WEBVTT - Former Transnet Executives, Siyabonga Gama & Brian Molefe explainer

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<v Speaker 1>Right, Let's turn to one of today's biggest stories. For

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<v Speaker 1>former senior Transnent executives Brian Morlife, Siabonga Gama, ANOJ Singh

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<v Speaker 1>and Tamsanka Jiane have been arrested for allegedly moving ninety

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<v Speaker 1>three million Rand through a company called Trillion Capital. All

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<v Speaker 1>of this in the context of a locomotive purchase process

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<v Speaker 1>that saw a massive contract to buy one thousand and

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<v Speaker 1>sixty four new locomotives. One aspect of this case, by

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<v Speaker 1>the way, is also the subjects of another matter that

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<v Speaker 1>was underwey in the Johannesburg High Court where I think

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<v Speaker 1>nine people are standing in the dock for that. It's

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<v Speaker 1>hard to keep track of all of this. It's hard

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<v Speaker 1>as well to look at this in the context of

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<v Speaker 1>the larger issue of trying to find some kind of

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<v Speaker 1>reckoning for the country in terms of justice for everything

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<v Speaker 1>that happened in the state capture era. There are of

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<v Speaker 1>course people who say the state capture era never really ended,

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<v Speaker 1>it's just morphed, but that perhaps is something we can

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<v Speaker 1>discuss at another stage. Let's look at this particular case

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<v Speaker 1>and a transnet in particular as well. Michael Marchant is

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<v Speaker 1>head of investigations at the organization Open Secrets and joins

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<v Speaker 1>us now on seven h two drive. Mister Martin, and

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<v Speaker 1>welcome and thanks very much for your time. If we

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<v Speaker 1>were to locate things that went on a Transnet and

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<v Speaker 1>how they were scrutinized at the zond Or Commission, my

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<v Speaker 1>recollection is that Justice Raymond Zondor said that Transnet was

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<v Speaker 1>a key nexus, a key hub for the corruption of

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<v Speaker 1>that particular period of South African history. Why do you

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<v Speaker 1>think this court case is so important?

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<v Speaker 2>Afternoon, John, and afternoon to those that are listening. I

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<v Speaker 2>think that you've kind of hit the nail on the

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<v Speaker 2>head already, which is that the transmit cases are so

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<v Speaker 2>important in terms of tackling state capture for I think

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<v Speaker 2>two reasons. The one is that from a monetary perspective,

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<v Speaker 2>Transnet was the central site of capture. So we're talking

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<v Speaker 2>about just over forty billion Rand in terms of the

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<v Speaker 2>value of the contracts and certainly the amount that was

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<v Speaker 2>extracted kind of through the Gupta enterprise. Again, we're talking

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<v Speaker 2>about seventy five eighty percent of all of the money flows.

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<v Speaker 2>It's about what happened to Transnet and as you said,

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<v Speaker 2>what the Zonder Commission kind of concluded is that what

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<v Speaker 2>was happening at Transnet was the kind of emblematic example

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<v Speaker 2>of how systemic capture was. So it was about the

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<v Speaker 2>appointment of people like Molefe, Singh and Gama, two positions

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<v Speaker 2>where they could manipulate procurement processes. And then it was

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<v Speaker 2>also about how that money was then used and how

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<v Speaker 2>it was laundered, and how it was then repurposed for

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<v Speaker 2>other kind of activities within the so called Gupta enterprise.

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<v Speaker 2>So I think kind of for those two reasons, these

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<v Speaker 2>cases and the arrest of individuals that we shouldn't forget

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<v Speaker 2>the Zonder Commission called kind of key architects of state capture.

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<v Speaker 2>They become so important. Yeah.

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<v Speaker 1>So, I mean, if we go back to the very

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<v Speaker 1>basic deal that was being done, the locomotive procurement cost

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<v Speaker 1>was initially I think thirty eight billion Rand. It eventually

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<v Speaker 1>spiked up to fifty billion Rand. As I understand it,

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<v Speaker 1>this case is not looking at that price increase. It's

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<v Speaker 1>looking at advisory fees that were paid around this. I

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<v Speaker 1>don't know why advisory fees needed to be paid in

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<v Speaker 1>the first place, but by all accounts they were huge.

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<v Speaker 2>They were and I think maybe just to say John,

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<v Speaker 2>that I've also been trying to piece together this afternoon

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<v Speaker 2>exactly what this case is about. Yes, and from the

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<v Speaker 2>different reporting that I've seen, it does appear that it

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<v Speaker 2>may be related to two different transactions. The one is

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<v Speaker 2>the very early on transaction to purchase ninety five locomotives

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<v Speaker 2>from China South Rail, and the allegation there is that

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<v Speaker 2>Singh and others violated human practices and kind of unlawfully

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<v Speaker 2>elevated the payments without border approval. And then separately, as

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<v Speaker 2>you've said, it's the transaction advisory fees linked to the

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<v Speaker 2>ten sixty four deal. Now, those transaction advisory fees are

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<v Speaker 2>really important again for two reasons. The one is that,

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<v Speaker 2>as you've said, the payment was very high, was around

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<v Speaker 2>about ninety three million Rand. The allegation of the Zonder

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<v Speaker 2>Commission is that that was for essentially consulting that never

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<v Speaker 2>took place, and so it was an unlawful payment to

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<v Speaker 2>Trillion simply to get the money into the GUPTA system

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<v Speaker 2>in order to be laundered. A second part of that

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<v Speaker 2>which is so important, and if that is what this

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<v Speaker 2>case is about, it it really goes centrally to the

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<v Speaker 2>allegation of racketeering against the Guptas is at that money,

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<v Speaker 2>a lot of it from Trillion was paid to another

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<v Speaker 2>company linked to the goods of the company called Alba Times,

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<v Speaker 2>and ultimately through that process it was used in the

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<v Speaker 2>now famous procurement at scom Or of Optimum Coal mine

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<v Speaker 2>by together. So those who really know their state capture

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<v Speaker 2>and are able to p see things together. It's about

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<v Speaker 2>how those advisory fees from one site of state capture

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<v Speaker 2>were laundered essentially into another part to allow for that purchase.

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<v Speaker 2>And so again you know, some of these cases already

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<v Speaker 2>before the courts, as you've mentioned, but this seems to

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<v Speaker 2>go centrally to some of these allegations of the systemic

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<v Speaker 2>nature of capture.

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<v Speaker 1>Tell us a little bit about Trillion, because the name

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<v Speaker 1>comes up, and the name comes up rather regularly. Who

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<v Speaker 1>were they and what role did they play in this?

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<v Speaker 1>And to the best of my knowledge, nobody from Trillion

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<v Speaker 1>has ever been charged with anything. And unlike firms like McKinsey,

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<v Speaker 1>perhaps was they had an international reputation such as it

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<v Speaker 1>was to protect they went and made compensation and gave

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<v Speaker 1>money back. But I'm not aware of Trillion ever being

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<v Speaker 1>held to account. Please put me right if I'm wrong.

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<v Speaker 1>But who are they and why do they matter?

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<v Speaker 2>So Trillian was a company that emerged out of Regiments,

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<v Speaker 2>which is another company I think people have heard about

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<v Speaker 2>in relation to state capture. But it and some of

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<v Speaker 2>its directors have actually been the site of or have

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<v Speaker 2>been the subject of criminal investigations and charges. And so

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<v Speaker 2>the really important thing I think to remember in this

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<v Speaker 2>case that we are, of course, you know, making a

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<v Speaker 2>big deal of the fact that Molefes Singh and others

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<v Speaker 2>have been arrested, but of course they have already been

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<v Speaker 2>arrested in face ongoing criminal charges in relation to Transmit

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<v Speaker 2>in relation to their twenty twenty to sharing. Now, part

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<v Speaker 2>of that twenty twenty two case also relates to the

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<v Speaker 2>arrest and charge of Eric Wood, who was a long

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<v Speaker 2>running director of Trillion, And the allegations are are twofold

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<v Speaker 2>against Trillion. The one is that they were used to

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<v Speaker 2>provide allegedly advice to Transnet and especially the trans Net

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<v Speaker 2>pension fund that allowed money to be extracted from that.

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<v Speaker 2>So that's the one allegation. But of course, as I've

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<v Speaker 2>discussed already, the second allegation is that Trillion was paid

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<v Speaker 2>inflated advisory fees from entities like Transnet and they would

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<v Speaker 2>immediately make those payments on to other entities within the

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<v Speaker 2>good to enterprise that would allow the funds to be laundered.

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<v Speaker 2>What I would say to those listening who are interested

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<v Speaker 2>in going back and really understanding the money flows part

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<v Speaker 2>of the story. Paul Holden some might remember from giving testimony,

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<v Speaker 2>was under commit really provided extraordinary detail, forensic detail about

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<v Speaker 2>the money flows and how entities advisory firms like Trillion

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<v Speaker 2>and Trillion Financial Advisory were involved.

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<v Speaker 1>So when a case like this comes to court, Michael

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<v Speaker 1>March and I think there may have been a time

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<v Speaker 1>when people would have said, Okay, great. The zond Or

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<v Speaker 1>Commission's work is manifesting itself in the criminal justice system,

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<v Speaker 1>clicking or maybe creaking into action, but taking action. Nonetheless,

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<v Speaker 1>the record that said on state capture cases in general

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<v Speaker 1>or in particular, and forensic and white collar crime cases

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<v Speaker 1>in particular is not particularly distinguished. And yet at something

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<v Speaker 1>like the zond Or Commission, and I get that the

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<v Speaker 1>burden of proof at a commission is very, very different

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<v Speaker 1>to a court case. Nevertheless, the detail set down is

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<v Speaker 1>so exhaustive in this plus in the investigations by groups

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<v Speaker 1>like yourselves and I'm a bungane and yet and yet

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<v Speaker 1>when it comes to court, it doesn't seem to stick.

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<v Speaker 1>What's your take on that.

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<v Speaker 2>Well, I think that John, the answer to that is

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<v Speaker 2>that unfortunately most of these things have not yet been

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<v Speaker 2>fully tested through the rights and the reason for that.

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<v Speaker 2>I think the reason for the delays are multiple. The

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<v Speaker 2>one is there's certainly there are allegations that the MPa

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<v Speaker 2>has been very quick to arrest and much slower to

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<v Speaker 2>move from arrest to the actual prosecution. So as I

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<v Speaker 2>mentioned the very high profile arrests in twenty twenty two

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<v Speaker 2>in relation to Transnet, there's still not been a court

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<v Speaker 2>date with regards to that, and so what we've seen

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<v Speaker 2>is we've seen lots and lots and lots of cases

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<v Speaker 2>being enrolled but not moving forward. And of course the

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<v Speaker 2>MPa would also say that sometimes that's because the accused

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<v Speaker 2>try and slow down the process, and we know that

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<v Speaker 2>our courts are very full. So there's a whole range

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<v Speaker 2>of reasons for the delays in terms of the evidence.

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<v Speaker 2>I think your point is so important is that the

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<v Speaker 2>other thing that hasn't yet happened is there hasn't been

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<v Speaker 2>a full test of the MPA's ability to enter the

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<v Speaker 2>so called Gupta leaks as forensic evidence. So for those

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<v Speaker 2>who've been involved in the investigations and looked at that detail,

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<v Speaker 2>we certainly know that the amount of forensic evidence is

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<v Speaker 2>absolutely overwhelming. But of course the NPA has to go

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<v Speaker 2>through the proper legal process to get that admitted, and

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<v Speaker 2>there hasn't been a case yet where that has happened.

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<v Speaker 2>Now for Transnett's a good example. If you want to

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<v Speaker 2>prove the money laundering and the racketeering charges, you're going

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<v Speaker 2>to have to rely on that primary evidence. And our

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<v Speaker 2>hope is still that a case like this and that case,

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<v Speaker 2>like the previously enrolled trans Net case, they will be

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<v Speaker 2>really the defining cases because if the MPa can make

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<v Speaker 2>it stick on this, it will go a long way

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<v Speaker 2>to a legal precedent on the fact that this was

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<v Speaker 2>a systemic kind of enterprise of state cap to rather

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<v Speaker 2>than kind of individualized cases of corruption.

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<v Speaker 1>Thank you so much, Michael Marchant, head of investigations at

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<v Speaker 1>Open Secrets. Long long way to go. It started today

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<v Speaker 1>in the palm Ridge Magistrates called twenty seven minutes past five,