Stefanutti indemnity ‘illegal’ – NPA boss

2013-06-23 14:00

Commercial crime prosecutions head slates granting of indemnity to whistle-blower

South Africa’s head of commercial crime prosecutions has criticised the granting of indemnity to a construction industry executive who blew the whistle on decades of fraud, collusion and racketeering.

This comes as the Competition Commission prepares to issue multimillion-rand fines to South Africa’s biggest construction companies, while the Hawks intensify their investigation into the industry.

City Press is in possession of a letter by Advocate Lawrence Mrwebi, head of the specialised commercial crime unit (SCCU) of the National Prosecuting Authority (NPA), to the attorneys of construction firm Stefanutti Stocks.

Moneyweb reported on Thursday that Stefanutti would be fined R323 million by the Competition Commission. Other construction companies who have announced their fines are Basil Read (R75 million) and Raubex (R59 million).

In the letter that Mrwebi wrote to attorneys Webber Wentzel in September last year, he criticises the granting of indemnity to Stefanutti executive director Schalk Ackerman by prosecutor Glynnis Breytenbach.

In terms of section 204 of the Criminal Procedure Act, witnesses who admit guilt and testify for the state may receive indemnity from prosecution.

“I became concerned ... with the process embarked upon by the SCCU officials relating to possible granting of section 204 indemnity, at this stage, to persons in the matter.

“In my view, any process of or any considering of such process at this stage of the matter is premature and may amount to an irregularity or may be outright illegal,” warned Mrwebi.

The involvement of Breytenbach in Stefanutti’s case adds additional complexity: Mrwebi was one of the main witnesses against her in the NPA’s failed disciplinary hearing, which led to Breytenbach being acquitted on each of 15 disciplinary charges.

City Press reported last week that the NPA was investigating new charges against Breytenbach, who has since returned to work.

It is understood the construction industry case and her granting of indemnity to Ackerman is part of the new probe.

City Press revealed in February that the Hawks were investigating construction companies for illegally fixing multimillion-rand tenders, including the building of two World Cup stadiums.

After Group Five blew the whistle to the Competition Commission, which was the first to investigate collusion in the industry, Stefanutti decided to “drop their pants” to the NPA in return for indemnity from prosecution.

Ackerman was granted indemnity for his full disclosure of years of tender-rigging, but Stefanutti was still awaiting the granting of indemnity to 18 other company directors and managers, including chief executive Willem Meyburgh.

Communication between Stefanutti’s lawyers and the NPA makes it clear that the company used its institutional knowledge – most of the 19 directors worked at the other big construction firms before – as leverage to obtain indemnity.

“The affidavits (by Stefanutti directors to the NPA) largely speak to the conduct of the staff members while serving as senior staff members in the employ of other firms (including) Group Five, Grinaker-LTA, Aveng, Concor and Murray & Roberts,” reads a letter by attorney Martin Versfeld to the NPA.

Blanket indemnity now seems unlikely in light of Mrwebi’s attitude in his letter to the lawyers.

Although he admits not having read the affidavits made by Stefanutti employees, Mrwebi states that section 204 indemnity may only be considered once investigations are finalised.

He told Stefanutti to approach acting NPA head Nomgcobo Jiba if they were unhappy with his views.

Versfeld advised him that they would, saying they “strongly disagree(d)” that there was any irregularity or illegality in the process.

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