The decision of the National Prosecuting Authority (NPA) to charge Finance Minister Pravin Gordhan with fraud (and, alternatively, theft) for approving the early retirement (with full pension benefits) of Mr Ivan Pillay and then for reappointing him as Deputy Commissioner for a period of four years, raises questions about whether the NPA truly believes that it will be able to secure a conviction in the case. To understand why a conviction is highly unlikely, it is important to look at the hurdles the NPA would have to overcome in order to secure such a conviction.

When the Hawks requested Minister Pravin Gordhan to make a “warning statement” earlier this year, they invoked three separate pieces of legislation which, they claimed at the time, formed the basis of the investigation against him.

First, the Hawks cited alleged breaches of section 1 and section 34 of the Public Finance Management Act 1 of 1999 (PFMA). Second they cited alleged breaches of section 3 of the National Strategic Intelligence Act 39 of 1994. Third, they cited alleged breaches of section 3, 4 and 10 of something they called the Prevention of Corrupt Activities Act 12 of 2004.

The NPA has now decided to charge Mr Gordhan with the common law crimes of fraud and theft. Mr Gordhan is not being charged with any breaches of any of the Acts which the Hawks originally referred to in order to justify their investigation against him.

This means the Hawks and the NPA are charging Mr Gordhan for criminal offences which – on their own version at the time – had not previously been part of their criminal investigation against him. This sudden change of direction from the Hawks and the NPA will create a suspicion among many South Africans that the investigation and, now, prosecution of Minister Gordhan might have been animated, at least in part, by motives other than to secure a criminal conviction in a court of law.

But this suspicion may, of course, be misguided. If the available evidence and an analysis of the applicable legal provisions show that the NPA has a strong case against Mr Gordhan, a reasonable observer may well conclude that the investigation and, now, prosecution of Minister Gordhan was animated by a desire to root out criminal activity without fear, favour or prejudice – regardless of whether the accused is the Minister of Finance or any other high ranking politician.

(While a suspicious person might wonder about the NPA’s markedly different attitude towards charging President Jacob Zuma with 783 counts of corruption, racketeering and fraud, this on its own will not, in my opinion, be decisive to conclude that the NPA was charging Minister Gordhan because of an ulterior purpose.)

In order for the NPA to prove beyond reasonable doubt that Minister Pravin Gordhan is guilty of fraud, the state would have to prove that Minister Gordhan unlawfully and intentionally made a misrepresentation which caused prejudice or potential prejudice to another (or to the state).

This means, first, that the NPA would have to provide evidence that Minister Gordhan made some or other misrepresentation when he approved the early retirement (with full pension benefits) of Mr Ivan Pillay and when he reappointed Mr Pillay as Deputy Commissioner for a period of four years.

What is required is for the state to prove that there was “a perversion or distortion” of the truth. This means it will have to be shown that Mr Gordhan claimed that a fact or facts existed which did not exist. Alternatively, that Minister Gordhan failed to disclose material facts which, unless revealed, could have induced another to act to his prejudice.

It is unclear how the Hawks will prove that Minister Gordhan had made such a misrepresentation. The decision to approve Mr Pillay’s retirement (with full pension benefits) was made in terms of section 6(a) and (b) of the Public Service Act of 1994. The section reads as follows:

“(a) An executive authority may, at the request of an employee, allow him or her to retire from the public service before reaching the age of 60 years, notwithstanding the absence of any reason for dismissal in terms of section 17 (2), if sufficient reason exists for the retirement.

“(b) If an employee is allowed to so retire, he or she shall, notwithstanding anything to the contrary contained in subsection (4), be deemed to have retired in terms of that subsection, and he or she shall be entitled to such pension as he or she would have been entitled to if he or she had retired from the public service in terms of that subsection.”

Rule 14.3 of the Government Employees Pension Fund allows a person to retire early if the applicable legislation allows for it. That applicable legislation is section 6(a) and (b) quoted above.

As I understand it, the state will have to show that “sufficient reasons” did not exist for the retirement while Minister Gordhan claimed that such reasons existed. The Act does not define what would constitute such “sufficient reasons”.

This means the state will have to convince the court that clear and settled rules (which the Minister are legally bound by) exist about what such “sufficient reasons” might be and then to prove beyond reasonable doubt that “sufficient reasons” did not exist for the early retirement. In any event, the Minister, as political head of SARS, may well have some discretion in deciding what would constitute “sufficient reasons”. It is therefore not easy to see how the state would prove beyond reasonable doubt that such reasons did not exist.

Similarly, the state will have to prove that Minister Gordhan falsely claimed that Mr Pillay was entitled to be re-employed on a contract basis when he was not entitled to be so re-appointed. NPA head Shaun Abrahams noted in his presentation that section 7(2) of the South African Revenue Service Act prohibits any employee from serving as acting Commissioner for a period longer than 90 days at a time.

However, the charge sheet does not state that Mr Pillay was fraudulently appointed as acting Commissioner, but rather that he was appointed as Deputy Commissioner. The applicable legislation does not prohibit the appointment of a Deputy Commissioner for a period longer than 90 days. It is therefore not clear what misrepresentation Minister Gordhan might have made when he approved the reappointment of Mr Pillay as Deputy Commissioner.

It might be possible for the state to prove the requirement that there was prejudice or potential prejudice to the state as the state had incurred extra expense to pay out the amount for Mr Pillay’s pensionable benefit.

However, on the third requirement for fraud, the state might have a problem with proving that Minister Gordhan had acted unlawfully. This is because unlawfulness is excluded where a person has acted in terms of the authority bestowed on him.

Minister Gordhan might well argue that he was authorised to grant the permission for Mr Pillay to retire early with full pension benefits in terms of section 6 of the Public Service Act. Adv. Abrahams mentioned a rule which allowed such re-appointment if another person with the same skills was not available to fill the post. The Minister would obviously invoke this rule to argue that he was authorised to give the green-light for the re-appointment on this basis.

But the most difficult hurdle for the state to overcome in securing a successful prosecution would be to prove beyond reasonable doubt that Minister Gordhan had the intention to commit fraud. This means the state would have to prove that Minister Gordhan was aware that the representations he made were false (if they were indeed false).

As Snyman remarks in his authoritative work on Criminal Law: “It is often difficult to prove that X knew that the representation was false.” It has become even more difficult since the Constitutional Court in S v Coetzee and Others overturned the provision in the Criminal Procedure Act which had created a reverse onus for the accused to show that he or she was not aware that the misrepresentation was false. The state must now prove this beyond reasonable doubt.

If the representations made by Minister Gordhan were indeed false, it is nevertheless difficult to see how the state would prove that Minister Gordhan, who says he was acting on advice from others, knew that the (mis)representations were false. This is so especially because evidence exist (according to Adv. Abrahams) that many other early retirements with full pension benefits had previously been approved by the Minister.

Unless there was smoking gun evidence proving that Minister Gordhan knew that the representations he made were false or unless it can be shown that it would be absurd to conclude that Minster Gordhan at all times believed that the representations he made were true, the state’s case would fail.

In the light of the above I am relieved that I will not be the prosecutor tasked with securing a conviction against Minister Gordhan on the charge of fraud.

The charge of theft against Minister Gordhan, which is levelled as an alternative to the charge of fraud, is truly bizarre. Theft is only proven where the state can show that somebody unlawfully and intentionally appropriate property which belongs to another. One only appropriates property by depriving another of it and then – importantly – exercising the rights of ownership over that property.

As there is no indication that Minister Gordhan appropriated the money which came to Mr Pillay (as he had not taken the money for himself and exercised ownership over it), I am pretty certain no court in the world is going to convict Minister Gordhan of theft.

It is important that the state must proceed to trial in this matter as quickly as possible. The sooner Minister Gordhan is prosecuted, the sooner the court can consider all the available evidence and the applicable law and, in my opinion at least, the sooner it can acquit the Minister of all the charges levelled against him. DM