebeeck Street, Springbok – Lease Agreement

129.3 Summer Down Place Office Campus, Kuruman – Lease Agreement
129.4 Keur en Geur Building, Douglas – Lease Agreement
129.5 Du Toitspan Building, Kimberley – Lease Agreement
129.6 Du Toitspan Building, Kimberley, Floors 9, 10 and 11 – Lease Agreement.’

[161] There can be no doubt that, in regard to the lease agreements
particularised in para 129 of the charge, Ms Botha made decisions beneficial to
the first to seventh accused. Not only was she responsible for awarding them the
various leases, but in some cases did so on terms even more beneficial than
those in respect of which they had originally tendered to contract. It is
unnecessary to repeat all the various respects in which this took place. For
present purposes it is sufficient to recall that:

(a)
In the instance of the Oranje Hotel, Upington the Department of Social
Services ended up leasing premises almost double the size of what was required
and which still needed a considerable deal of work to put it into proper
condition, for a longer period on that which was necessary, at a rental having an
escalation higher than had been tendered, and without prior approval having
been obtained from the Tender Board – and which resulted in rental in excess of
R1.6 million being paid to the fifth accused over a further seven month period
despite the premises not being fit for occupation.
(b)
Contracts longer than had been advertised were concluded also in respect
of 14 Van Riebeeck Street, (a lease of three to five years had been advertised;
accused 5 had initially offered a lease of five years; on the insistence of
Ms Botha the lease was eventually signed for ten years at an annual rental
escalation of 9.5% rather than the 8% accused 5 had tendered) and Kuruman
(again although both the BEC and BAC had recommended a lease credit of five
years be approved Ms Botha again insisted that the lease period be ten years and
that the annual escalation of the rental should be 9.5% rather than the 8%
contained in the original tender made by the sixth accused).
(c)
In respect of the Keur en Geur building in Douglas, Ms Botha instructed
that the Department of Social Services should accept twice as much office space
as was required, and an additional 400 m2 was included in the lease without a
competitive bidding process being adopted.
(d)
In respect of the second Du Toitspan Building lease, the fourth accused
came to lease the department another portion of the same building for a
substantially longer period, and at a substantially higher rental and annual
escalation rate, than the lease it had in respect of the other portions of the
building – all of which was done on Ms Botha’s instigation without necessary
procurement processes being followed.
[162] Why would Ms Botha act in a way which substantially benefitted the
Trifecta group to the disadvantage of the State in all these instances? The
answer to this question is to be found in the creation of the Jyba Investment

Trust (for convenience I intend to refer to it simply as the ‘Jyba Trust’) which, it
is common cause, came to hold 10% of the shares in the third accused,
transferred to it from Mr Breda’s Shosholoza Trust after the death of Mr Breda.
It has five capital and income beneficiaries who were nominated by Ms Botha.
They are the children of her brother and her sister. The trustees are
Ms Angelique Botha, one of the beneficiaries who was employed by a Trifecta
company, and Mr Ettiene Jacques Naude, an attorney practising in Pretoria who
did work for Mr Scholtz and the Trifecta group.

[163] Ms Botha testified that in 2005, possibly about September or October that
year, and at a time when she was the HOD of the Department, she had discussed
the creation of a trust with Mr Breda. According to her, he had wanted to
expand his business in the Northern Cape and had asked her for names for
people to serve on a trust for business purposes who were likely to help him.
However, according to Ms Botha, this was really no more than a passing
comment and nothing more was said about the matter until after the death of
Mr Breda on 3 March 2009. As some stage thereafter, according to Ms Botha,
Mr Scholtz asked her about a trust and the transfer of shares, and she told him
that her niece, Angelique, was already working for Trifecta and would be a
good candidate for the trust as she was already in the property business. She
then gave the names of her other nephews and nieces. This was her explanation
as to how her nephews and nieces came to be the beneficiaries of a trust, which
was then created solely for their benefit, holding assets which were valued at
approximately R4.5 to R6 million.

[164] This is a somewhat vague and, in certain respects, an unconvincing and
unlikely version, particularly if one bears in mind that both Mr Breda and
Mr Scholtz were looking for persons to benefit who had skills and were likely to
grow the business of the proposed trust. Indeed it was for this reason that
Ms Botha proposed her niece, Angelique, who was already in the property

market, as a beneficiary – or so she alleged. But by the time Ms Botha testified
in June 2014, six years later, three of the five beneficiaries of the Jyba Trust
whom she had nominated were still minors who, six years previously, would
almost certainly have lacked the required business skills and qualities required
to grow the trust’s business. The simple fact is she nominated people in her
immediate family as the sole beneficiaries of this trust, and as a result they were
duly appointed as such in the trust instrument. The obvious intent was to benefit
them solely because of her close familial relationship with them.

[165] Mr Scholtz’s explanation is also far-fetched. In his plea explanation he
stated that when he first approached Mr Breda about doing business in the
Northern Cape, they had discussed and agreed as follows (‘the deceased’
referred to is Mr Breda):
‘7.1
Accused 1 insisted in the participation of a broad base empowerment group,
preferably involving women and children.
7.2
In the light of the fact that Accused 1 did not know any previously disadvantaged
individuals in the Northern Cape region other than the deceased, it was decided that
the deceased will in due course identify people and/or entities that would become part
of the broader base BEE participants in the business venture.
7.3
Accused 1 realised that neither the deceased, nor any other person who would
participate in the business venture, would be in the financial position to contribute
[meaningfully] to the business and that shareholding would have to be transferred to
the BEE participants without requiring payment and/or at par value for shareholding.
7.4
Accused 1 further realised and accepted that any other shareholder, including the
deceased, would not be in the financial position to contribute to the capital and
expenses of the business venture and that he would have to provide all the required
capital to establish the business.
7.5
The shareholding meant for further distribution to broaden the black economic
empowerment base referred to above would in the meantime be held by the deceased
in his Trust pending the transfer to further identified participants.’
[166] If Mr Scholtz was insistent upon a broad BEE group to participate in his
business venture as he stated in this extract, why was he ultimately prepared to

pass on shareholding relating to his group, valued on his own evidence at about
R4.5 to R6 million, to a trust which represented the interest of a few persons,
mostly children, all of whom had close family ties with one person who had
played a vital part in his business venture procuring leases with the Provincial
Government? This bears the hallmark of corruption. And if his genuine
intention was to have a broad based BEE participation in the venture, why was
the trust not established at the outset and only years later after the death of
Mr Breda?

[167] The key to the answer to these questions is to be found in the evidence of
Mr Scholtz, not in the present proceedings but in a previous application brought
as a matter of urgency by the joint trustees of the Shosholoza Trust against the
second accused, the Casee Trust of Mr Scholtz, and numerous other companies,
mostly of the Trifecta group, in which it was sought to interdict the alienation or
encumbrance of various assets. Mr Scholtz deposed to an affidavit opposing this
relief. Although it is unnecessary for purposes of the present case to traverse in
detail the various factual allegations raised by the respective parties, what is of
importance is that the 10% shareholding of the second accused which the
Shosholoza Trust had been holding for the benefit of others, and its value, were
dealt with in some detail. And in that regard, Mr Scholtz stated the following
(again, the ‘Deceased’ referred to in these passages is Mr Breda):
‘After taking the 10% shareholding which was being held by the Shosholoza Trust as
nominee into consideration, the net result is a value of R24 913 774.41. Although the
Shosholoza Trust was registered as a shareholder of 55% of the shares in the (second
accused), the Shosholoza Trust represented by the Deceased had, to my personal knowledge,
in 2005 undertaken to transfer a 10% shareholding in the first respondent to the nominee of
Yolanda Botha, who was a close friend of the Deceased and influential in political circles.
She had not yet nominated the entity to which the shares should be transferred at the time of
the Deceased’s death, and hence the reference to the “YB Trust” in the spreadsheet. That
10% shareholding is also reflected in the organogram, annexure “CS3” which I had handed to

and discussed with the first applicant at our meeting in March 2009, and was at no time
queried or disputed by any of the applicants.
. . .
I refer to what I have stated above in regard to the undertaking given by the Deceased on
behalf of the Shosholoza Trust, and accepted by Yolanda Botha, to transfer 10% of the shares
held by the Shosholoza Trust in the (second accused) to the nominee of Yolanda Botha. This
agreement was confirmed by both of them together to me in 2007 and on numerous
subsequent occasions. It was expressly confirmed to me that until such time as she had
decided upon and nominated the entity which was to hold the 10% shareholding, the
Shosholoza Trust would continue to hold 10% of the shares in the (second accused) for and
on behalf of the entity to be nominated by Yolanda Botha.’

[168] The second accused was only incorporated in April 2006, and to that
extent the reference in this statement to the Shosholoza Trust undertaking in
2005 to hold 10% of its shares on behalf of Ms Botha’s nominee is strictly
speaking incorrect. But nothing really turns on this as it is common cause that
10% of the scheme would be held by a BEE entity, and the fact that the second
accused was only incorporated on a later date and thereafter used as the overall
holding company in the business scheme is neither here nor there. Its shares
ended up being held by the Shosholoza Trust and the Casee Trust in a respective
ratio of 55% to 45% - consistent with the acknowledgment by Mr Scholtz in this
affidavit that he knew from the outset that 10% of the shares being held by the
Shosholoza Trust were being held on behalf of an ‘entity’ to be nominated by
Ms Botha.

[169] Of course on Ms Botha’s version she knew nothing about a 10% share
being held by the Shosholoza Trust awaiting  her nomination of beneficiaries,
and to that extent these two versions are irreconcilable. However, if Ms Botha
had no reason to contemplate that such a valuable share of the business worth
millions of rand would be made available to her or anyone else, which on her
version is the case, why did Mr Scholtz suddenly make this fortune available to
the Jyba Trust immediately after the death of Mr Breda? His explanation was

that he had done so as he and Mr Breda had held discussions on this issue in the
few months before Mr Breda’s death, that Mr Breda had said he would get on
with establishing the envisaged trust and had told him that he had made contact
with Ms Botha about it (she mentions no such contact). Mr Scholtz explained
that he thus felt duty bound to give away 10% of the second accused’s shares to
a trust benefitting Ms Botha’s relatives despite her having never been aware of
any such intention beforehand.

[170] All of this is inherently improbable. It does not explain why even if
Mr Scholtz felt obliged to implement the plan he had insisted upon from the
outset of benefitting persons who would help the business grow, he ultimately
chose just close family members of Ms Botha. Nor does it explain the delay of
several years after the scheme was hatched until the plan was implemented. But
the facts speak louder than words. The obvious explanation of why Ms Botha
acted as she did to the advantage of companies in the Trifecta group was that
she knew her actions would benefit either herself or an entity in which she
would have a direct or indirect interest through the 10% share being held in the
Shosholoza Trust. This is consistent with what Mr Scholtz said in his affidavit.
As the beneficiaries of the entity Ms Botha ultimately nominated, the Jyba
Trust, were all were close members of her family, the inference is irresistible
that she had either them or her own interests at heart in concluding the various
leases – and on terms more favourable to the Trifecta companies than those that
had been tendered.

[171] Importantly, had Ms Botha’s interest in the leases been known they
would probably not have been concluded. Treasury Regulations 16A8.3 and 4,
provide, inter alia:
‘16A8.3 A supply chain management official or other role player –
(a)
must recognise and disclose any conflict of interest that may arise;
(b)
. . .

(c)
may not use their position for private gain or to improperly benefit another person.
. . .
16A8.4 If a supply chain management official or other role player, or any close family
member, partner or associate of such official or other role player, has any private or business
interest in any contract to be awarded, that official or other role player must –
(a)
disclose that interest; and
(b)
withdraw from participating in any manner whatsoever in the process relating to that
contract.’

[172] This explains why the 10% share of the business scheme (or more
correctly the second accused which became its ultimate repository) remained
vested in the Shosholoza Trust until Mr Breda met his untimely fate. Had the
interest of Ms Botha been disclosed, the leases could not have been concluded.
As appears from the bid documents, auditors had to certify who the individuals
were behind bids, including the beneficiaries if trusts were involved in
submitting bids. Had Ms Botha had an interest in a trust that was a party to a
bid, it would have had to have been disclosed with the consequence that the bid
would have been disqualified. For this reason it was necessary to obscure her
interest by retaining the share in which she had an interest in the name of the
Shosholoza Trust. Once Mr Breda had died, however, that state of affairs could
no longer continue and the 10% share had to be allocated to a beneficiary.
Ms Botha couldn’t be seen to accept it and so she and Mr Scholtz agreed to the
creation of the Jyba Trust to benefit her close relations.

[173] These conclusions are the result of inferential reasoning, drawn from the
known facts, but no other reasonable inferences can be drawn from that which is
known. It may well be that initially Ms Botha herself was the intended
beneficiary of the 10% and that certainly seems a strong probability. But one
cannot exclude that she may have intended to benefit another entity in which
she had an interest. It matters not. She acted as she did to the detriment of the
provincial coffers, and clearly made herself guilty of corruption.

[174] Of course the charge on count 8 is the mirror image of Ms Botha’s
corruption. In an attempt to avoid the consequences of her actions, Mr Scholtz
testified that the affidavit had been drafted by counsel in the stressful
circumstances of having to oppose an urgent application, and did not accurately
reflect what he had said. According to him, he had mentioned that there would
be a 10% holding in a BEE entity but not that such entity would be a nominee
of Ms Botha. He said that he had pointed this inaccuracy out to counsel who had
prepared the affidavit, whom he alleged told him that the issue was irrelevant
and need not be changed as there was time pressure to file the affidavit.  In
support of these allegations he relied upon the testimony of his attorney,
Mr Naude, who confirmed that Mr Scholtz had not been happy with the way the
affidavit had been drafted on this issue.

[175] The affidavit concerned was drafted by counsel, Mr B Swart SC, who had
been elevated to the status of senior counsel shortly before and was himself
being led in the matter by another senior counsel, Mr M Maritz SC, who settled
the affidavit. It was the product of several days’ work, and was prepared after
counsel had consulted with Mr Scholtz. Mr Swart emphatically denied that any
inaccuracy had been pointed out to him, and stated that if it had he would
neither have said it was irrelevant nor left it uncorrected.

[176] The court a quo believed him. It found the contrary evidence of
Mr Scholtz and Mr Naude to be ‘pathetic’. This was a factual finding, made by
a court which enjoyed the benefit of seeing the witnesses and is thus not lightly
to be interfered with by this Court on appeal. Moreover what was said in the
affidavit provides the basis of a logical explanation for the 10% share having
been retained in the Shosholoza Trust for several years during which Ms Botha
as HOD of the Department went out of her way to advantage Trifecta at every

turn. There is no reason for this court to conclude that the court a quo erred in
reaching the decision it did on this issue.
[177] The 10% shareholding in the second accused which ultimately found its
way into the ownership of the Jyba Trust was clearly a gratification given as a
quid pro quo for Ms Botha’s assistance in concluding the various leases. The
inference is irresistible that she acted as she did as she had been promised a
gratification in the form of a shareholding in the scheme if she did so.

[178] Mr Scholtz tried to avoid the obvious consequences of this by falling
back on his default contention that he had left the daily running of the business
up to Mr Breda, that all he had done was arrange the finance and that he had not
participated in or had knowledge of any negotiations relating to the conclusion
of the leases. I accept Mr Scholtz, was based primarily at his office at his home
in Pretoria and that he seldom ventured to the Northern Cape. However, one
cannot lose sight of the fact that what he and Mr Breda swiftly built up was a
multi-million rand business, and it seems highly unlikely that Mr Scholtz, a
canny businessman, would entrust everything to Mr Breda, a far less
experienced business person – and indeed one who had through lack of
confidence asked him to be his mentor in business affairs. Even if he was not
actively involved in negotiating the leases as he said, and despite having sung
Mr Breda’s praises and qualities as a businessman, it is extremely improbable
that Mr Scholtz would not have learned of Ms Botha’s involvement in the
conclusion of a series of leases on good terms for the business in which he was
investing great wads of money. And as appears from his affidavit in the
previous matter, he was from the outset aware that Ms Botha was the person
who was going to nominate the entity that would receive the 10% shareholding
of this successful enterprise he had helped create.

[179]  In these circumstances, it would be extending the bounds of credulity to
accept that Mr Scholtz was obliviously unaware of all the negotiations relating

to the various leases. It is significant in this respect that the letter from Rand
Merchant Bank on which so much reliance was placed by his defence to show
that the bank had insisted upon a ten year lease for the Summerdown Place
building in Kuruman, was sent by telefax to both Mr Scholtz and Mr Breda, a
clear indication that Mr Scholtz was closer to the action than he was prepared to
admit. Even if he did not have detailed knowledge of the day to day interactions
between Mr Breda and Ms Botha, he must have known in essence that
Ms Botha had acted to the advantage of the Trifecta group in concluding the
leases. This also explains why immediately after the death of Mr Breda he took
steps to ensure that the 10% share was moved out of the Shosholoza Trust for
the reasons already dealt with in relation to Ms Botha’s corruption. It was, after
all, at his insistence that the trust was created.

[180] Be that as it may, Mr Scholtz caused the transfer of the 10% of the shares
in the second accused to the Jyba Trust in consequence of an arrangement or
understanding reached with Ms Botha during 2005. Mr Scholtz had personal
knowledge of this arrangement, as he himself said in his affidavit. Despite his
allegations to the contrary, the purpose of the 2005 arrangement was not the
participation of a BEE group in the Trifecta group of companies. This is
apparent not only from the failure to implement a BEE scheme before Mr Breda
died but Mr Scholtz’s failure to mention any such intention in his affidavit
where he merely referred to Ms Botha as a close friend of Mr Breda and a
person ‘influential in political circles’.

[181] If not broad based BEE participation, what then was then was the aim and
purpose of the 2005 arrangement? The following factors loom large in the
search for the answer of this question. First, as I have said, after the 2005
arrangement Ms Botha consistently went out of her way and took considerable
risks to ensure that the leases were concluded with the Trifecta group of
companies and on the most favourable terms. Second, her nominee received

10% of the shares in the ultimate beneficiary of these leases, namely the second
accused, the holding company of the Trifecta Group. Third, in his evidence at
the trial, Mr Scholtz falsely denied that an arrangement to understanding had
been reached with Ms Botha.

[182] In the circumstances the only reasonable inference is that, to the
knowledge of Mr Scholtz, the 10% shareholding in the second accused
constituted a gratification that had been promised to Ms Botha during 2005 in
order for her to assist in securing leases for the Trifecta group of companies. On
this basis, alone, Mr Scholtz is guilty of corruption on this count. For that
measure, so are the other Trifecta companies, the second to the seventh accused,
to the extent of their involvement, and it was not suggested otherwise in
argument before us.

[183] The further issue which then arises is whether guilt in respect of the other
gratifications specified in the charge has also been proved. The first of these
was a sum of R15 000 paid in cash to Ms Botha. She alleged it was a donation
to the ANC. She alleged that whilst the party was preparing for its 198th national
celebrations in Kimberley during January 2010, she had a telephonic discussion
with Ms Buizer during which she asked for a donation. This was forthcoming
when Mr Daan Malan, a building contractor who was doing renovations on her
house and whose company was employed by the Trifecta group to do
refurbishment of buildings, arrived at her house and gave her R15 000 in cash
which he said it come from Ms Buizer. According to her, she handed this
money over to Mr Herman Willemse, the ANC provincial bookkeeper, for use
in preparing for the conference.

[184] In any event, in a letter marked for the attention of Mr Scholtz and dated
29 December 2009, Ms Botha wrote to Trifecta Holdings Kimberley, expressing
her thanks on behalf of the ANC for the support and donation. Mr Willemse

was also called to corroborate this. There were some differences between his
version of the events and that of Ms Botha and, importantly, this sizeable
donation in cash was never recorded in the ANC’s books of account as it ought
to have been, and this, according to Mr Willemse, was because everything was
in a rush. One is left with the sneaking feeling that Mr Willemse’s evidence was
false and that he was attempting to protect another ANC colleague.

[185] The court a quo certainly felt so. The learned judge held that the R15 000
was not intended for the coffers of the ANC but for Ms Botha, and that
Mr Willemse did not record the money simply because it was not given to him.
She held that the letter signed by Ms Botha purporting to be from the ANC
thanking Trifecta for the donation, which had surfaced late in the day, had been
manufactured to justify the cash payment she had received.

[186] This payment is certainly shrouded in suspicion. Mr Scholtz exonerated
himself and said that he knew nothing about it. But it could not have been made
at the instance of Mr Breda who died nine months earlier, and who else would
have authorised the payment of such a large sum by Trifecta Holdings?
Furthermore, when Mr T S White, the forensic auditor employed to analyse the
paper-trail of the leases and the amounts paid relating thereto, testified about
this sum being paid, it was never put to him that it was a donation. Ms Botha’s
letter of thanks only surfaced during the evidence of Mr Scholtz, who testified
much later. Conspicuous by her absence was Ms Buizer who made the money
available and should have been able to throw light on the matter but for some
reason was not called (Mr Scholtz testified that she had left his employ under a
cloud of having misappropriated substantial sums of money, but that ought not
to have necessarily prevented either the prosecution or defence from using her
as a witness).

[187] One may have one’s suspicions in regard to this payment, but it is not
necessary to reach a final decision on the matter as, at the end of the day, the
State conceded during argument before us that its evidence had fallen short of
establishing beyond a reasonable doubt that Mr Scholtz had been aware of the
payment, and that he should be given the benefit of that doubt. This concession
was properly and correctly made.

[188] That brings me to final gratification relied upon by the State, namely, the
cost of renovations to Ms Botha’s house in Kimberley effected by Mr Malan
during the period September 2009 to September 2010 whilst working as
Trifecta’s subcontractor and paid for by Trifecta. During about August or
September 2009, Mr Malan was approached by Ms Angelique Botha, the niece
of Ms Botha, who was employed by Trifecta as an administrative clerk in
Kimberley, and asked whether he would do renovations at Ms Botha’s
residence. He later spoke to Ms Botha and told her to speak to Mr Scholtz as he
did not perform private work but regarded himself as bound to work for
Trifecta. Ms Botha therefore asked Mr Scholtz if he was prepared to assist her
in financing the renovations of the house. He agreed, and did so knowing that
financial institutions had refused to render Ms Botha assistance. He explained
his willingness to help as Ms Botha told him that she would be able to repay a
loan as she had left the service of the provincial government in order to become
a Member of Parliament and was due to receive a substantial severance
package.

[189] It appears that Mr Scholtz was prepared to carry Mr Malan’s charges for
doing this work as a loan. At the outset it was envisaged that it would be a loan
in the vicinity of R500 000 but, as time progressed, the amount escalated to well
over a R1 million. After Ms Botha had become a Member of Parliament, the
Joint Committee on Ethics and Member’s Interests considered a complaint
against her, seemingly that the money spent on her house had been a corrupt

gratification. This led to Ms Botha producing a purported loan agreement
between herself and the second accused, purportedly reduced to writing and
signed in Cape Town on 10 March 2010. In a subsequent agreement signed by
them on 20 June 2011 it was agreed that Ms Botha still owed R771 348.68 in
respect of improvements done to her residence.
[190]  Whether the first agreement had been falsified became an area of
considerable investigation during the trial. It led to the court a quo insisting
upon a forensic examination being carried out on the computer of Mr Naude,
the attorney that I have mentioned. He was the author of the loan agreement, a
copy of which was produced in court, and alleged that the hard-drive of the
computer on which the original had been drafted had crashed. It was also
contended that the loan agreement that was produced was a recent fabrication
and that Mr Naude’s computer had been loaded with software designed to
prevent forensic examination.

[191] All of this related to an enquiry if there had in fact been a loan agreement
or whether the renovations were performed by Mr Malan on behalf of the
second accused as a gratuitous and corrupt gratification and the loan agreement
produced in court was a subsequent false document.  In the light of the view that
I take of this matter, it is not necessary to reach a final decision on this point.
Even if the cost of the renovations were regarded as a loan, it would still have
amounted to a gratification if it was advanced and received in circumstances
which satisfied the requirements of the offence of corruption as envisaged in s 4
of the PCCA Act.

[192]  Nevertheless, sight must not be lost of the fact that the renovations were
done for Ms Botha after she had left the employ of the provincial government.
And like the payment of R15 000 mentioned above, this was well after the
leases referred to in count 8, in respect of which gratifications contended for
were allegedly advanced, had been concluded. In these circumstances, even if it

is accepted that the R15 000 paid and the renovations done flowed from a
relationship of corruption, there is nothing to show that these two amounts were
paid and received as gratifications in respect of leases that had been concluded,
in most instances, years before. Indeed, on a similar basis of reasoning to that
set out above in respect of Mr Block on count 15, they are more likely to have
been gratifications paid and received as part of an on-going corrupt relationship
where it was accepted by both sides that one hand would wash the other, so to
speak, in respect of other favours already made or anticipated in the future.

[193] The State, however, limited itself to gratifications advanced to and
accepted by Ms Botha for her actions in the conclusion of the earlier, specific
leases mentioned in count 8. The charge on this count did not relate to the
conduct of a general, on-going corrupt relationship between Ms Botha and her
co-accused. Had that been the charge, the result may well have been different;
but they cannot be convicted of a corruption with which they were not indicted.

[194] Consequently, although Mr Scholtz and the second to seventh accused
were correctly found guilty of corruption on count 8, and their convictions on
that count must stand, it does not embrace the R15 000 paid in cash to Ms Botha
nor the renovations effected to her immovable property.

Counts 34 and 35
[195] These are charges of money laundering brought under ss 4 and 6 of the
Prevention of Organised Crime Act 121 of 1998. It is unnecessary to detail the
reasoning of the court a quo and why it convicted the first, second and third
accused on count 34 and the first, third, eighth and ninth accused on count 35.
Suffice it to record that the reasoning was somewhat disjointed, and counsel for
the State, correctly in my view, conceded that their guilt on these counts, had
not been established and that the appeal in their respect should therefore

succeed. That will be reflected in our order and nothing more needs to be said in
relation thereto.

Sentence
[196] The second to seventh appellants having failed to obtained leave to
appeal against their sentence, the appeal in respect of sentence is thus limited to
the charges of corruption on which Mr Scholtz (count 8) and Mr Block (count
15) have been convicted. Corruption is an offence contained in Parts 1 and 2 of
Chapter 2 of the PCCA. Each count involved an amount far in excess of
R500 000. That being so, Part II of the Second Schedule to the Criminal Law
Amendment Act 105 of 1997 prescribes a minimum sentence of 15 years’
imprisonment unless there are substantial and compelling reasons justifying a
lesser sentence.

[197] In that regard, as has been regularly stated, the legislature intended there
to be a severe, standardised and consistent response where offenders commit
these offences. Accordingly, whilst the courts have a residual discretion to
decline to pass the prescribed minimum sentence, they should only do so where
there are circumstances present which provide truly convincing reasons for a
lesser sentence – see eg S v Malgas 2001 (2) SA 1222 (SCA); 2001 (1) SACR
469 (SCA) paras 8 and 25. The court a quo determined that there were no such
circumstances in the case of either Mr Scholtz or Mr Block and, accordingly,
imposed the prescribed minimum of 15 years’ imprisonment. It is against these
sentences that they appeal, contending that the court a quo erred in its
conclusion in that regard and that there were in fact substantial and compelling
circumstances justifying the imposition of a lesser sentence.

[198] In considering this issue, the severity of the offences in respect of which
they were convicted must not be underestimated. In an affidavit filed in the
matter of South African Association of Personal Injury Lawyers v Heath &

others 2001 (1) SA 883 (CC); 2001 (1) BCLR 77 (CC) (Heath), the Minister of
Justice, the fourth respondent in the matter, is reported to have said:12
‘It is a regrettable and notorious fact that the levels of crime in South Africa are unacceptably
high. One aspect of crime which requires special investigative measures relates to corruption
and unlawful conduct involving State institutions, State property and public money. Very
often, such conduct is perpetrated by public servants and State officials.’
[199] Like bribery, which it encompasses, corruption is ‘a corrupt and ugly
offence . . . an insidious crime difficult to detect and more difficult to eradicate’
which ‘if unchecked or inadequately punished by the courts, have a
demoralising effect on business standards and fair trading’. (I adopt the
phraseology of this Court in S v Kelly 1980 (3) SA 301 (A) at 313E-F.) Those
comments, unfortunately, are still apposite today. And, as was said in Heath
para [4]:
‘Corruption and maladministration are inconsistent with the rule of law and the fundamental
values of our Constitution. They undermine the constitutional commitment to human dignity,
the achievement of equality and the advancement of human rights and freedoms. They are the
antithesis of the open, accountable, democratic government required by the Constitution. If
allowed to go unchecked and unpunished they will pose a serious threat to our democratic
State.’
Similarly, this Court in Shaik observed that corruption ‘eats away at the very
fabric of our society and is the scourge of modern democracies’, and that:13
‘The seriousness of the offence of corruption cannot be overemphasised. It offends against
the rule of law and the principles of good governance. It lowers the moral tone of a nation
and negatively affects development and the promotion of human rights. As a country we
have travelled a long and tortuous road to achieve democracy. Corruption threatens our
constitutional order. We must make every effort to ensure that corruption with its putrefying
effects is halted. Courts must send out an unequivocal message that corruption will not be
tolerated and that punishment will be appropriately severe.’

[200] That the legislature intended corruption to be severely treated is not only
reflected in the legislation relating to prescribed minimum sentences but also by

12 Heath para 3.
13 Schaik para 223.

s 26 of the PCCA which provides that a person convicted of an offence referred
to in, inter alia, Parts 1 and 2 of that Act – which includes corruption – is liable
upon conviction ‘to imprisonment up to a period for imprisonment for life’.

[201] The argument on behalf of the first accused, as I understood it, was that
the court a quo had erred or misdirected itself in not properly taking into
account the value of the assets forfeited to the State by order of the court a quo
pursuant to an application under the Prevention of Organized Crime Act 121 of
1998 (POCA). Section 18(1) of POCA provides that a court convicting an
offender of certain offences may inquire into any benefit which the offender
may have derived from the offence and that, if it finds that there has been a
benefit so derived, may ‘in addition to any punishment which it may impose in
respect of the offence make an order against the defendant for the payment to
the State of any amount it considers appropriate’.

[202] Pursuant to these provisions, the court a quo made a confiscation order
against the first to seventh accused. Operating as a civil judgment, it obliges
them jointly and severally, the one paying the other to be absolved, to pay to the
Treasury sums totalling in excess of R60 million. It was argued that the effect of
this order, taken together with the first accused’s personal circumstances,
resulted not only in there being substantial and compelling circumstances
justifying a sentence less than that prescribed but that a non-custodial sentence
would have be appropriate (a fine of R5 million together with a period of
correctional supervision was suggested).

[203] In considering this argument, it must be remembered that the purpose of a
confiscation order under s 18 of POCA is to remove the incentive for crime by
stripping offenders of the proceeds of their misdemeanours, and not to punish
them – see eg National Director of Public Prosecutions & another v Mohamed
NO & others 2002 (4) SA 843 (CC) paras 15 and 16 and National Director of

Public Prosecutions v Gardener & another 2011 (1) SACR 612 (SCA) para 19.
As this Court went on to say in Gardener:14
‘It is plain that confiscation and sentence are to be treated separately – for good reason. The
purpose of sentencing is to punish an offender for his or her criminal wrongdoing. The
severity of a sentence is primarily intended to reflect the defendant's culpability in relation to
the offence for which he or she is being punished. The main purpose of a confiscation order is
to deprive offenders from deriving any benefit from their ill-gotten gains. The achievement of
this purpose may have a punitive effect, but this is not its rationale. The severity of a
sentence, therefore, generally ought not to have a bearing on the exercise of a court's
discretion whether to make a confiscation order . . . .’

[204] It may be argued that if  the sentence imposed on an offender is generally
to be disregarded in considering whether a confiscation order should apply, the
converse should also apply so that a confiscation order should generally be
disregarded when sentence is considered. In my view, however, an inflexible
rule to that effect would be unjust, especially in a case such as this where the
effect of the amount of the confiscation order is substantial. Thus I must take
into account the fact that compensation orders have been made. But as the
rationale of a confiscation order is to deprive an offender of the benefits of his
or her offence, it would be wrong to place undue emphasis upon it as a factor
relevant to sentence.

[205] All this really means is that as opposed to a case in which a loss has been
suffered, the loss will have been recovered if the confiscation order leads to a
successful recovery. So whilst it may to that limited extent remain a factor to be
taken into consideration together with all other factors relevant to the imposition
of sentence, standing alone it should in no way be determinative of whether a
prescribed minimum sentence ought not to be imposed. That is all the more so
in a case such as this where the sentence prescribed, reflecting the severity of
the crime, is a lengthy period of imprisonment.

14 Paragraph 23.

[206] Life has visited personal tragedy upon the first accused. His late wife,
who passed away in January 2013, was ill for a long time and had been virtually
immobilised due to her sickness for years prior to her ultimate demise, during
which period he cared for her, hand and foot. During the course of the trial he
lost his son in a tragic farming accident. For all of this one has great sympathy
for him. But imposing sentence is not a matter of maudlin sympathy. It is doing
what is just having regard to all the relevant circumstances.

[207] The first accused is a successful businessman who, it is clear from the
record, built up a number of successful enterprises as is evidenced by there
being some 120-130 people employed in the various businesses in which he is
involved and runs. A sentence of imprisonment will disqualify him from being a
company director in the future. He is now a man in his late fifties, having been
56 years of age when sentence was argued in September 2016.

[208] Despite the natural sympathy one has for a man who suffered the tragic
loss that he has, I am not persuaded that the personal circumstances of the first
accused, taken together with the fact that a substantial confiscation order has
been made, justifies a finding that there are convincing reasons for the
imposition of a sentence less than that prescribed as a minimum. Successful
business people should set the standard by acting properly, not corruptly.
Corruption in the sphere of government contracts is an on-going blight upon our
constitutional democracy, and those who offend must expect the full might of
the law to be brought down on them. Even though the conviction on count 8
does not embrace either the renovations effected to Ms Botha’s home nor the
payment of the sum of R15 000, I am not persuaded that the prescribed sentence
imposed by the trial court is shockingly inappropriate as was argued on behalf
of the first accused. The appeal against the sentence of 15 years’ imprisonment
imposed on the first accused in respect of his conviction on count 8, must fail.

[209] Turning to the appeal of the ninth accused (the eighth appellant) Mr
Block, much of what I have said above applies in his case with equal force. In
his case, as well, a confiscation order was issued, albeit in a much lesser sum of
R1 364 673.20. He was also ordered to pay a further sum of R123 047.82
relating to fees and disbursements incurred by a curator appointed by the court.
[210] Mr Block is now some 50 years of age (he was 48 years old at the time of
sentence in the court a quo), married, with four dependent children, two of
whom are minors.  His counsel’s statement that he maintains his elderly parents
and extended family, that he has partially lost the use of his right arm as a result
of a motor vehicle accident and that he suffers from high blood pressure, were
not disputed. Nor was it disputed that after having been detained for a short
period of time when he was 18 years of age, he initially left South Africa but
returned in 1987, obtained an Executive Development Certificate from the
University of Cape Town and was involved in community development projects
for many years. He rose to achieve high office in the ANC having acted as the
head of that party in the Northern Cape, and was a member of the Executive
Council for the Northern Cape, both in the Department of Roads and later in the
Department of Education and then the Department of Finance.

[211] In the light of all of this and the confiscation order, it was argued on
behalf of Mr Block that a fine of R1 million, coupled with a suspended sentence
of imprisonment, would be an adequate propitiation for his corruption
conviction. I cannot agree. Mr Block was a political leader who achieved high
political office. Unfortunately, he used his status to corruptly enrich himself. If
there is any prospect of fighting the endemic corruption which exists in this
country, it is for our political leaders to set the example and not to misuse public
offices to corruptly obtain personal wealth. That is what Mr Block did, and it is
necessary for an unequivocal message to be sent out that corruption on the part
of politicians, especially those holding high office, will not be tolerated and that

punishment for those who act as Mr Block has done in this case will be severe –
see in this regard S v Shaik para 223. Furthermore, as already stressed in regard
to Mr Scholtz, the fact that a confiscation order has been made is in itself not a
special and compelling circumstance justifying a sentence more lenient than that
prescribed. In all these circumstances, the appeal by Mr Block against his
sentence for corruption on count 15 must fail.
Summary and conclusion
[212] For the reasons set out above:
In case 428/17:
(a)
the first to seventh accused were correctly convicted of corruption on
count 8, and their appeal in that respect must fail;
(b)
the appeal of the first accused in respect of his conviction of corruption
on count 16 is to be upheld, and the conviction and sentence imposed on that
count set aside;
(c)
the appeal of the third accused in regard to its conviction of corruption on
count 16 is to be dismissed;
(d)
the appeals of the first, second and third accused against their conviction
of money laundering on count 34, as well as the appeals of the first and third
accused of money laundering on count 35, are to be upheld, and the convictions
and sentences imposed upon them in respect of those counts set aside.
In case 635/17:
The appeal of the first appellant against his sentence of 15 years’ imprisonment
on count 8 must fail.
In case 491/17:
(a)
The ninth and tenth accused were correctly found guilty of corruption on
count 15, and their appeal on that charge must fail.
(b)
The appeal of the ninth and tenth accused in respect of their conviction of
money laundering on count 35 is to be upheld, and such conviction and sentence
set aside.
In case 636/17:

The appeal of the ninth accused against his sentence of 15 years’ imprisonment
imposed for corruption on count 15 must be dismissed and such sentence
confirmed.

[213] Regretfully, one final matter needs to be mentioned. I must express my
disquiet about the conduct of Mr Naude, the attorney who I have mentioned. I
have deliberately refrained from making definite factual findings in regard to
certain of his actions in this matter as to do so without hearing him would be
unfair. Nevertheless, from the evidence on record it seems that he may well
have been a party to the fabrication of evidence, particularly in regard to the
loan agreement purportedly concluded by Mr Scholtz with Ms Botha, as well as
the attempted obstruction of the court a quo’s inquiries in regard to that issue.
And here I mention his contention that the hard drive of his computer had
crashed and the allegation that he had loaded his computer with software
designed to frustrate a forensic examination such as that ordered by the court a
quo. Moreover his testimony on certain aspects conflicted with that of senior
counsel, Mr Swart, whose evidence was believed by the trial court. A court is
entitled to have absolute trust in the credibility of its practitioners and the sum
of all these factors leads to the unfortunate suspicion that Mr Naude did not
honour that trust. I put it no higher than that, but even on his own version of
events he was a party to an affidavit from his client being placed before court
which his client had told him was not accurate. In the circumstances I have no
option other than to refer copies of the record of this appeal and this judgment
to the Law Society of the Northern Provinces for it to investigate the matter and
take such action as it deems fit.

[214] It is ordered as follows:
A
In case numbers 428/17 and 635/17:

The appeal of the first appellant against his conviction of corruption on
count 16 is upheld and such conviction and the sentence imposed on that
count are set aside.
The appeals of the first, second and third appellants against their
conviction of money laundering on count 34, as well as the appeals of the
first and third appellant against their conviction of money laundering on
count 35, are upheld and such convictions and the sentences imposed in
respect thereof are set aside.
Save as the foresaid, the appeals of the first to seventh appellants are
dismissed and their convictions, as well as the sentence of 15 years’
imprisonment imposed on the first appellant in respect of count 15,
confirmed.
B
In case numbers 491/17 and 636/17:
The appeals of the eighth and ninth appellants (the ninth and tenth
accused) against their convictions of money laundering on count 35 are
upheld, and their convictions and sentences on that count are set aside.
Save as the foresaid, the appeals of the eighth and ninth appellants against
their conviction on count 15 and the eighth appellant against the sentence
of 15 years’ imprisonment imposed on that count are dismissed, and that
sentence is confirmed.
C
The Registrar of this court is directed to forward a copy of both this
judgment and the record to the Law Society of the Northern Provinces for
it to consider possible disciplinary action in the light of para 213 of the
judgment.

_____________
L E Leach
Judge of Appeal

Appearances

For First – Seventh Appellants:
MMW van Zyl SC
For Eighth & Ninth Appellants:
S Joubert SC
Instructed by: (First – Seventh)
WA du Plessis Attorneys c/o Mjila &
Partners Attorneys, Kimberley
(Eighth & Ninth)

Mjila & Partners Attorneys, Kimberley

Claude Reid Attorneys, Bloemfontein

For Respondent:

P Serunye (with him B Mdlalose and S Hanise)
Instructed by:

Director of Public Prosecutions, Kimberley

Director of Public Prosecutions, Bloemfontein