Bakang Seretse laughs all the way to the Bank

The High Court has ordered the state to pay P50.2 million in interest to Bakang Seretse and three of his companies for funds that were unlawfully frozen for nearly five years under the Proceeds and Instruments of Crime Act (PICA).

Justice Michael Leburu stated that the state had no legal or moral right to withhold interest earned on assets that courts had already declared lawfully owned and untainted by criminal activity.

He indicated that the progeny of lawfully owned property cannot be confiscated by the state. The judge likened the interest to “calves born to cattle wrongfully seized and later returned.”

The restrained funds, frozen in December 2017, belonged to Khulaco (Pty) Ltd, M & B Properties (Pty) Ltd, and businessman Bakang Seretse.

The Directorate of Public Prosecutions (DPP) alleged that P82.3 million was linked to criminal activity involving the National Petroleum Fund (NPF).

However, both the High Court in 2021 and the Court of Appeal in 2022 dismissed the allegations, confirming the applicants’ lawful ownership.

While the principal amounts were eventually returned, the accrued interest was withheld, prompting a fresh legal battle.

Justice Leburu highlighted that once ownership is confirmed, the interest earned during the restraint belongs to the original owners. He pointed out that the state cannot appropriate benefits from assets it had no right to seize.

“In the final analysis, once the restrained property is released to its owner, or lawful holder, any interest accrued whilst the property was still under attachment, pending finalisation of the civil forfeiture application by the Court, is payable and returnable to the owner of the property or to the person from whom the said property was taken from”, Justice Leburu said.

He criticised the use of PICA’s Confiscated Assets Trust Fund to hold onto interest from legitimate assets. In his ruling, the Judge explained that Section 46(4) requires preservation of value, not profiteering.

The state’s procedural arguments, including claims of non-joinder and statutory flaws, were rejected.

The court held that the Receiver of Confiscated Property had participated fully in the case, and the state had already accepted the substantive basis of the applicants’ claim.

Consequently, Justice Leburu ordered as follows: interest accrued from P69, 734, 260.00 from 13th December 2017 up to and including the 29th April 2022 shall be payable to Khulaco (Pty) Ltd; interest accrued from P 11, 081, 016.00 from 13th December 2017 up to and including 29th April 2022 shall be payable to M & B Properties (Pty) Ltd; interest accrued from P 814, 000.00 from 13th

December 2017 up to and including 29th April 2022 shall be payable to Bakang Seretse; and the amounts determined shall be payable with interest, at 10% per annum, from the 30th April 2022 to date of full payment.”