S v Pouroulis and Others

• Jurisdiction: South Africa
• Judge: Stegmann J
• Judgment Date: 05 November 1990
• Citation: 1993 (4) SA 575 (W)
• Hearing Date: 05 November 1990
• Court: Witwatersrand Local Division

Stegmann, J.:

At the close of the State case all five accused before me have applied for their discharge in terms of s 174 of the Criminal Procedure Act 51 of 1977 on all counts in the indictment on the ground that there is no evidence on which a reasonable man, acting carefully, might convict any of the accused on any count. D

I was referred in this regard to a number of the cases which deal with the test applicable at this stage. They included: R v Mall and Others (1) 1960 (2) SA 340 (N); S v Ostilly and Others 1977 (2) SA 104 (D); S v Shuping and Others 1983 (2) SA 119 (B); S v Mpetha and Others 1983 (4) SA 262 (C). I was also referred to other cases mentioned in those I have E cited. There was no difference between counsel as to the principles now to be applied.

Mr Attwell, on behalf of the State, emphasised that this is not the stage for the evaluation of the relative credibility of witnesses. The evidence of a State witness is only to be ignored at this stage if he has been shown to be so untrustworthy that no reasonable court could be F expected to rely on his evidence.

There was some criticism of some of the State witnesses. However, I say at once that none of the State witnesses fell into the category of witnesses whose evidence could be rejected at this stage of the proceedings.

The outcome of this application, in my view, depends to a great extent on certain disputed questions of law to which I shall come in due course. G I shall start with the indictment, the accused, a number of facts that are not disputed, and the interpretation of s 226 of the Companies Act 61 of 1973, before coming to the essential question of whether there is any evidence on which any of the accused might be convicted, taking due account of any indications that deficiencies in the State case may be made H good by one or more of the accused against any of the other accused.

In terms of the amended indictment, the five accused have been indicted on seven counts of fraud (numbered from 1 to 7), and a further 59 counts of theft (numbered from 8 to 66). These offences are alleged to have been committed on specified dates during the period from 31 August 1987 to 25

I August 1988. As alternatives to 54 of the theft counts (the excluded five counts being Nos 21, 53, 58, 61 and 63) accused Nos 1, 3, 4 and 5 also face counts of contravening s 226(4)(b) of the Companies Act 61 of 1973.

The original indictment served on or about 25 August 1989 is now of little more than historical significance. Its only remaining relevance is that it formed the basis for requests for further particulars delivered on J behalf

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A of each of the accused in September and October 1989. On 16 October 1989 the State delivered further particulars in reply to each of the requests. Such replies continue to define the ambit of the State case (so far as the replies remain relevant after the subsequent amendments to the indictment).

B The amended indictment bears the registrar's date stamp of 7 September 1990. Annexure A to the amended indictment is a table with nine columns in which the essential particulars of all 66 counts have been tabulated.

On 12 September 1990 accused 1, 2, 4 and 5 requested further particulars to the amended indictment. In compliance with my order made on 19 C September 1990, the State, on 21 September 1990, furnished further particulars. Accused 3 (who is represented separately from the other accused) also requested further particulars thereto. Again, in compliance with my order, the State furnished replies.

On 24 September 1990 the five accused were called on to plead to the D indictment as thus amplified. They all pleaded not guilty to all counts.

Accused 1, 2, 4 and 5 were represented by Mr C Z Cohen SC, Mr S F Burger SC and Mr M van der Nest. Mr Cohen handed in as exh D a statement pursuant to s 115 of Act 51 of 1977, signed by accused 1, 4 and 5, indicating in broad terms the nature of certain of their defences.

E Accused 3 was represented by Mr W H Trengove SC and Mr J M Suttner. Mr Trengove handed in as exh E a statement pursuant to s 115, signed by accused 3, indicating briefly the nature of his defences.

I shall indicate the broad issues that were thus defined after first identifying the accused and some of the relevant circumstances surrounding them.

Accused 1 F

Accused 1 is Loucas Christos Pouroulis. He is cited in the indictment as a 50-year-old man resident in Bryanston, Sandton. He is qualified as a mining engineer. He went on to become an entrepreneur on a substantial scale.

G During the period covered by the indictment (ie 31 August 1987 to 25 August 1988), accused 1 was the holder of 97% of the issued shares of Salene Mining (Pty) Ltd which is accused 2. The remaining 3% of accused 2's shares were held by Oscar Investments (Pty) Ltd, a company which gave a power of attorney to accused 1 to act on its behalf as shareholder of accused 2. Accused 1 therefore controlled accused 2. He was also the H chairman of its board of directors.

Accused 1 was at that time also the chairman of the board of directors of, and a significant shareholder in, a company which was then named Lefkochrysos Ltd. This company has been referred to by the convenient short name of 'Lefko' and I shall adopt that usage.

I It will be necessary to deal with some of Lefko's history. At this stage I mention only that the alleged misrepresentations on which the seven counts of fraud are based relate to the affairs of Lefko; that the 59 counts of theft relate to funds totalling R72 740 000 that were held by Lefko after making a public share issue on the Johannesburg Stock Exchange, and which were transferred away from Lefko from time to time; J and that the

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A 54 alternative counts of contravening s 226(4)(b) of the Companies Act relate to the same transfers of Lefko's funds (other than the transfers dealt with in counts 21, 53, 58, 61 and 63). As a matter of history, and not entirely irrelevant to the indictment, there is no dispute about the fact that all of the funds transferred away from Lefko, and giving rise to B the counts in the indictment, were eventually repaid to Lefko by Salene Mining (Pty) Ltd.

Accused 1 was, between August 1987 and August 1988, also a shareholder in and a director of a number of other companies concerned in the present matter. They are:

1.

C Golden Dumps (Pty) Ltd

From August 1987 to August 1988 accused 1 held 100% of the issued share capital of this company. Duly certified copies of documents in the companies registration office relating to this company were handed in as exh H. They include the memorandum and articles of D association, and the contents of the company's register of directors, auditors and officers. It appears therefrom that during the relevant period the directors of Golden Dumps in addition to accused 1, were accused 3, accused 4 and accused 5, R L Johnson, H J Reeders, E G Fairon, H B Miller, H A G Slater and R P Smith. On 1 May 1988, T A E Cross, J D Adendorff and P J Ledger joined the board and on 15 June 1988 J M Pattison.

2.

Golden D Construction (Pty) Ltd

From August 1987 to August 1988 accused 1 held 100% of the issued share capital. Accused 1 was also the sole director.

3.

F Golden Dumps Research (Pty) Ltd

From August 1987 to August 1988 accused 1 held 100% of the issued share capital. In the year from 1 July 1987 to 30 June 1988 the directors were accused 1, accused 5, H J Reeders, R L Johnson, H A G Slater and E P Kordas.

4.

G Orbrum Investments (Pty) Ltd

From August 1987 to August 1988 accused 1 held 100% of the issued share capital. Accused 1 was the sole director.

5.

Better Sales (Pty) Ltd

From August 1987 to August 1988 accused 1 held 76,4% of the issued H share capital. Better Sales in turn held, during that period, 51% of the issued share capital of Dawn Diamond Co Ltd. In the year from 1 July 1987 to 30 June 1988 the directors of Dawn Diamond Co Ltd were accused 1, accused 4, accused 5, H J Reeders, H B Miller, E G Fairon, P J Ledger (Ledger being appointed from 25 April 1988 only).

6.

I Consolidated Modderfontein Mines Ltd ('Cons Modder')

From August 1987 to August 1988 accused 1 dealt in this company's shares, his own shareholding varying between 4% and 6,5% of the issued ordinary shares and including, as from 29 June 1988, 2,3% of the issued ordinary shares. From 29 June 1988 Salene (accused 2) held J 0,01% of the issued ordinary shares of Cons

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A Modder and 25,3% of its issued S ordinary shares. Accused 1 was the managing director of Cons Modder.

As appears from the company's annual report for the year to 30 June 1988 (exh AR) Cons Modder had four wholly-owned subsidiaries, one of which was Springs Dagga Gold Mines Ltd, a company mentioned in B counts 9 and 15.

Duly certified copies of certain of the documents at the companies registration office relating to Cons Modder were handed in as exh I. They included the memorandum and articles of association and the contents of the register of directors, auditors and officers.

It appears from exh AR that, at the beginning of the financial C year on 1 July 1987, the company's position was that it had just completed a year in which it had earned an after tax income of R19,3 million (the equivalent figure for the whole Cons Modder group being R33,1 million) but that it nevertheless found itself in an illiquid position, having current liabilities of R10 million and current D assets of only R8,5 million (the equivalent figures for the whole Cons Modder group being current liabilities of R33,3 million and current assets of only R13,1 million). Cons Modder had an obvious need for liquid funds. Its position in this regard worsened. By the year-end on 30 June 1988, the position was that the company had earned an after tax income of only R15 000 (the equivalent figure for ...