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Barend B.
Barend B., Legal Consultant
Category: South Africa Law
Satisfied Customers: 1364
Experience:  BLC LLB (Pret) LLM (Augsburg)
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Is my reference to the Prevention and Combating of Corrupt

Customer Question

Is my reference to the Prevention and Combating of Corrupt Activities Act, no. 12 of 2004 flawed and why?Please refer this question to Freddie Lombard. On the 7 April 2017, Freddie responded to a related issue.I have reported four criminal cases in terms of the Prevention and Combating of Corrupt Activities Act, No. 12 of 2004 to the Commercial Crime Unit of the Hawks.The first case was for an amount of + - R100 million.
The second case was for an amount of R147 million
The third case was for an amount of R893 million
The forth case was for R214 million plus R52 million.In my 1st to 3rd affidavits in my opening paragraphs I used the following wording, “I report my suspicions in terms of the Prevention and Combating of Corrupt Activities Act 12 of 2004”. In my second affidavit of the forth case I changed the wording slightly to “ I am reporting my suspicions in terms of section 34 of the Prevention and Combating of Corrupt Activities Act, No. 12 of 2004”.All the above cases were also reported to the Financial Services Board, Independent Regulatory Board for Auditors and the South African Reserve Bank. After submitting my fourth Affidavit in the fourth case to the South African Reserve Bank I received a letter inter alia stating the following: “We suggest that you reconsider your interpretation of the provisions of section 34 of the Prevention and Combating of Corrupt Activities Act, 12 of 2004 in light of your reliance thereon in respect of the judicial processes that you are pursuing” unquote.My wording used is consistent with the advice received from a lieutenant Colonel in the Commercial Crime Unit at the DPCI Head Office in Silverton.
Submitted: 2 months ago.
Category: South Africa Law
Expert:  CaseLaw replied 2 months ago.

Hi there and thank you for your question,

I will try to assist you with your legal question but please feel free to ask as many follow up questions in order to clarify your initial question. If you have a new question, you must please open a new thread.

Legally, I think what they are saying is that they don't think that section 34 of the Act is applicable, or that the actions which you are reporting fall under section 34.

Perhaps you can give me a little more background?

regards,

CaseLaw

Customer: replied 2 months ago.
During 1997 Nedcor Bank Ltd now Nedbank Ltd, allegedly paid R145 million (in round numbers) into the bank account of the Nedcor Medical Aid Scheme now the Nedgroup Medical Aid Scheme (Nedmed) for the credit of the Pre-Funding Reserve Account. This was a contractual obligation recorded in a contract. It is the responsibility of the Pre-Funding Reserve to subsidise the monthly Nedmed contributions of the pensioners of Nedbank. The active employees contribute an extra amount monthly to the Pre-Funding Reserve. As per the Cashflow Statement of Nedmed, there is no evidence that this amount was actually paid in cash. There is circumstantial evidence that a third party transferred R214 million by means of an asset transfer into Gross Contributions. From Gross Contributions an amount of R162 million (in round numbers) was transferred to the Pre-Funding Reserve Account. I alleged that the R214 million in assets was transferred unlawfully from the Nedcor Pension Fund to Nedmed into Gross Contributions. Apparently, this was common practice at the time. The FSB stopped and reversed some of them. I also alleged that Nedcor Bank Ltd took a contribution holiday of + -R52 million, i.e. they deducted the contributions from the remuneration of the employees, as agent and failed to pay the money as agent over to Nedmed. I alleged that this is theft of employee remuneration. Nedbank employees are remunerated on a Total Cost to Company basis. This is the summarized version of part 1 of the story.The second part of the story is the short version. During 2013, Nedbank Ltd applied to the High Court in Pretoria to transfer the assets representing the Pre-Funding Reserve of + - R893 million from Nedmed to an annuity policy at Old Mutual Life in the name of Nedbank Ltd. Nedmed and the CMS failed to defend the application. I alleged that the Nedbank Head of Legal Services misrepresented the facts on a planned basis (willfully) in his affidavit to the court, i.e. he committed perjury. The Head of Legal Services is an Officer of the High Court. The bot***** *****ne is that the Judge granted the draft court order and during June 2014 the assets were transferred to Old Mutual into an annuity policy an according to the Nedbank AFS Old Mutual is paying the so called subsidy to Nedmed.Originally I submitted my first affidavit regarding the R893 million during 2015 to SAPS, the basis of the complaint was different and I have decided to withdraw the complaint and to submit a fifth affidavit to my Jan 2017 complaint. So far the above story is recorded in four affidavits and reported to the Commercial Crime Unit of the DPCI. I have been informed by the Investigating Officer that the prosecutor is working on the investigation plan
Expert:  CaseLaw replied 2 months ago.

According to section 34(1) of the Act, any person who holds a position of authority (defined in section 34(4) of the Act), who knows or ought reasonably to have known or suspected that any other person has committed an offence (of corruption) in terms of sections 3 to 16 or 20 to 21 of the Act or theft, fraud, extortion, forgery or uttering of a forged document involving an amount of R100,000.00 or more, must report such knowledge or suspicion or cause such knowledge or suspicion to be reported to any police official.

The following are the people who are considered to hold a position of authority:

• the Director-General or head, or equivalent officer, of a national or provincial department;

• in the case of a municipality, the municipal manager appointed in terms of section 82 of the Local Government: Municipal Structures Act, 1998 (Act No. 117 of 1998);

• any public officer in the Senior Management Service of a public body;

• any head, rector or principal of a tertiary institution;

• the manager, secretary or a director of a company as defined in the Companies Act, 1973 (Act No. 61 of 1973), and includes a member of a close corporation as defined in the Close Corporations Act, 1984 (Act No. 69 of 1984);

• the executive manager of any bank or other financial institution;

• any partner in a partnership;

• any person who has been appointed as chief executive officer or an equivalent officer of any agency, authority, board, commission, committee, corporation, council, department, entity, financial institution, foundation, fund, institute, service, or any other institution or organisation, whether established by legislation, contract or any other legal means;

• any other person who is responsible for the overall management and control of the business of an employer; or

• any person contemplated in paragraphs mentioned above, who has been appointed in an acting or temporary capacity.

Which category of persons do you fall into?

Customer: replied 2 months ago.
At the time when the proposed plan was presented to Nedmed members during 2006, I was a Senior Manager at Nedbank. I also have an email confirmation from a Lieutenant Colonel of the DPCI Head Office confirming that I have complied correctly with my obligations in terms of section 34 of the Prevention and Combating of Corrupt Activities Act.
Customer: replied 2 months ago.
The current value of the R214 million and R52 million escalated at 10 % per annum is now R1,44 billion and R385 million.
Customer: replied 2 months ago.
The value of the Old Mutual annuity policy as at 31 Dec 2016 is R1,343 billion. The amounts are two separate issues based on my argument that Nedbank Ltd never contributed a cent to the Pre-Funding Reserve Account.
Customer: replied 2 months ago.
Technically, I received an answer from the lawyer. It does not solve my problem. The rhetorical question is whether the Lieutenant Colonel at the DPCI is correct. I have decided to discuss the stalemate with the prosecutor (who is an Advocate) handling the case.