Johannesburg - In a recent landmark ruling, renowned diamond dealer Louis Liebenberg and his company were acquitted of allegations that they were operating a Ponzi scheme.
The court’s decision was based on the State’s failure to provide compelling evidence to support its case.
The legal dispute revolved around a preservation order granted under the Prevention of Organised Crime Act (Poca). The court was asked to reconsider whether the applicant, representing the State, had followed the correct procedures in obtaining the order and establishing the necessary features of the case.
This comes after a preservation order obtained by the National Prosecuting Authority (NPA) late last year in which R100 million in bank accounts linked to Liebenberg were frozen following “unfounded” accusations of money laundering, which were overturned by the Gauteng High Court, Pretoria.
According to Judge Selemeng Mokose, the State failed to present facts to the court following its allegations that the businessman traded illegally in uncut diamonds.
The preservation order had frozen Liebenberg’s bank accounts based on allegations of illegal diamond investments and other potentially unlawful activities. However, the respondents, including Liebenberg and his company, argued that the applicant did not act in good faith and excluded their version of events, leading to an imbalance and injustice.
The respondents’ defence was grounded on Rule 6(12)(c), which allows for the reconsideration of orders granted in the absence of the aggrieved party.
They aimed to redress what they perceived as an imbalance and injustice in the granting of the preservation order.
The central issue was determining whether there were reasonable grounds to believe that the frozen bank accounts were either an instrumentality of an offence referred to in Schedule 1 or the proceeds of unlawful activities. The respondents maintained that the applicant had failed to meet the evidentiary requirements for the relief sought.
Despite the applicant’s allegations about the respondents’ involvement in unlawful diamond investments and running a business through a personal bank account, the court found that the evidence presented did not sufficiently demonstrate a reasonable belief that the funds in the respective bank accounts were the proceeds of unlawful activities, or were an instrumentality of an offence.
The court also criticised the applicant’s approach to presenting evidence. They attached a large volume of documents without specifically pointing out the relevant sections, contradicting the principles outlined in the Swissborough Diamond Mines case. This method rendered the applicant’s case not fully canvassed, leading the court to disregard the attached documents.
Moreover, the applicant’s reliance on similar factual evidence was dismissed by the court. The respondents argued that this evidence should be excluded as no underlying facts were submitted to determine its relevance and probative value. The court concurred with the respondents and excluded this evidence.
The court also highlighted contradictions in the applicant’s allegations about the respondent’s business, which further weakened the applicant’s case. As a result, the application was dismissed, the preservation order was overturned, and the applicant was ordered to pay the respondent’s costs.
This ruling serves as a significant reminder of the importance of due process and the need for compelling evidence when making serious allegations. In this case, Liebenberg and his company were vindicated, not because they proved their innocence but because the State failed to substantiate its claims. Therefore, the judgment underscores the vital principle of the law that one is innocent until proven guilty.
Speaking to The Star recently, Liebenberg, who was yet to receive his frozen money, said the courts continued to mistreat him due to his alleged association with former president Jacob Zuma. He also spoke about the fact that he was not notified of the application by the NPA.
In April this year, Liebenberg also slammed an interim order after the sheriff of the court raided his business premises in Kempton Park during an alleged unprocedural liquidation process that attached furniture items belonging to a separate company that was not facing liquidation.
“How can we bring about a Ponzi scheme when we have the mine and the certificates to run the mine and sell diamonds we extract from the mine? We employ at least 200 people and have willing investors who are investing their money into the operation,” he told The Star.
The Star