Court orders SA to pay back seized $9.3m to Nigeria

2015-10-30 20:09


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Cape Town - South Africa has to pay back Nigeria the $9.3m it seized at Lanseria Airport in terms of an order which should end a diplomatic row over allegations of illegal arms deals and money laundering.

In terms of an agreement, the Nigerian government can only buy its military equipment through South Africa's Armscor when it does deals in the country.

At one point in the drawn out saga to get its money back, the Nigerian government said the South African presidency had instructed that the money be returned to them after they laid claim to the piles of notes found in the luggage of an Israeli arms dealer.

It had written: "We have been reliably informed that the South African presidency has directed that litigation against the seized money should be withdrawn since the Nigerian government... confirmed that the money was given to the arms contractor for the purpose of leasing six humanitarian helicopters from South Africa."

This was quickly rebuffed by the Department of International Relations and Co-operation (Dirco) and the National Prosecuting Authority (NPA), who said only a court could instruct them to give the money back.

'Innocent interests'

Former Asset Forfeiture Unit head Willie Hofmeyr had written to the Nigerian government, explaining that the National Director of Public Prosecutions intended applying for the money be forfeited to the state. 

He said in the course of deciding this, the court should ascertain whether the money was instrumental in a crime, and whether certain "innocent interests" should be excluded from the order.

Anyone could apply for their "innocent interest" to be excluded, but it had not been done.

The trouble started when customs officials at Lanseria International Airport seized the cash from the bags of Israeli arms dealer Eyad Mesika on the evening of September 5 2014. 

In an affidavit afterwards, the police's Lieutenant-Colonel Johannes Ngaka Makua said he believed the money was linked to illegal purchases of weapons and ammunition "and/or" money laundering.

He found it suspicious that there were discrepancies in the documentation provided by Sven Rutte from "journey management company" Tier One at the airport when he was called to customs by Mesika, who had contracted him for aviation supplies. The invoice was for $27m and the information on it was different to the end user certificate produced. 

Order to seize the money

According to the court papers, the invoice listed military items, including rockets, and an order for three Bell military helicopters had been changed to six non-military helicopters.

He also found it dodgy that Mesika did not transfer the money to Rutte's company, believing that he had not done this because he knew that the transfer would have aroused suspicion.

The South African authorities were accused of making this alteration.

The NPA's Asset Forfeiture Unit (AFU) stepped in and on September 12 obtained an order to seize the money while the case was investigated.

It would be held by the SA Reserve Bank (SARB) and, in terms of the Prevention of Organised Crime Act, the owner of the money had 90 days to say why the order should not be made permanent.

Rutte's side of the story was that he had quoted for aircraft, crew, a stand by fee and contract support staff for $27m for 90 days, and the hiring of six helicopters to a middleman who did not tell him what it was for. He added that he did not organise military equipment because he was not licensed to do so.

He was told it was urgent and asked if he would accept cash. He declined initially, but then established it would be fine if he had clearance from SARB and if the money was declared. He said Mesika flew to South Africa the same day he issued the invoice on the understanding that the contract would be concluded in person.

Nigerian government incensed

It was when Mesika went through customs with eight bags stuffed with $9.3m in bills, that things went awry. Rutte was called aside and he said he was treated aggressively by the officials. 

He said the original plan had been to go and look at helicopters at Grand Central the next day, with a view to hiring the helicopters from a company in Germany. They would then be crated in Germany and sent to Nigeria.

Over the days, the Nigerian government, through its embassy in South Africa, let South African authorities know that Mesika was buying equipment on its behalf, and said it must have the money back.

As the matter dragged on through diplomatic channels, the NPA carried on with its court papers in terms of the Prevention of Organised Crime Act and gave the Nigerian government a chance to explain to the court why the money was not the proceeds of a crime, and to apply for the return of the money.

The Nigerian government was so incensed that a South African sheriff of the court had simply dropped off its court papers at its high commission gates - saying it had 90 days to tell the court why it should get its money back - that it wrote a note to Dirco to complain that this was not the way things were done between governments. 

After being told in a note from Dirco, preceded with the usual warm greetings, that only a court in South Africa could decide if it could get the money back, a frosty note, also preceded by diplomatic niceties, was sent to Dirco asking for step by step instructions on how to motivate to the court that it get its money back.

In an affidavit laced with umbrage, denials and warnings that warm relations between the two countries were in jeopardy, the Nigerian government gave its side of the story.

It explained that it saw nothing wrong in sending its trusted arms dealer Eyad Mesikal to South Africa with wads of cash in his bags to buy equipment to help it counter terrorist group Boko Haram on behalf of its military. Sometimes first time sellers were wary, and required a cash deposit upfront. It denied that it wanted weapons or military helicopters.

With a lengthy Wikipedia citing on Boko Haram attached, it explained that it was having problems with the group, saying it wanted to take over Nigeria and turn it into an Islamic state. It needed extra equipment to help refugees who were being displaced by Boko Haram.

Not intended for military use

Its own military did not have enough military equipment, so it had asked Mesika to organise the extra equipment and had given him $10m, with the $9.2m meant as part payment.

It stated that none of the equipment would have been supplied by South Africa, so it could not have been in contravention of arms deal regulations in the country and it was not intended for military use.

It acknowledged that it had had a similar mishap regarding the alleged attempted purchase of military equipment in South Africa before, but even in that case the equipment would not have come from South Africa.

In its court papers, the Nigerian government said it had been unaware of South Africa's laws on buying weapons.

It also submitted the paperwork required to prove that its intentions were not to smuggle anything, or launder money. It asked that the money be transferred to the Nigerian government's defence account with Standard Bank.

According to NPA spokesperson Luvuyo Mfaku, the High Court in Pretoria ordered the return of the money on September 23 this year after the NPA said it would not be able to prove the intention to commit a crime.

Mfaku said the High Court in Pretoria ordered that, although there had a been a breach in not declaring the money, there were no prospects of successfully prosecuting Nigerian officials or its government on criminal intention. The intermediaries were not prosecuted either.

Read more on:    npa  |  ndpp  |  willie hofmeyr  |  nigeria

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