TWO DIRECTORS AND THREE MINING COMPANIES LINKED TO THE GUPTAS CONVICTED OF FRAUD AND MONEY LAUNDERING ON OVER R107.5 MILLION IN MINE REHABILITATION FUNDS

The National Director of Public Prosecutions (NDPP), Adv Andy Mothibi, together with the Acting Investigating Director of the Investigating Directorate Against Corruption (IDAC), Adv Ntuthuzelo Vanara, welcomes the conviction of two company directors and three mining companies for fraud and money laundering, involving R107.5 million linked to two mine rehabilitation trusts.

This follows the judgment by the Gauteng Local Division of the High Court, Johannesburg, convicting Ronica Ragavan, Pushpaveni Ugeshni Govender, Optimum Coal Mine (Pty) Ltd, Koornfontein Mines (Pty) Ltd and Tegeta Exploration and Resources (Pty) Ltd for the commissioning of the offences.

The state argued strongly to convince the court that the money that was held in a trust, as the law requires, to repair environmental damage at the Optimum and Koornfontein coal mines in Mpumalanga was unlawfully utilised to pay mining contractors and other third parties.

Judge Mudunwazi Makamu convicted the accused on four counts as he highlighted the role of the accused in the commissioning of the crime.

•Count 1, fraud (R7.5 million, Optimum Mine Rehabilitation Trust): Ragavan, Govender, Optimum Coal Mine and Tegeta were found guilty on this charge.

•Count 4, money laundering (R7.5 million), in contravention of section 4 of the Prevention of Organised Crime Act 121 of 1998: Ragavan, Govender, Optimum Coal Mine and Tegeta were found guilty on this charge.

•Count 5, fraud (R100 million, Koornfontein Rehabilitation Trust): Ragavan, Govender, Koornfontein Mines and Tegeta were found guilty on this charge.

•Count 8, money laundering (R100 million), in contravention of section 4 of the Prevention of Organised Crime Act: Ragavan, Govender, Koornfontein Mines and Tegeta were found guilty on this charge.

Ragavan was a director of Koornfontein Mines and Tegeta at the time the offences were commissioned, while Govender was a director of Optimum Coal Mine and, from 26 April 2016, a trustee of both rehabilitation trusts. All the accused had pleaded not guilty.

Meanwhile, the former Deputy Director General of the then Department of Mineral Resources Maleatlana Joel Raphela was found not guilty on all counts against him.

The offences committed went against set regulations for holders of mining rights to set aside money to rehabilitate the land they mine. The National Environmental Management Act 107 of 1998 and its financial provision regulations require that this money be kept available for that purpose alone.

During trial, the State highlighted that Tegeta bought Optimum Coal Mine and Koornfontein Mines from Glencore, and the sale was implemented on 08 April 2016. With the mines, came control of their two rehabilitation trusts. On 01 February 2016, the trusts held about R1.44 billion (Optimum) and R278.5 million (Koornfontein).

In relation to Optimum Mine Rehabilitation Trust, it emerged that on 23 May 2016, R7.5 million was transferred from the trust’s Standard Bank account to an Optimum Coal Mine account. Ragavan and Govender signed the letter asking the bank to make the transfer. The State’s case was that the bank was falsely informed that the transfer was authorised and the money was for rehabilitation work. On the same day, R7.5 million was combined with R9.5 million from Tegeta, which ultimately formed part of a R26.4 million payment to a contractor, Klipbank Mining, for underground mining done in April 2016. It was established that rehabilitation work was done with the funds, and it was never repaid to the trust.

In relation to the Koornfontein Rehabilitation Trust, the State highlighted to the court that in May 2016 the trust’s R280 million was moved from First National Bank to the Bank of Baroda. On 05 May 2016, the Department of Mineral Resources granted Tegeta approval in principle to utilise the trust funds for concurrent rehabilitation, subject to three conditions. The version of the letter handed to the Bank of Baroda did not contain the conditions.

Subsequently, on 06 June 2016, R170 million of the trust’s funds was placed in a fixed deposit and pledged as security for a R150 million loan facility to Koornfontein Mines. The bank received written undertakings that the loan would be utilised only to rehabilitate the mine.

The bank paid out R100 million on 13 June 2016, and within a period of two days, the money had moved through Koornfontein Mines and Tegeta accounts to a Tegeta account at the State Bank of India. An amount of R67.8 million was subsequently paid to two mining contractors, Klipbank Mining and Coalcor Mining. A further R30 million was sent back to the Bank of Baroda and paid on to other companies, including Koornfontein Mines and Optimum Coal Mine. It was discovered that none of the R100 million was utilsed for rehabilitation, and no rehabilitation work was done at Koornfontein. The trust’s R170 million stayed pledged to the bank, and at risk, for a year.

The matter was postponed to 01 December 2026 for sentencing proceedings and the court extended bail for Ragavan and Govender until the matter is finalised.

“Rehabilitation trusts exist to ensure that surrounding communities are not left to carry the cost of the damage mining leaves behind. We commend the prosecution and investigation team for securing such a crucial conviction. We remain committed in the fight against corruption”, remarked Adv Mothibi.

Enquiries:

Henry Mamothame

IDAC Spokesperson