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Former Deloitte director and ex-executive director of Agri SA, Omri van Zyl, testified in the Bloemfontein High Court on Tuesday in the first State Capture trial, involving a multimillion-rand feasibility study that led to the controversial Gupta-linked Vrede Dairy Project.
The State alleges that Nulane Investments — an accused in the trial — was paid R24.9-million for the feasibility study, of which R1.5-million was paid to Deloitte as a subcontractor.
The Vrede Dairy Project was a flagship R280-million Free State Department of Agriculture and Rural Development initiative. Van Zyl testified that as a director of agricultural projects (at Deloitte) he was involved in many such studies, but the Deloitte report for the Vrede Dairy Project was very superficial. He said a proper study on the project by Deloitte would have cost at least R5-million.
He testified that the original report compiled by Deloitte did not single out the Gupta-linked Paras Dairy — an Indian company — as the preferred service provider to be an implementing agent for the milk processing plant. He said Deloitte would never have recommended partnering with an Indian dairy company before a local one.
Van Zyl, also a lawyer, said under cross-examination that he did not have the submitted final report, to compare it with the report drafted by Deloitte. He said he also did not know to whom the draft report was sent. Van Zyl said in his view the payment by the provincial department to Nulane Investments was excessive. He said he, however, could not comment on a statement that charging excessive rates for services constituted fraud.
Van Zyl also admitted that the teaming agreement — between Nulane Investments and Deloitte — did not contain any financial information such as the cost of the feasibility study.
Several current and former officials from the Department of Agriculture and Rural Development testified that no procurement procedures were followed in the appointment of Nulane Investments. A deviation memorandum punting Nulane Investments as the preferred service provider for the study had instead been written. The State alleges the service provider did not have the capacity to perform the study and appointed Deloitte.
Kenny Oldwadge, legal representative for Dinesh Patel (also an accused in the matter), said Ashok Narayan — a member of the advisory council of then Free State premier and former ANC secretary-general Ace Magashule — had been appointed by Nulane Investments to run the feasibility study project.
Two former heads of the Free State department, Peter Thabethe and Limakatso Moorosi, are among the eight accused. Other accused are Patel, Iqbal Sharma, Ronica Ragavan and a second company — Islandsite Investment One Hundred and Eighty — of which Ragavan was a director. All the accused pleaded not guilty on charges ranging from fraud to money laundering.
The State alleges that the former HODs unlawfully and wilfully contravened the Public Finance Management Act that resulted in wasteful expenditure. The department had two accounting officers at the time because of a decision by the Free State Executive Council to merge the agricultural and rural development departments. The accused are facing charges ranging from fraud and contravening Section 86 (1) of the Public Finance Act.
A second Deloitte employee, who also worked on the feasibility study, is set to testify on Wednesday. The case continues
Vrede Dairy Project: Agri SA director testifies in Gupt… (dailymaverick.co.za)
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