Malherbe v S (A49/2021) [2021] ZAWCHC 177; [2021] 4 All SA 510 (WCC) (6 September 2021)

Malherbe v S (A49/2021) [2021] ZAWCHC 177; [2021] 4 All SA 510 (WCC) (6 September 2021)

The court found that the fraud charge was fundamentally flawed, both in its formulation and in the evidence presented. The appellant had disclosed his interest in EUS to the PNES board, and the alleged misrepresentation regarding B-BBEE status was not proven to have induced the board to contract with EUS. The evidence showed that the board was aware EUS was a start-up without existing black ownership, and any statements about B-BBEE were future intentions, not misrepresentations of fact. The State failed to establish that the appellant acted with fraudulent intent or that any actual or potential prejudice resulted from his conduct. The money laundering conviction was dependent on the...

Citation
[2021] ZAWCHC 177
Parties
Appellant: Dawid Johannes Malherbe; Respondent: The State
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
6 September 2021
Case Number
A49/2021
Procedural Posture
Criminal Appeal / Appeal Against Conviction and Sentence
Outcome
Appeal upheld; convictions and sentences for fraud and money laundering set aside for both the appellant and EUS.
Judges
Goliath, Binns-Ward, Steyn
Legal Topics
Fraud, Money Laundering, Public Finance Management Act, Broad Based Black Economic Empowerment, Procurement Policy, Director Conflict of Interest
Criminal Law Commercial and Corporate Fraud Money Laundering Public Finance Management Act Broad Based Black Economic Empowerment Procurement Policy Director Conflict of Interest

Case Brief

Summary, issues, holding and outcome

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Parties

Dawid Johannes Malherbe

Appellant

The State

Respondent

Procedural Posture

Criminal Appeal / Appeal Against Conviction and Sentence

Legal Issues

  1. 1 Whether the appellant fraudulently misrepresented the B-BBEE status of EUS to PNES's board.
  2. 2 Whether the appellant failed to disclose his conflict of interest in the outsourcing contracts.
  3. 3 Whether the contracts between PNES and EUS were concluded in violation of procurement policies.

Ratio Decidendi

The court found that the fraud charge was fundamentally flawed, both in its formulation and in the evidence presented. The appellant had disclosed his interest in EUS to the PNES board, and the alleged misrepresentation regarding B-BBEE status was not proven to have induced the board to contract with EUS. The evidence showed that the board was aware EUS was a start-up without existing black ownership, and any statements about B-BBEE were future intentions, not misrepresentations of fact. The State failed to establish that the appellant acted with fraudulent intent or that any actual or potential prejudice resulted from his conduct. The money laundering conviction was dependent on the...

Court Disposition

Appeal upheld; convictions and sentences for fraud and money laundering set aside for both the appellant and EUS.

Orders

  • The appeal is upheld.
  • The convictions and sentences for fraud and money laundering against the appellant are set aside and replaced with acquittal and discharge.