IN THE HIGH COURT OF SOUTH AFRICA

(WESTERN CAPE HIGH COURT, CAPE TOWN)

CASE NO. A 532/2009

In the matter between::
ANVER HENDRICKS								Appellant
and
THE STATE									Respondent

W.H. VAN STADEN, AJ

2. The relevant allegations contained in the charge sheet can be summarised as follows:

2.1. Kwani (Pty) Ltd ("Kwani") entered into a written agreement with Flemming Comp (Pty) Ltd doing business as Afro Comp International ("ACI") on 27 February 2000.

2.2. The Appellant, the duly authorised agent of Kwani, signed the agreement on behalf of Kwani. Joseph Clifford Flemming ("Flemming"), the sole director of ACI, signed the agreement on behalf of ACI.
2.3. By virtue of his employment as Maintenance and Support Manager as well as Training Centre Manager with Portnet, the Appellant had the duty to avoid preferring any one third party above another, with regard to Portnet business.

2.5. The activities of the Appellant were wrongful in the sense of being corrupt.
2.6. The Appellant had the intention that he should commit or omit to do any act in relation to his duties and power by virtue of his employment, to wit the preferment of ACI in its business relations with Portnet. It is however immaterial whether Flemming and/or ACI had the intention to reward the Appellant for his corrupt actions.
BACKGROUND FACTS
3. ACI, the company of which Flemming was the effective owner, was a small black-owned company supplying IT (information technology) products and services. Portnet was one of ACI's biggest clients. Best (Pty) Ltd ("Best") an established IT-business, was also a product and service provider of Portnet and had the sole rights to distribute and implement a financial system called Prophesy, which was utilised by Portnet. Best was a solely white-owned company that needed a black empowerment entity to partner it in a skills-transfer process so that Best could continue servicing the IT software at Portnet.
4. At all relevant times blac< economic empowerment and skills transfer to achieve transformation in the IT-sector was of great importance to Transnet and more particularly its subsidiary Portnet.
5. The Appellant was the acting Maintenance and Support Manager of Portnet and was in charge of the maintenance and support of all systems at South African Ports, including the billing system, the financial system, the maintenance management systems, the property management system and other smaller systems. Each of these systems had a support team with a project manager. This is how the Appellant described his designation and the scope of his employment in his evidence. In the charge sheet it is alleged that the Appellant was also the Training Centre Manager of Portnet. The state witnesses were not certain about the exact job description, except for Jonck who was clearly wrong in this respect. There appears to be no reason why the Appellant's evidence about the nature of his employment should not be accepted.

7. In attempting to fulfil this BEE-mandate, the Appellant was convinced that a joint venture between Best and ACI was advisable. Such a joint venture could benefit both Best and ACI. Best could assist ACI to develop skills and a portion of Best's business of supplying financial services to Portnet could be transferred to ACI. Best on the other hand could, by utilising ACI as a sub-contractor, comply with BEE-requirements and retain some Portnet business.
8. Appellant was seen by ACI as the key person to assist ACI to develop skills and to obtain additional contracts. Levendal was satisfied that Appellant had influence and was able to ensure that invoices are correctly processed and that payments would be fast-forwarded. The Appellant was therefore requested by ACI and Best to facilitate a joint venture agreement betwesn ACI and Best. Negotiations ensued and Appellant mentioned to the parties involved in the negotiations that the implementation of the SAP (R3 system), an IT financial system, was part of the future projections of Portnet and that a tender process for the operation of this system would be implemented. Appellant's idea was that ACI should be developed to such an extent that it would be able to compete favourably in this tender process. Apart form Appellant, Flemming, Mr Jaap Griesel ("Griesel") of Best and ACI's auditor Mr Levendal, as a representative of ACI, also took part in the negotiations.
9. Griesel informed Levenda< that the shelf-company Kwani, of which he was in effective control, rather than Best, should be a party to the agreement with ACI.   Levendal was tasked to draft this agreementwhich was finally entered into on 27 February 2000. The salient terms of this agreement are the following:
9.1. Kwani is duly represented by Appellant (paragraph 2 of the agreement).
9.2. Appellant shall attend monthly (or fortnightly) progress meetings in a non-executive capacity (paragraph 5).
9.3. Kwani must provide adequate collateral security for ACI to obtain a suitable overdraft facility, large enough to enable ACI to continue unrestricted with normal business operations and the envisaged larger output and capacity. In the interim a facility of R 200 000.00 will be established by ACI for Kwani (paragraph 6 to 9).
9.4. For the duration of the joint venture between the parties all cheques made out for an amount exceeding R 7 500.00, will require prior notification to Appellant (paragraph 10).
9.5. Kwani will receive a management fee of R 5 000.00 per month, payable to a nominated management company (paragraph 12.1).
9.6. As compensation for Kwani's services it would receive 30% of the profit during the period from availing the overdraft facility until Kwani becomes a shareholder of ACI (paragraph 12.2).
9.7. Kwani has the option to obtain 30%of the total issued shares of ACI (paragraph 13). The agreement will commence upon the successful increase of the overdraft facility and will terminate upon the restructuring of the ACI Group (paragraph 15).

11. The Appellant did not receive any direct financial benefits from either ACI or Flemming.

13. The changeover between Best and ACI actually took place and requests for services were directed to ACI by Portnet and ACI started invoicing. Levendal had regular contact with Appellant mainly to speed up payment of invoices. There can be little doubt therefore that the Appellant in the course of his employment did in fact use his influence to favour ACI. As stated hereunder that is of course not necessarily enough to justify a conviction on a charge of corruption.
14. The suspensive condition of the contract requiring that Kwani initially had the obligation to increase ACI's overdraft facility by R 200 000.00 was never fulfilled and the joint venture agreement referred to in paragraph 8, above never came to fruition.
15. At the trial the State tendered the evidence of three witnesses. The Appellant gave evidence and Griesel was also called as a defence witness.
16. The facts outlined above are facts which emerged during the trial and which are either not in dispute or cannot reasonably be disputed.

CERTAIN ASPECTS OF THE EVIDENCE FOR THE STATE
17. The first state witness, the auditor of ACI, (Levendal) testified that during the negotiations. Griesel made certain oral statements concerning the Appellant. Griesel informed him that he did not want his or Best's name mentioned in the agreement. He requested that Kwani should be included as a contracting party rather than Best. Griesel also told Levendal that he and Appellant were joint owners of Kwani, that Appellant was a director of Kwani and that Appellant would be signatory to the bank account of Kwani. He furthermore stated that Appellant would be compensated for his services rendered with a management fee.
18. The second state witness, Flemming, was clearly upset and emotional about the fact that the promises of ACI being developed and favoured by Portnet in its attempts to promote empowerment, were not kept. Flemming confirmed that apart from the fact that the Appellant signed the agreement, he did not receive any benefit whatsoever from Flemming or ACI. His evidence does not create the impression at all that he perceived his or ACI's actions as constituting bribery of the Appellant.

19. The third witness was Mr F H A Jonck, the assistant manager of Transnet Group Audit Services ("Jonck"). He was requested to investigate a complaint apparently lodged by Flemming. In many respects his evidence appears to relate to the conclusions that he reached after interviews with interested parties.
20. Jonck stated in his evidence that, on his interpretation of paragraph 12 of the agreement, the interests of the Appellant and Kwani was identical and that the 30% profit realised during that period would be due to the Appellant. According to Jonck the Appellant furthermore would have received the R 5 000.00 administration fee referred to in the contract. In his interview with the Appellant Jonck confronted him with his interpretation that the Appellant was not entitled to sign the agreement, as he would receive benefits in conflict with the terms of his employment.
21. Jonck also said that Appellant told him that he never read the contract and that he was under the impression that he had signed the contract as a witness and not as a representative of Kwani.

THE DEFENCE CASE

THE REGIONAL MAGISTRATE'S APPROACH
23. The Regional Magistrate stated that the court was faced with two conflicting versions as to how the Appellant came to sign the agreement and in what capacity he did so. The Magistrate accepted the version of the state witnesses that the Appellant signed as a representative of Kwani and rejected the version of the Appellant that he signed the contract as a witness. The Regional Magistrate was clearly correct to reject the evidence of the Appellant and Griesel that the Appellant intended to merely sign as a witness.

BENEFITS

26. The Regional Magistrate stated in her judgment that both Griesel and Appellant indicated to Levendal that the agreement must be entered into with Kwani rather than with Best. Levendal limited the source of this statement to Griesel only.
27. As stated above, the state witness Jonck also testified that in his opinion the Appellant improperly stood to gain some of the benefits accruing to Kwani in terms of the agreement and that he confronted the Appellant with this view during their interview. The Regional Magistrate adopted the same line of reasoning.
28. Despite the fact that the Appellants' evidence that he signed the contract as a witness must be rejected, there was a total lack of evidence to the effect that the Appellant would personally receive any benefits from the agreement in question. In order to justify a conviction on a charge of corruption in terms of Section 1(1)(b)(1) of the Corruption Act No. 94 of 1992, it is however not necessary for the accused to receive any benefit personally. The accused may be guilty of the offence if a benefit or a potential benefit accrues to anotherperson. In terms of the agreement with ACI, Kwani stood to gain benefits. The State therefore discharged the onus of proof in this respect.
THE DUTY OF THE APPELL CONTRACT WITH PORTNET
29. In the charge sheet it was alleged that by virtue of his employment agreement with Portnet the Appellant had the duty to avoid preferring any one third party above another with regard to Portnet business.
30. The Appellant was not only mandated to assist Best to participate in the transformation process at Portnet, but was specifically and actively involved in the promotion of BEE. The exact terms of the Appellant's employment contract with Portnet is therefore an important issue.
31. Jonck was the only witness called to prove the terms of Appellant's employment contract with Portnet. Jonck's evidence of the terms of this employment agreement was vague and unspecific. A reading of Levendal's evidence appears to confirm that the employment agreement in question was in writing. As a general rule the contents thereof should therefore be proved by producing this contract. It is furthermore relevant to note that Jonck was under the impression that Appellant was a Project Manager in the IT-division of Portnet. The Appellant's evidence referred to above is clear in this respect. He was the acting Maintenance and Support Manager of Portnet and a numberof Project Managers reported to him. Jonck was therefore mistaken as to the exact job description of the Appellant. The question arises as to whether this mistaken perception (of Appellant's job description) could have resulted in Jonck reaching a incorrect conclusions about the scope and nature of Appellant's duties as an employee of Portnet.

33. In the circumstances I conclude that the State has failed to prove the nature and extent of the Appellant's duties in terms of the employment agreement, with Portnet, one of the elements of the charge against the Appellant. 

ACTING CORRUPTLY
34. Section 1(b)(i) of the Corruption Act, Act 94 of 1992, provides that an accused person who agrees to receive or attempts to obtain any benefit, must act corruptly to be guilty of the offence.
35. As stated above it must be accepted that Appellant was mandated by the management of Portnet to act as an intermediatory between Best and ACI and to promote black economic empowerment. All his actions, including the signing of the agreement as a representative, appears tobe justifiable as the actions of an employee acting in the interest of his employer by promoting black economic empowerment.

CONCLUSION

						W.H. VAN STADEN
						Acting Judge of the High Court

I agree and it is so ordered.