The enablers of state capture

Vivien Natasen, the sole director and shareholder of logistics, transport, advisory, information technology company Neo Solutions, testified at the Zondo Commission of Inquiry into State Capture on Friday.

Natasen was expected to shed light on the R9.9 million held by Neo on behalf of Brian van Wyk, then commercial manager of SA Express, which had been paid into Neo’s bank account by Koroneka Trading and Projects.

Koroneka director Babadi Tlatsana implicated Natasen when she testified to the commission a couple of weeks ago.

The right to cross-examine

Heated discourse ensued between Natasen’s legal representative Andre Pienaar and inquiry evidence leader Kate Hofmeyr in regard to Natasen’s right to cross-examine Tlatsana, and the correct procedure to be followed in making an application to do so.

The rules of the commission require that an application to cross-examine a witness must identify the parts of the witness’s testimony that is disputed or denied, and the grounds on which the application is made. Natasen’s application did not provide the grounds for the dispute or denial, and the legal team was accordingly of the view that the application was deficient.

Pienaar took issue with this, and inferred that the legal team did not want the implicated party to be able to cross-examine a witness. Hofmeyr, reading from the actual application, demonstrated that it lacked grounds and firmly rebutted Pienaar’s allegation that these steps are designed to keep implicated persons away from cross-examining witnesses as “quite frankly false”.

Background

Natasen, a CA(SA), describes himself as a businessman with substantial experience, including running Neo Solutions. He was a partner at Deloitte and left in 2003 to set up his own business.

In describing his relationship with Van Wyk, he said: “He was a CA(SA), he was business orientated, and we gelled.”

Van Wyk was good with business plans, and Natasen saw him as a potential business partner.

In November 2015 Van Wyk told Natasen that he would be receiving a dividend of R9.9 million from a private venture, and didn’t want to reveal those funds to anyone. He also wanted to use those funds in a business venture, particularly in Neo’s future farming venture.

Tracking the flow of funds

The R9.9 million was paid into Neo’s Nedbank bank account by Koroneka in November 2015 – R5 million on November 11, and R4.9 million on November 12.

A month later, in December 2015, R7 million was paid back on the instruction of Van Wyk to Batsamai Investment Holdings – R4 million on December 11, and R3 million on December 22.

Van Wyk said he required the money to buy a property but didn’t want the money to be transferred to him personally. Natasen assumed the company Van Wyk indicated would be his property investment company, but did not check this with him.

Van Wyk requested that an amount of R300 000 be paid to him in cash on January 4, 2016.

On November 14, 2015, an amount of R300 000 had been transferred from Neo’s Nedbank account to its Standard Bank account, with the reference ‘Neo Solutions loan’. Natasen could not explain why that reference was given.

On Van Wyk’s instructions, payments were made from Neo’s Standard Bank Account to Batsamai in March 2016 – R1.4 million on March 10, and R1.2 million on March 29.

Natasen asserted that neither Neo nor he benefitted from these transactions.

Holding money for a friend

Natasen testified that when Van Wyk asked him to hold this money on his behalf in November 2015, various explanations were given to him – Van Wyk did not want his employer (SA Express) to know that he was earning money from private business ventures, it may create jealousy, and Van Wyk was concerned about a lifestyle audit. Further, Van Wyk had claimed that he was serving out his notice.

Natasen asked for confirmation that the funds were above board, had nothing to do with SA Express nor any other state company, and that the money was clean.

Natasen didn’t see anything strange or suspicious about holding R9.9 million in his bank account on behalf of a friend.

The chair and Hofmeyr probed Natasen’s actions – and the questions he didn’t ask.

There were various inconsistencies and discrepancies in Natasen’s evidence that were not adequately resolved:

• Discrepancies between the dates of the future farming venture, which was to kick off in 2017 yet the so called investment funds were received in 2015 and paid out by March 2016. None of it made sense.
• The Neo financial statements were prepared in accordance with Generally Accepted Accounting Practice (Gaap), which was no longer applicable in 2016.
• Natasen couldn’t remember who the donations were paid to.
• The commission had issued a summons to Natasen for various documents to be submitted. Natasen provided a convoluted explanation as to why this has not yet been complied with.
• There were discrepancies in the financial statements.
• Incorrect accounting entries had been processed; for example, the R9.9 million had been allocated to Natasen’s shareholders’ loan account.
• Even though Natasen claimed that none of the R9.9 million had been utilised by Neo, as at February 2016 (financial year) the balance of R2.6 million was not in the bank statements. Note that R300 000 was paid out in March.
• There was no explanation as to why R9.9 million was paid into Neo’s Nedbank bank account, yet the final balance of R2.3 million was paid out of Neo’s Standard Bank Account.

At the start of the day’s proceedings, Hofmeyr spoke of the enablers of state capture, saying that companies that assist in the movement of funds are also enablers. At the end of the day, she questioned Natasen on his knowledge of money laundering and the concealing and disguising of the sources of funds.

Should Natasen reasonably have known that these proceeds were from unlawful activities? Was Natasen deficient, negligent, or complicit?

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