LETTER: Criminal action cannot be first option to recover stolen SOE loot

by | Feb 18, 2021 | General | 0 comments

The lack of political will to attend to the recovery of loot needs to be addressed creatively and proactively

18 February 2021 – 11:02 https://spkt.io/e/1572411

It was most encouraging to hear public enterprises minister Pravin Gordhan informing parliament during the state of the nation address (Sona) debate that it was his intention to take steps to recover the loot of state capture.

He is right that state-owned enterprises (SOEs) were the “honeypot” of the looters, none of whom have been held to account either in the civil or the criminal courts of the country, and indeed the world. However, the minister is misguided if he thinks criminal proceedings are the first avenue of attack. On the contrary, a more manageable onus of proof and the availability of special procedures worldwide in the civil courts ought to impel him to turn to the civil courts first.

While it is so that expense is a consideration, the imaginative creation and use of consortia of suitably qualified lawyers acting in terms of properly procured contingency fee arrangements could expedite recovery via anti-dissipation orders, or Mareva injunctions as they are called internationally. These remedies are available worldwide, they are swift, often unopposed and very effective in the civil courts.

Within our SOEs there is a lack of expertise and competence to rake back loot, and also well-grounded fears that there will be adverse consequences for personnel taking steps against those looters who still remain powerful and well-connected. The concomitant lack of political will to attend to the recovery of the loot needs to be addressed creatively and proactively.

One way of doing so is to create a special purpose vehicle (SPV) (or vehicles) to which claims of departments of state and looted SOEs can be ceded for the purpose of mounting the civil legal proceedings needed to recover loot. In this way the recovery process is put at one remove from the fearful personnel within the public administration and SOEs and is expedited, as the sole purpose of the SPV will be to recover the loot. The country needs the money stolen returned to its coffers as soon as possible.

Paul Hoffman SC
Director of Accountability Now

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