Corruption, White Collar Crime and Consumer News
- SA: Supreme Court of Appeal dismisses “Spy Tapes” Appeal
- SA: Qualifications crisis in SA
- SA: Minister argues Motsoeneng appointment legal
- SA: Aurora managers ordered to pay back millions
- USA: Standard Chartered fined US$300 million
- USA: PwC fined for role in money-laundering
- ASIA: Denel cleared of corruption charges in India
- ASIA: India competition authorities fine car parts cartel
- SOUTH AMERICA: Brazil accepts meat industry mergers
SA: Supreme Court of Appeal dismisses “Spy Tapes” Appeal
Following a court battle spanning five years between President Jacob Zuma and the Democratic Alliance’s (“DA”), the Supreme Court of Appeal (“SCA”) has dismissed an appeal by the President to keep the so-called “Spy Tapes” from being handed over to the DA, with costs. The tapes allegedly relate to phone calls made by President Zuma to the National Prosecuting Authority (“NPA”) and the NPA rejecting to drop corruption charges against him, in 2009.
The decision by the five panel appeal court bench came 10 days after counsel for the President, failed to successfully make an argument that validated keeping the “Spy Tapes” from the DA.
The SCA has ordered that the National Prosecuting Authority release the tapes to the DA within five days. Relevant related documents will go to a former appeal court judge, Noel Hurt, who has been tasked with determining the confidentiality of the documents.
SA: Qualifications crisis in SA
Despite a number of high profile matters relating to alleged fraudulent qualifications occurring over the past few months, the South African Qualifications Authority (“SAQA”) has said that South Africa does not have a qualifications crisis. SAQA has conducted over 12 000 verifications of qualifications in 2014, and only 0.6% of those qualifications were found to be fraudulent.
SAQA stated that the country is not facing a crisis, but it is concerned that companies are failing to verify employee’s qualifications. This lack of verification by employers could result in the perceived crisis. SAQA states that if it conducts a verification, and finds that a qualification is fraudulent, it informs the employers but also the South African Police Services.
SA: Minister argues Motsoeneng appointment legal
Despite a damning report by the Public Protector, Ms Thuli Madonsela, South African Communication’s Minister, Ms Faith Muthambi, has nonetheless appointed Mr Hlaudi Motsoeneng as chief operations officer of the South African Broadcasting Corporation (“SABC”).
The report by the Public Protector found that Mr Motsoeneng had lied about his matric qualifications, irregularly increased his own salary and dismissed employees who had a difference of opinion. Before a Parliamentary Committee, Ms Muthambi argued in favour of Mr Motsoeneg’s appointment and avoided questions by opposing MPs by arguing that the matter is sub judice.
An urgent application was then brought before the Western Cape High Court by the DA in which it argued that the Mr Motsoeneng is an “admitted liar and fraud”. Judgment in the matter has been reserved.
SA: Aurora managers ordered to pay back millions
In 2009, the Pamodzi gold mines in Springs and Orkney were provisionally liquidated and Aurora Empowerment Systems (“Aurora”) was appointed the liquidator.
At the time, Mr Sulliman Bhana and his son Faizel were appointed as “financial advisers” to Aurora. During the course of their involvement, they obtained investments and loans from the Indian community to keep the mine running. Eventually, the loans were repaid at one hundred percent interest but the miners’ salaries were not paid.
The matter was taken before the Pretoria High Court and Judge Bertlesmann ordered that the payments made for the loans be set aside, resulting in the financial advisors having to repay over R15 million to Aurora.
This is the first in a series of court orders aimed at recouping R35 million for Aurora, that was allegedly paid out unlawfully.
USA: Standard Chartered fined US$300 million
The New York financial regulator has found that Standard Chartered failed to uphold conditions of a 2012 settlement agreement in terms of which Standard Chartered failed to identify transfers flowing from areas of the world considered to be vulnerable to money-laundering. Consequently, the regulator has fined Standard Chartered approximately US$300 million for its failure to terminate the transactions and breaching the settlement agreement.
Standard Chartered is a London based firm but does much of its business in Asia. As a result of the latest fine and settlement agreement, Standard Chartered’s New York branch has been ordered to suspend the processing of payments for approximately 300 “high-risk” clients in Hong Kong.
USA: PwC fined for role in money-laundering
The financial services regulator in New York has fined Price Waterhouse Coopers (“PwC”) approximately $25 million for assisting the Japanese Bank of Tokyo-Mitsubishi (“the bank”) to cover up illegal transactions in a 2008 financial statement. It is alleged that the bank was implicated with money laundering for Iran, Sudan and Myanmar. For its role in the money laundering, the bank was fined US$250 million.
ASIA: Denel cleared of corruption charges in India
The Indian Ministry of Defence has lifted a nine-year blacklisting and ban on South African based Denel, following an investigation into corruption charges from 2002.
The Indian Central Bureau of Investigation blacklisted Denel in 2002 for alleged bribes and kickbacks to secure arms contracts with the Indian Army. The arms contract included the sale of approximately 1000 rifles and approximately 398 000 rounds of ammunition.
Denel has recently been advised that a decision has been taken by the Indian Ministry of Defence to de-blacklist the company.
ASIA: India competition authorities fine car parts cartel
The Competition Commission of India (“the Commission”) has issued a fine of approximately €318 million for the abuse of dominance by 14 vehicle manufacturers in India. The vehicle manufacturers include international companies BMW, Fiat, Ford, General Motors, Honda, Maruti Suzuki, Mercedes Benz, Nissan, Skoda, Toyota and Volkswagen and local Indian car manufacturers, Tata Motorsand and Mahindra & Mahindra.
The Commission initiated its investigation, following a complaint in 2011, and found that the vehicle manufacturers had abused their dominant positions in the spare parts and repair markets by preventing independent repairers to enter the market by refusing to sell them parts. Further, the Commission found that the manufacturers prevented consumers from utilising the services of the independent repairers by voiding warranties on vehicles should the consumer have used the services of the independent repairer.
The fines issued by the Commission represent 2 per cent of each company’s turnover for the past three years. Tata received the highest penalty of €169 million.
SOUTH AMERICA: Brazil accepts meat industry mergers
Brazil’s Administrative Council for Economic Defense (“CADE”) has approved, with restrictions, the acquisition of Minerva’s cattle slaughtering units by BFR.
CADE found the transaction to be potentially pro-competitive, in the bovine fresh meat market, as it would enable BFR to compete with market leader, JBS. On the other hand, CADE was concerned that the transaction would restrict competition in other markets as CADE is concerned about BFR’s growing market dominance. BRF already controls, approximately, 80% of market in the meatballs, chicken processed meat, healthy cold cuts (turkey breast and blanquettes) and bacon markets.
In order to remedy the concerns, CADE has ordered the companies to divest assets to prevent anti-competitive conduct and that the merger is delayed until the conditions have been met.