Estina dairy project: Corruption case against Mosebenzi Zwane, co-accused postponed to January 2023

The corruption case against former Mineral Resources Minister Mosebenzi Zwane and his 16 co-accused has been transferred to the Bloemfontein High Court.

Estina dairy farm scandal

Zwane and his co-accused, including nine companies, on Wednesday, appeared briefly in the Bloemfontein Magistrates’ Court in connection with the controversial R280 million Estina dairy farm project in the Free State.

Zwane – who was the MEC for agriculture and rural development at the time of the project – faces charges of fraud, theft, corruption and money laundering along with his co-accused over the alleged looting of the Free State Department of Agriculture and Rural Development through a company called Estina.

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His co-accused include two alleged Gupta associates, former Sahara employee Ugeshni Govender and Ronica Ragavan, who is a former director of Gupta owned company, Islandsite Investments.

The other co-accused who were previously arrested in 2018 include – among others – former Free State Agriculture and Rural Development head Peter Thabethe, ex-Free State Agriculture chief financial officer Seipati Dlamini, the former acting head of the department Takisi Masiteng and the former sole director of Estina dairy farm, Kamal Vasram.

Arrests and bail

Zwane and Govender were both arrested in late September and released on bail of R10 000 each. The State did not oppose their bail applications.

Ragavan was warned to re-appear in court on Wednesday. She was previously arrested in this matter in 2018. 

During their brief court appearance on Wednesday, the State furnished the accused with further particulars relating to their case and the matter was postponed to 25 January 2023, to be heard in the Bloemfontein High Court.

Case background

The Estina dairy project has been embroiled in allegations of state capture after it emerged that the entire project was allegedly designed to extract funds from the state and was a front for money laundering and the source of funds for the Guptas’ lavish wedding at Sun City resort in 2013.

According to the National Prosecuting Authority’s Investigating Directorate (ID), on 5 July 2012, Estina entered into an agreement with the Free State Department of Agriculture to establish and implement a dairy farm project in Vrede to benefit previously disadvantaged farmers and to uplift the people of the Vrede area.

In terms of the agreement, Estina was to provide a capital injection of R228 million. Paras Dairy, a company incorporated in India, was presented as Estina’s partner in the Vrede Dairy Project.

“In the charge sheet, the Investigating Directorate alleges that terms of the agreement between the Department of Agriculture and Estina the beneficiaries were to own 51% of the AGRIBEE (special purpose vehicle) entity and the remaining shares were to belong to Estina. The said agreement also contained a rent-free lease clause in favour of Estina for a period of 99 years.

“The agreement further stipulated that the department was to contribute R342 million including VAT over a period of three years. Estina received R280 million from July 2012 to April 2014. 

“Investigations also revealed that no proper tender procedures were followed with regard to the decision to fund the proposed Vrede Dairy Project. Estina did not adhere to its obligations in terms of the agreement as only the department paid its contribution into bank accounts held by Estina,” said ID national spokesperson Sindisiwe Seboka in a statement.

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