Local asset manager, Kgori Capital this week launched a final bid to recover P10.5 million seized by the Directorate on Public Prosecutions (DPP) as part of its investigations into the much-publicised National Petroleum Fund (NPF) scandal.
The NPF, a statutory fund run under the Energy Affairs Department, hit the headlines in late 2017, with the state alleging that up to P230 million had been lost through money laundering linked to the national intelligence agency.
Several high profile individuals, including a former minister, High Court judge, government director and top fund managers, have since been included in an extensive line up of suspects in the criminal case the DPP is pursuing in the NPF matter.
Kgori Capital this week continued its pursuit of P10.5 million seized as part of civil case around the NPF. Under a consortium with related partners, Kgori Capital held the NPF’s investment mandate from January 2016 till the matter exploded in late 2017.
The DPP successfully froze Kgori’s accounts last year, arguing that the fund manager had helped itself to P10.5 million in management fees from the NPF despite the non-existence of a valid agreement. At the Court of Appeal on Wednesday, lawyers representing the asset manager noted that under Kgori Capital’s management, the NPF had actual yielded returns in excess of P61 million in 22 months.
Kgori Capital lost three rulings at the High Court on different dates last year relating to the freezing of the accounts and the constitutionality of the statutes relied upon by the DPP.
“The judgement and order of (High Court) Justice Godfrey Nthomiwa in the April 18 ruling were not competent on the facts or in law,” papers filed this week by Kgori’s counsel, Busang Manewe read.
“There was no evidence before the court to justify the conclusion that Kgori and its directors had engaged in any serious crime-related activities or benefitted from any serious crime-related activities as alleged by the DPP.”
The fund manager says while the Energy Affairs Department had awarded its tender in 2015 to a consortium led by Basis Points, the consultancy agreement was clear that asset management fees due to Kgori would be separately discussed from the main contract price of P15.7 million.
Kgori Capital’s attorneys said to this end, an interim mandate was sealed with the Department, represented by its now suspended director, Kenneth Kerekang, who authorised the asset management services and fees.
“For comprehensiveness and that is to say, even if one were to concede that there is force in the DPP’s argument that the interim mandate was void for want of authority by Kerekang, Kgori would still have been entitled, on the basis of quantum meruit, to be remunerated for its services in managing the NPF account.”
Kgori Capital argues that the High Court was also wrong to dismiss the argument that the deprivation of the right to property, such as happens when bank accounts are frozen, was not a constitutional violation of the right to property.
In response, the Attorney General, represented by Ernest Mosate, notes, among others that Kerekang, who is one of the lead suspects in the criminal NPF case, had no authority to execute the interim mandate and bind government to it, given the terms of the main consultancy agreement. The attorney also notes that Kerekang has not submitted an affidavit supporting Kgori’s case.
Mosate adds that the main agreement between the Energy Affairs Department and Basis Points had no provision for Kgori Capital as a sub-contractor, but the fund manager for 23 months had debited “so-called management fees” from the NPF to its own account.
“The consultancy price (of P15.7 million) was an all-inclusive price for the services covered by the Invitation to Tender and the consultancy agreement. “The contractual agreement Kgori entered into was outlawed by the consultancy agreement and its integral parts.”
Mosate said the DPP’s actions were entirely in line with the Constitution which seeks to promote peace, order and good government, under Section 86. “Criminal proceedings are a necessary means of fighting crime and to ensure peace, order and good government in the Republic.
“The powers exercised by the DPP director in terms of the Proceeds and Instruments of Crimes Act are deployed for the purposes of fulfilling the all-important function of crime fighting for the peace and security of this nation,” he said.
Judgement is due on July 26 at the Court of Appeal.