S v Shaik and Others

• Jurisdiction: South Africa

S v Shaik and Others
2007 (1) SACR 247 (SCA)

2007 (1) SACR p247

Citation	2007 (1) SACR 247 (SCA)
Case No	62/2006
Court	Supreme Court of Appeal
Judge	Howie P, Mpati DP, Streicher JA, Navsa JA and Heher JA
Heard	September 25, 2006; September 26, 2006
Judgment	November 6, 2006
Counsel	J J Gauntlett SC (with him F van Zyl SC) for the appellants.; W J Downer SC (with him A L J Steynberg and G D Baloyi) for the respondent.

Flynote : Sleutelwoorde B

Corruption — Contravention of s 1(1)(a)(i) and (ii) of Corruption Act 94 of 1992 — Businessperson and corporate entities paying highly placed politician to use influence for their commercial benefit — Whether word 'duty' in s 1(1)(a)(i) of Corruption Act encompassing statutory obligations such as those imposed by ss 136(2) and 96(2) of Constitution of C Republic of South Africa, 1996, or whether word referring in more limited way only to functions assigned to individual to whom undue benefit given or offered — Had Legislature intended such restrictive meaning, it would have used 'function' rather than 'duty' — Legislature merely restricting ambit of previous legislation and of common-law bribery to extent that it D would not be offence if act sought to be influenced bore no relationship at all to powers and duties of person concerned — Therefore, if appellant giving benefits to politician with intention of influencing him to commit, or omit to do, any act in relation to his duties in terms of ss 96(2) or 136(2) of Constitution, then appellant committing offence in terms of s 1(1)(a)(i) of Corruption Act. E

Evidence — Admissibility — Hearsay evidence — Admissibility in terms of s 3 of Law of Evidence Amendment Act 45 of 1988 — Factors to be considered in terms of s 3(1)(c) — Given high probative value of evidence and small risk of prejudice to appellants, admission of hearsay in interests of justice despite fact that its admission sought in criminal proceedings and F that evidence of vital importance to State's case.

Fraud — Elements of — Prejudice — Irregular writing off of debt in company's books of account constituting false representation — No evidence that false representation communicated to company's bankers, revenue authorities or shareholders — However, fact that it had been communicated to company's G

2007 (1) SACR p248

own accountant and to auditor sufficient to cover crime of fraud even A though accountant herself may not have been prejudiced by false representation — Once false representation made to company's accounting staff potential danger existing that fraudulent documents might be passed on to shareholders, revenue service and other entities with interest in company's business. B

Sentence — Corruption — Appeal against 15-year sentence on two counts of contravention of s 1(1)(a) of Corruption Act 94 of 1992 — Appellant making payments to, and arranging bribe for, prominent politician in return for exercise of politician's influence in favour of appellant's businesses — Payments to politician over period of more than five years C made calculatingly — Appellant subverting friendship with politician into relationship of patronage designed to achieve power and wealth — Appellant seeking out people eager to exploit politician's power and influence and colluding with them to achieve mutually beneficial results — Seriousness of offence of corruption — Corruption offending against rule of D law and principles of good governance, lowering moral tone of nation, and threatening constitutional order — No fault in reasoning of trial Court that no substantial or compelling circumstances existing that would justify imposition of sentence other than prescribed minimum of 15 years' imprisonment — Appeal dismissed. E

Headnote : Kopnota

The first appellant, a businessperson, and his ten co-appellants, companies which he controlled or in which he had a major interest, were convicted in the High Court on various counts of corruption and fraud. The first count alleged a contravention of s 1(1)(a)(i) and (ii) of the Corruption Act 94 of 1992, in that the first appellant and one or other of the corporate appellants F had, over a period of nearly seven years, made some 238 payments either directly to, or for the benefit of, one Z, a prominent politician. The payments had been made as an inducement to Z to use his name and political influence for the benefit of the first appellant's businesses ('the Nkobi group') or as an ongoing reward for having done so. The second count was one of fraud. It was alleged that an amount in excess of R1,2 million had been written off irregularly in the 1998 - 1999 financial statements G of the Nkobi group of companies, to which group most of the corporate appellants belonged. It was common cause that the amount was written off on the false pretext that it represented expenses incurred by the Nkobi group in a card-form driver's-licence project in which it had an interest. It was alleged that this misrepresentation concealed the true H purpose of the writing-off, which was to extinguish debts owed by certain of the appellants to the fourth appellant. This fact had been withheld from shareholders, creditors, the bank that provided overdraft facilities, and from the South African Revenue Service. The third count was of a contravention of s 1(1)(a)(i) of the Corruption Act. The first appellant and certain of the corporate appellants had participated with a foreign company in a consortium I that had acquired a stake in the provision of an armaments suite for naval corvettes (part of the South African government's arms-acquisition programme (the arms deal)). It was alleged that, when it appeared that an inquiry would be held into aspects of the arms deal, the first appellant, acting on his own behalf and that of the corporate appellants, had arranged for the payment of a bribe by the foreign company to Z, in return for which Z would shield the company from the inquiry and thereafter would promote J

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its interests in South Africa. The first appellant was convicted on all three A main counts; various of the corporate appellants were convicted on the main counts and others on alternative counts.

Upon conviction the first appellant was sentenced to 15 years' imprisonment on each of the first and third counts, and to three years' imprisonment on the second count. These sentences were ordered to run concurrently. The corporate appellants were sentenced to fines in various amounts. Leave to B appeal against the convictions and sentences was granted in restricted terms by the trial Court, which terms were extended in certain instances by the Supreme Court of Appeal on application by the appellants.

Count 1

Held, that it was not in dispute that the first appellant had given Z benefits which were not legally due at a time when Z held public office. It was in dispute, C however, that such benefits had been given corruptly, the appellants contending that the benefits had not been given with the intention of influencing Z to commit, or omit to do, any act in relation to a power conferred on him or a duty with which he had been charged. Sections 136(2) and 96(2) of the Constitution of the Republic of South Africa, 1996, D provided, respectively, that a Member of an Executive Council (MEC) of a province and a member of the Cabinet (which offices Z had held at material times) might not undertake any other paid work; act in a way that was inconsistent with his office or expose himself to the risk of a conflict between his official responsibilities and his private interests; or use his position to enrich himself or improperly benefit any other person. The question to be decided was whether the word 'duty' in s 1(1)(a)(i) of the Corruption Act E encompassed statutory obligations such as those imposed by ss 136(2) and 96(2) of the Constitution, or whether it referred in a more limited way only to the functions assigned to the individual to whom the undue benefit had been given or offered. Having regard to the history of legislative and common-law provisions against corruption, it could not be said that the F Corruption Act intended 'duty' to refer restrictively to 'function'. Had the Legislature intended such a restrictive meaning, it would have used the latter word rather than the former. The Legislature had merely restricted the ambit of previous legislation and of common-law bribery to the extent that it would not be an offence if the act sought to be influenced bore no relationship at all to the powers and duties of the person concerned, but not G to the extent that would be brought about by the interpretation of 'duty' to mean 'function'. It followed, therefore, that, if the first appellant had given benefits to Z with the intention of influencing him to commit, or omit to do, any act in relation to his duties in terms of ss 96(2) or 136(2) of the Constitution, then he had committed an offence in terms of s (1)(1)(a)(i) of the Corruption Act. (Paragraphs [65] - [74] at 275c - 278g.) H

Held, further, that the true purpose of the payments to Z - two of which the appellants contended had been donations to the political party of which Z was a leading member - was relevant to the question of whether they were made with the unlawful intention of influencing him. Evidence adduced by the State in regard to the two payments that the first appellant claimed to have regarded as donations to the political party showed conclusively that I he could not have regarded them as such. First, Z had signed an acknowledgment of debt which included the sum of both these payments; the first appellant could therefore not have regarded them as an irrecoverable political donation. Secondly, while the first appellant had indeed made donations to the political party, none of these included the two...