Contravention of exchange control regulations under scrutiny in Estina fraud case

There was a dispute as to what documents were before Standard Bank when Estina applied for foreign currency to purchase and import a pasteurisation plant in 2013. 

Jarina Cornel Bekker, an investigator in the South African Reserve Bank’s (SARB) compliance and enforcement division, was testifying before the Pretoria magistrate’s court in the fraud trial of alleged Gupta associates Kamal Vasram and Saliesh Indurjeeth.

The state alleges they unlawfully told clearing agent UTI South Africa they were importing new dairy equipment worth about $3.4m (about R64m) from a supplier in the UAE in 2014. 

The suspected overpriced pasteurising plant, which was imported from India, was invoiced to Estina by Gateway Limited in the UAE. Evidence in the public domain suggests Gateway was used and controlled by the Guptas as a conduit to launder money and extract funds from South Africa.

Another count the men and Estina face is that of contravening exchange control regulations. The state alleges the accused applied to transfer $3.4m for the purchase and importation of the plant, whereas in their application, it was for “payment for management and consulting services”. 

Bekker testified that the documents provided by Standard Bank showed the application was for payment for management and consulting services.

Jaap Cilliers SC, for Vasram, told Bekker the facts relevant to the case before court occurred in 2013 when Bekker had nothing to do with the reserve bank.

He added that it appeared certain documentation would have been required by the authorised dealer, Standard Bank, including a commercial invoice and bill of lading.

Cilliers said there must have been more than one visit by Estina representatives because Standard Bank had taken action in processing Estina's application before September 30 2013. 

The application for the purchase of foreign currency related to the purchase of dairy equipment, he added.

On July 9 2013, information provided to the bank was for payment related to the pasteurisation plant, said Cilliers.

“The equipment had to be paid for in advance. We know this letter was found in possession of the authorised dealer.”

Cilliers told Bekker it appeared Standard Bank had full knowledge of all the relevant facts when it authorised the transaction. Bekker said she could not comment.

The case continues on Wednesday. 

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