Cape Town – A legal reform campaigner that is fighting what he terms “court capture” has told Parliament that the Financial Intelligence Centre (FIC) Amendment Bill is in breach of the Constitution.
The view by campaigner Justin Lewis forms part of his submission to the Standing Committee on Finance, who called for submissions regarding the controversial bill.
Lewis, who started human rights lobby group Casisa to tackle corruption in South Africa’s courts, said he is specifically opposed to Section 45 B(1C) of the bill, which would allow FIC inspectors to conduct warrantless searches under specific situations.
“I make this submission regarding our concerns (around the) absence of any meaningful penalties for the abuse of the extraordinary rights that warrantless searches grant on the investigating authorities referred to in the bill,” he said.
Lewis’s submission was received on Thursday and he was requested by the committee to attend the hearings, which are set to begin next week.
Zuma dragging his heals
The bill was passed by Parliament in May 2016 and submitted for Zuma’s approval on June 13. President Jacob Zuma was supposed to sign it within a 30-day period, but he sent it back to Parliament for reconsideration in November 2016 as he felt “certain provisions of the bill do not pass constitutional muster”.
The draft legislation will require a senior bank official to approve the accounts of prominent influential persons and oblige banks to establish the source of funds, as well as monitor these accounts on a regular basis.
Progressive Professionals Forum, led by former government spokesperson Mzwanele (Jimmy) Manyi, petitioned Zuma to not sign the bill into law.
Television station ANN7, which is owned by the Gupta family, has also campaigned against it, City Press reported. The family’s accounts are likely to face increased scrutiny as the new draft law makes provisions to red flag the accounts of foreign exposed persons. The Guptas fit this definition because of their proximity to Zuma.
Explaining why the bill was delayed, Floyd Shivambu of the Economic Freedom Fighters said: "But then the Saxonwold platforms and editorials in the (Gupta-owned) New Age (newspaper) argue that the bill must not be passed. So, just before Parliament closes the president decides to bring back that bill to be entertained. It frustrates the efforts to fight financial crimes."
Why bill is in breach of Constitution - Lewis
“It may well be that the current bill is in breach of … principles (outlined by the Constitution) and is inconsistent with the supreme law that binds it, in the diminishing of fundamental human rights in favour of faceless individuals,” Lewis said in his submission.
The amendment bill states that an “inspector otherwise required to obtain a warrant ... may enter any premises without a warrant with the consent of the owner or person apparently in physical control of the premises after that owner or person was informed that he or she is under no obligation to admit the inspector in the absence of a warrant”.
In addition, the bill says an inspector can enter without a warrant “if the inspector on reasonable grounds believes that a warrant will be issued under [a] subsection if the inspector applied for it and the delay in obtaining the warrant is likely to defeat the purpose for which the inspector seeks to enter the premises”.
Lewis said he petitioned Zuma not to sign the bill in 2016, which “may or may not have contributed to the bill referred to above not being signed”.
DA objected to warrantless searches from the start - Lees
Responding to the submission by Lewis, Democratic Alliance MP Alf Lees told Fin24 on Thursday that the DA had objected to the provision for warrantless searches when the bill was originally before parliament.
“The ANC accepted the opinion of the parliamentary legal advisors that the bill including section 45 B(1C) was constitutional,” he said.
The submission by Lewis includes a report he sent to Zuma, which summarises his allegations that the South African judicial and banking sectors face allegations of corruption, citing examples regarding the liquidation of assets.
It is a term Lewis refers to as “court capture” and he says the Hawks are investigating various allegations that he has brought forward.
Johann Rupert’s Franschhoek farm in the spotlight
Lewis says allegations of court capture were at the centre of a dispute over the 85-hectare Klein Normandie farm in Franschhoek in the Western Cape, which businessman Ian Brakspear lost during the liquidation of the property.
Media24 Investigations reported at the time that Brakspear had negotiated to sell Klein Normandie in 2007 to businessman Zunaid Moti for R37m, but Moti found out about Brakspear’s troubles and was able to get it for R18m via Auction Alliance.
It was then sold to South African business mogul Johann Rupert for R25m, who said it was a “defensive buy” and was above the market value.
The liquidation was the centre of a 2013 Durban High Court case, in which Lewis assisted Brakspear against the team of liquidators.
Organised syndicate faking court orders?
While they lost the case, The Witness reported in 2013 that “Hawks investigators are probing possible widespread faked court orders in the KwaZulu-Natal High Court in Durban following startling claims by a businessman in a court application”.
“The Witness has obtained affidavits by high court registry officials confirming that they did not sign documents used to liquidate Durban North-based businessman Ian Brakspear’s company in 2008.
“Brakspear, and others, believe if his case succeeds it will point to a wider, organised syndicate faking court orders.
“If true, the implications would be devastating for public trust in the judicial system.”
Brakspear lost his case and an appeal was refused.
Edward Zuma attacks Rupert for ‘capturing the judiciary’
Lewis sent the President a report in 2016 regarding this case, saying: “What was unusual in this investigation was the alleged facilitation of this conduct by the judiciary … and alleged forged high court orders, culminating in submissions to the chief justice of alleged trial fixing or court capture by banks.”
“This matter is now subject to a high level Hawks investigation,” he told Zuma.
Zuma’s son Edward may have been referring to this case last year in his attack on Rupert, just when banks started blacklisting the Guptas.
“Let it be known that Rupert has gone as far as capturing the judiciary of this country to ensure President Zuma’s removal from office through courts,” Edward Zuma said in a statement in 2016.
“Zuma claimed that Rupert is ‘the master’ behind a decision by the country’s major banks to cut business ties with companies linked to Zuma associates, the Guptas,” according to Business Tech.
Rupert hit back in the Sunday Times in May 2016, saying: “I wish to state openly that I have nothing to do with the Guptas and that the President appoints the judges, not I.
“The nonsense Edward Zuma persists in talking does not bother me insofar as it concerns me. But it has implications for our country’s foreign standing, for future investments and for the rule of law. Therefore, if this continues, at some stage I shall have to take legal action.”
FIC Bill delay to Guptas?
Lees told Fin24 on Thursday that he believed Zuma delayed dealing with the FIC Amendment Bill to help his friends, the Guptas.
“It would seem to us that the undeclared reason for President Zuma’s long delay in dealing with the Bill and then returning it to parliament was in order to give his close friends the Guptas time to manoeuvre their financial affairs before the terms of the Bill became law or better still if the warrantless searches were removed from the Bill altogether,” he said.
“The DA has submitted to the committee that senior legal counsel must now be obtained before any decision is made as to the constitutionality of or the final wording of this section of the Bill.”
The Guptas on Friday revealed “how they are victims of a planned, concerted and politically driven smear campaign” when they filed responding court papers to Finance Minister Pravin Gordhan’s 2016 court application.
Gupta-linked Oakbay Investments slammed Finance Minister Pravin Gordhan's court application regarding the company as being "superfluous" and "riddled with factual and legal errors".
Oakbay's court papers said that Gordhan's bid is unnecessary because there is no dispute regarding the matter. The Guptas also asked the court on Friday to "decline to grant the relief" sought by Gordhan and to dismiss the minister's application with costs.
"Furthermore, the timing of the minister’s application supports the Oakbay Group's suspicions that the application is politically motivated and is part of the minister’s ongoing plan to diminish the Oakbay Group and the Gupta family and to damage their hard-earned South African business," Oakbay said in a statement released Friday afternoon.