How strong is the fraud case against Gordhan?

The National Prosecuting Authority will have its work cut out for it in trying to successfully convict finance minister Pravin Gordhan on charges of fraud, according to a law expert.

On Tuesday, NPA head Shaun Abrahams announced that Gordhan has been issued with a summons to appear before the court on charges of fraud. The charges relate to alleged fraudulent behaviour in Gordhan signing off on an early retirement process at SARS for former deputy commissioner, Ivan Pillay.

Law expert, Pierre de Vos, has written a piece on his website, Constitutionally Speaking, breaking down the merits of the state’s case against the minister, and its chances of successfully prosecuting Gordhan in a court of law.

De Vos said that the charge of fraud itself has raised many eyebrows, as it has no relation to the initial accusations – regarding the so-called “rogue SARS unit” –  that drove the Hawks and the NPA to investigate the minister in the first place.

“This sudden change of direction from the Hawks and the NPA will create a suspicion among many South Africans that the investigation and, now, prosecution of Minister Gordhan might have been animated, at least in part, by motives other than to secure a criminal conviction in a court of law,” de Vos said.

However, despite the suspicions, it does not mean that the state does not have a case against Gordhan, the expert said – but without “smoking gun” evidence, it’s going to be an up-hill battle for the NPA.

“In order for the NPA to prove beyond reasonable doubt that Minister Pravin Gordhan is guilty of fraud, the state would have to prove that Minister Gordhan unlawfully and intentionally made a misrepresentation which caused prejudice or potential prejudice to another (or to the state),” de Vos said.

To achieve this, the state will have to prove that:

• Gordhan made some or other misrepresentation when he approved the early retirement for Pillay.
• Gordhan claimed that a fact or facts existed which did not exist relating to how early retirement is processed
• “Sufficient reasons” did not exist for the retirement while Minister Gordhan claimed that such reasons existed.
• Gordhan falsely claimed that Mr Pillay was entitled to be re-employed on a contract basis when he was not entitled to be so re-appointed.

According to de Vos, the state’s case in this regard is flimsy, as the Act Gordhan is alleged to have contravened does not define what would constitute such “sufficient reasons”, and as head of SARS through the ministry, it may well have been within Gordhan’s power to define these reasons himself.

Further, while Abrahams noted that the South African Revenue Service Act prohibits any employee from serving as acting Commissioner for a period longer than 90 days at a time, the charge sheet does not state that Pillay was fraudulently appointed as acting Commissioner, but rather that he was appointed as Deputy Commissioner – which does not apply.

“It might be possible for the state to prove the requirement that there was prejudice or potential prejudice to the state as the state had incurred extra expense to pay out the amount for Mr Pillay’s pensionable benefit,” de Vos said.

“However, on the third requirement for fraud, the state might have a problem with proving that Minister Gordhan had acted unlawfully. This is because unlawfulness is excluded where a person has acted in terms of the authority bestowed on him.”

Over and above these technicalities, de Vos said the biggest challenge in the state’s case would be to prove beyond reasonable doubt that Gordhan had the intention to commit fraud.

“This means the state would have to prove that Minister Gordhan was aware that the representations he made were false (if they were indeed false),” he said.

“Unless there was smoking gun evidence proving that Minister Gordhan knew that the representations he made were false – or unless it can be shown that it would be absurd to conclude that Minster Gordhan at all times believed that the representations he made were true – the state’s case would fail.”

You can read the full piece here.

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