Lahmeyer International GmbH v Crown (C of A (CRI) 6 OF 2002)

Media Neutral Citation: 
[2004] LSHC 60
Judgment Date: 
7 April, 2004

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C of A (CRI) 6 OF 2002

IN THE COURT OF APPEAL OF LESOTHO


In the matter between :

LAHMEYER INTERNATIONAL GmbH APPELLANT

and

THE CROWN RESPONDENT


Held at Maseru on 22-26 March 2004


CORAM:

Steyn, P.

Grosskopf, J.A.

Smalberger, J.A.


Judgment


Summary


Appeal - Common Law Bribery - Circumstantial Evidence - What inference justified -Cross-Appeal by Crown - Whether Crown has a right of appeal against sentence -

Sentence - Considerations governing.


THE FULL COURT


[1] The appellant, Lahmeyer International GmbH ("Lahmeyer"), appeared in summary proceedings in the High Court before Mofolo J and two assessors on twelve counts of bribery allegedly committed over the period 21 December 1989 to 10 April 1997. At the conclusion of a protracted trial Lahmeyer was convicted on seven


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counts (being counts 2, 6, 7 and 9 to 12) and acquitted on the remaining five counts.


It was sentenced to fines on each of the seven counts amounting to M10 650 000 in all. The present appeal is directed against Lahmeyer's convictions on all seven counts. There is no appeal by Lahmeyer against sentence. The Crown has noted a cross-appeal in respect of four of the counts on which Lahmeyer was acquitted. It also seeks to appeal against what it claims to be the leniency of the sentences imposed.


[2] The essence of the charges against Lahmeyer was that it, with intent to bribe, had from time to time paid varying sums of money into Swiss bank accounts held by one Z.M. Bam ("Bam") and his wife ("Mrs. Bam") who thereafter, acting as intermediaries, had transferred the amounts in question, or part thereof, to Mr. Sole ("Sole"), who at all material times was the Chief Executive Officer of the Lesotho Highlands Development Authority ("the LHDA") and a civil servant in the employ of the Lesotho Government (and as such a public official). The Crown alleged that the payments in question were made in respect of action or inaction by Sole in his aforesaid capacity and were intended to influence him in such capacity. That Sole was a public official is not in issue in the appeal.

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[3] Before proceeding further it is necessary to say something about the judgment of the court a quo. It is not a model of lucidity and, as pointed out in argument, it contains a number of material misdirections. We have no doubt, however, that it represents an honest and concerted attempt by the learned trial judge and his assessors to grapple with the evidence and the issues in what is a difficult matter. The court made adverse credibility findings against the defence witnesses which were not always backed by cogent reasoning. The flaws in the judgment are such that we are at large to consider the matter afresh. In doing so we will have proper regard to those findings of the court that were justified.


[4] The events leading to the charges against Lahmeyer arose out of the Lesotho Highlands Water Project ("the LHWP" or "the project", as the context dictates). The governments of Lesotho and the Republic of South Africa concluded a Treaty to govern all the activities associated with it. The project was described by this Court in Us judgment in the matter of Sole vs The Crown (C of A (CRI) 5/2002) delivered on 14 April 2003, (in a passage subsequently quoted in Acres International Limited vs The Crown (C of A (CRI) 8/2002) ("the Acres judgment") as :


"[O]ne of the biggest and most ambitious dam projects in the world, which entailed inter alia the construction of the Katse Dam in a remote and


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inaccessible part of the highlands of Lesotho. Initially the project involved the building of the essential infrastructure, such as access roads and accommodation facilities. One of the main aims of the project was the delivery of water to the Republic of South Africa. The delivery of water to South Africa necessitated the construction of a delivery tunnel. Another object was the generation of electricity and this entailed the construction of a hydropower complex and a transfer tunnel from Katse to Muela where the complex was to be built. All of this required substantial funding, most of which came from outside agencies such as the World Bank, the European Commission and the African Development Bank."


[5] The Court proceeded to describe the management and supervisory structures of the project as follows :


"The implementation, supervision and maintenance of the LHWP was entrusted to the Lesotho Highlands Development Authority ("the LHDA"), a statutory body created by the Lesotho Highlands Development Order 23 of 1986, pursuant to and in terms of a Treaty between the government of Lesotho and the Republic of South Africa. The LHDA was governed by a board of directors but the day to day running of its affairs was in the hands of its chief executive officer. Another body, the Joint Permanent Technical Commission ("the JPTC"), subsequently known as the Lesotho Highlands Water Commission, which was composed of representatives from both Lesotho and South Africa, acted in an advisory capacity to the LHDA and also monitored the progress of the project."


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[6] The project gave rise to numerous civil engineering contracts including contracts 46 ("046"), 51("C51") and 1009 ("C1009"), which were awarded to Lahmeyer in partnership with others, and with which the present appeal is concerned. A number of large international civil engineering firms, including Lahmeyer, were from time to time engaged in work on the project as consultants.


[7] Sole, who is a qualified civil engineer, was appointed the first chief executive of the LHDA on 1 November 1986. As chief executive he was intimately involved in all major contractual events leading up to the award of consultancy contracts and arising during the tenure of such contracts. These events included the short-listing of consultants to be invited to submit proposals, the evaluation of such proposals, the identification of the preferred consultant, the conclusion of a memorandum of understanding with such consultant, final negotiations and ultimately the signing of the contract. Subsequent events included matters such as variation orders to the contract and claims for interim payments.


[8] Sole served as chief executive of the LHDA until he was suspended in February 1995. He was dismissed from his post, following upon a departmental enquiry, in October 1995. He sought to have his dismissal set aside, but the review proceedings


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instituted by him in the High Court in that regard were dismissed in October 1996.


He was later indicted in the High Court on, inter alia, 16 counts of bribery; at the conclusion of his trial he was convicted on 11 of the counts. His appeal to this Court against his convictions failed.


[9] Despite Lahmeyer's attempts in the present matter to downplay the significance of Sole's role as chief executive, the evidence establishes convincingly that Sole, at all material times, was a man who wielded considerable influence over project-related events, at least until the time of his dismissal, and was in a position to improperly benefit, if so minded, anyone he sought to favour, or to refrain from acting contrary to such person's interests.


[10] Bam (who is now deceased) was also a civil engineer. Like Sole he qualified overseas. They were members of a small engineering community in Maseru. Bam was a Director and the driving force of Lescon, a company incorporated in Lesotho in 1981 with Sole as a founder member. Bam rented Sole's official residence from him, they played squash together and Bam had been seen to visit Sole at his office. In a letter to a certain Mr. Azar at his Swiss Bank in what appears to be April 1994 (the date is indistinct) Sole states "I believe you have recently met my friend Mr. Bam


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of Lesotho." And subsequently, in a letter dated 20 June 1995 Sole requests the bank to "Please give bearer - Mr. Bam - a copy of my current portfolio valuation and all my vouchers." Similarly, in a letter dated 7 September 1997 Sole asks the bank to give Bam "copies of statements and vouchers" for his account. That Sole entrusted Bam with such tasks speaks of a close relationship between them. There can be little doubt that they were well known to each other and on a friendly footing.


[11] In its plea explanation Lahmeyer admitted that the payments forming the subject matter of the twelve counts were made by it to Bam. It was further common cause that the payments in respect of all the counts except count 1 were made in the context of C46, C51 and C1009. Lahmeyer claimed that the payments to Bam (save that in respect of count 1) were made in terms of three Representative Agreements ("RAs") concluded between it and an entity named ACPM, which was the name under which Bam sought to operate in respect of these agreements. It was a name unknown to any one involved in the project and can be described as a name of convenience. Lahmeyer further claimed that the terms of the RAs were in keeping with international practice and norms and that all payments made to Bam under the RAs were in respect of services rendered to it by Bam.


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[12] It is also common cause that the payments made by Lahmeyer to Bam in respect of counts 6, 7 and 9 to 12 (as well as that in respect of count 3, on which Lahmeyer was acquitted) were used to fund payments by Bam to Sole. Moreover, it was not in dispute in the appeal that the Crown's evidence, dealt with more fully below, placed an obligation - a so-called evidential burden - on Lahmeyer to explain its payments to Bam. Without such explanation, in the form of Lahmeyer's reliance on the RAs, an inference of bribery could properly have been drawn against Lahmeyer.


[13] The term "evidential burden" (or "evidentiary burden" as it is also known) is somewhat of a misnomer and must not be misunderstood. In a criminal case the onus or burden of proof rests upon the Crown to prove the guilt of an accused beyond all reasonable doubt. Where the Crown establishes a prima facie case against an accused a duty to adduce evidence to combat such prima facie case arises. A failure by the accused to adduce evidence could result in a conviction. But if evidence is adduced which, if reasonably possibly true, would constitute a proper defence to the charge, the accused is entitled to be acquitted. In the end result it is the Crown, not the accused, who bears the onus of proof and it is the Crown that has to convince the court that the evidence tendered by the accused cannot reasonably be true and that no


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reasonable doubt arises concerning his guilt. (See S v Alex Carriers (Pty) Ltd 1985 (3) SA 79 (T). Accordingly it is for the Crown to prove, having regard to the defence raised, and the evidence adduced by Lahmeyer, that the payments made by Lahmeyer to Bam were intended, in whole or in part, as bribes for Sole and were not genuine payments for services rendered under the RAs. (See generally: Hoffmann and Zeffert: The South African Law of Evidence, 4th Ed, pp496 - 499.)


[14]We proceed to deal with a chronology of relevant events that are of particular significance in relation to the issues in the present matter. In doing so we bear in mind that in respect of C51 Lahmeyer formed a consortium with engineers Mott MacDonald, ("LMC"); and that in respect of C46 and C1009 LMC and South African engineers combined to form the Lesotho Highlands Tunnel Partnership ("LHTP"). As we are concerned only with the role played by Lahmeyer we shall, for the sake of convenience, unless the context indicates otherwise, simply refer to Lahmeyer.


14.1 As far back as August 1965 Dr. Emsmann ("Emsmann") and Dr. Zimmermann ("Zimmermann") of Lahmeyer were involved in LHWP feasibility studies. In December 1982 Lahmeyer pre-qualified to tender for the feasibility study, was successful in its tender and was appointed to undertake the feasibility study in February 1983. It proceeded to


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carry out the feasibility study in Lesotho over the period 1983 - 1986. Mr. Hecker ("Hecker") was appointed as project manager. The feasibility study report was released in April 1986.


14.2 In October 1986 the LHDA was constituted and Sole was appointed as Chief Executive for five years. At the beginning of 1987 Lahmeyer tendered for, but was not awarded, contracts 12 and 15 ("C12" and "C15"). The contracts were awarded to a French company, Sogreah, much to Lahmeyer's consternation. In March 1987 Dr. Spiess ("Spiess"), a senior Lahmeyer executive, came to Maseru. What happened on that occasion will be canvassed in greater detail later. On a number of occasions during March and April 1987 Lahmeyer, through Spiess and Hecker, complained to both the LHDA and the World Bank, as funder of the contracts, about irregularities in the C12 and C15 evaluation processes, but to no avail. In June 1987 Hecker left Lesotho.


14.3 In February 1988 the Mafeteng dam broke. Lahmeyer was later awarded the contract for the reconstruction of the dam; the contract was signed on 1 December 1989. In April 1988 Dr. Meyer of Lahmeyer was seconded to the JPTC. In June 1988 Bam went to Germany where he met with Spiess and advised him that C46 was in the offing. On 1 December 1988 Bam commenced working for the Botswana Housing Corporation in Gaborone as Chief Executive Officer, a position he occupied until February 1991.


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14.4 In 1989 the events surrounding C46 started to unfold. In April 1989 Lahmeyer was short-listed for C46. On 9 June 1989 Bam opened a Swiss banking account in Geneva. About that time he also had a meeting with Emsmann and Spiess at Frankfurt Airport. In the same month the LHDA evaluated the rates of the Association of Basotho Consultants ("ABC"), of which Lescon was the lead firm, for consultancy contracts. On 20 October 1989 the request for proposal ("RFP") for C46 went out to six international invitees, including Lahmeyer. The RFP envisaged an approximately 20% input from Basotho consultants. On 21 December 1989 Lahmeyer paid DM10 000 into Bam's Swiss account. (This payment was the subject of count 1).


14.5 On 29 May 1990 Lahmeyer submitted its proposal for C46. Provision was made for a 20% input from Basotho consultants and Lescon was included in the proposal as a member of ABC. In July 1990 Lahmeyer was invited to negotiate C46. Negotiations took place in August 1990 and on 29 August 1990 the memorandum of understanding ("MOU") for C46 was signed. On 18 September 1990 the LHDA authorised mobilisation under C46. On 22 October 1990 Mrs. Bam opened a Swiss bank account. On 23 October 1990 the Board of the LHDA approved the award of C46 to Lahmeyer, although the contract was only signed on 20 February 1991. The LHDA sent out pre-qualification notices to interested parties on 7 December 1990 in respect of C51. And on 31 December 1990 Lahmeyer concluded a RA with Bam in respect of C46.


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14.6 On 8 February 1991 Lahmeyer paid DM40 000 into Mrs. Bam's Swiss account. (This payment formed the subject of count 2). On 20 February 1991 Bam stopped working in Botswana and returned to Lesotho. On 26 February 1991 Lahmeyer made a cash payment of M68 800 to Bam in respect of C46, the first of many such payments. (The next cash payment, amounting to M68 200, was made on 4 March 1991.) On 28 February 1991 Bam was in Switzerland where he opened another Swiss account. And on 4 March 1991 Bam paid FRF458 000 into Sole's Swiss account. (This payment also relates to count 2.) The RFP for C51 went out on 21 March 1991. Lahmeyer was advised that the person authorised to award the contract was the Chief Executive and that further appropriate information could be obtained from him. On 3 May 1991 Bam, on behalf of Lescon, committed himself exclusively to Lahmeyer for the purposes of Lahmeyer's proposal, which Lahmeyer submitted on 31 May 1991. On 8 June 1991 Lahmeyer paid Bam M90 000 in cash followed by a further cash payment of M54 000 on 4 September 1991. The MOU in respect of C51 was signed on 11 September 1991 and Lahmeyer was given permission to commence mobilisation for C51 on 13 September 1991. On 24 November 1991 Lahmeyer's C51 RA with Bam was concluded.


14.7 On 27 January 1992 Lahmeyer made a cash payment of M55 000 to Bam. C51 was signed on 19 February 1992. A further cash payment of M49 260 was made to Bam on 28 April 1992. This was followed by a payment of Rl 00 000 into Bam's Swiss account on 30 April 1992. On


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21 May 1992 Bam paid R50 000 of that amount to Sole via a Swiss account. (These payments formed the subject of count 3.) Three further cash payments totalling Ml42 500 were made to Bam in Maseru on 28 July 1992,29 September 1992 and 26 November 1992 respectively. On 30 December 1992 an amount of R84 744-20 was paid into Bam's Swiss account. (This payment was the subject of count 4.)


14.8 During 1993 C46 and C51 were being implemented. Three cash payments totalling M112 830 were made to Bam in respect of C46 and four cash payments amounting to M235 000 in respect of C51. On 9 June 1994 the RFP for C1009 was issued to short-listed firms (including Lahmeyer) together with the ABCC pre-qualification document. On 28 November 1994 Sole was sent on three months leave pending a management audit. During 1994 Bam received four cash payments in respect of C51 totalling M265 000. The last cash payment to Bam was made on 17 September 1994.


14.9 On 19 January 1995 Lahmeyer paid DM34 000 into Bam's Swiss account. On 27 January 1995 and 24 February 1995 Bam paid USD 10 007 and USD8 500 respectively into Sole's Swiss account. (These payments formed the subject of count 5.) On 24 February 1995 Sole was suspended from his duties as Chief Executive and Mr. Putsoane ("Putsoane") was appointed to act in his stead. The MOU for contract 1009 was signed with Lahmeyer on 10 March 1995 following on earlier contract negotiations. On 13 March 1995 Lahmeyer paid DM24 256


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into Bam's Swiss account and Bam in turn paid USD8 611 into Sole's Swiss account on 21 March 1995. (These payments formed the subject of count 6.) On 10 May 1995 Lahmeyer paid a further DM61 870 into Bam's Swiss account, who in turn paid a virtually identical amount (DM61 882) into Sole's Swiss account on 15 May 1995. (These payments formed the subject of count 7.)


14.10 On 26 May 1995 Lahmeyer was authorised to mobilise under C1009 although the contract was only signed later. On 18 August 1995 Lahmeyer paid DM7 645 into Bam's Swiss account. There was no corresponding payment to Sole. (This payment formed the subject of count 8.) On 28 September 1995 Lahmeyer deposited DM9 975 into Bam's Swiss account in respect of C1009; on 23 October 1995 Bam paid DM4 987 into Sole's Swiss account. (These payments formed the subject of count 9.) Contracts C46, C51 and C1009 continued to be implemented. In the meantime, on 19 October 1995 Sole was dismissed. He applied to the High Court on 3 November 1995 to have his dismissal set aside. His application was dismissed on 30 October 1996. Reasons for judgment were handed down on 7 January 1997.


14.11 On 19March 1996 Lahmeyer paid DM58 801 into Bam's Swiss account. On 3 April 1996 and 21 June 1996 Bam paid DM8 800 and DM9 000 respectively into Sole's Swiss account. (These payments formed the subject of count 10.) On 1 October 1996 Lahmeyer paid DM17 600 into Bam's Swiss account; on 8 October 1996 Bam paid


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DM8 800 into Sole's Swiss account. (These payments formed the subject of count 11.) C46, C51 and C1009 continued to be implemented. The final payment from Lahmeyer to Bam was an amount of DM47 600 on 10 April 1997 paid into Bam's Swiss account. On the same day Bam paid DM23 800 into Sole's Swiss account. (These payments formed the subject of count 12.)


[15] It is common cause that Lahmeyer made substantial payments to Bam, in cash and into Swiss accounts, during the tenure of C46, C51 and C1009. Converted throughout to maloti these amounted to, in cash, M640 590 (C46) and M855 000 (C51), a total of Ml 495 590, and in respect of bank transfers, M64 102 (C46), M677 311 (C51) and M62 800 (C1009), a total of M804 213. The overall amount was M2 299 803. It is further not in dispute that in regard to six of the counts on which Lahmeyer was convicted, as well as count 3, the payments by it to Bam were used in turn to fund payments from Bam to Sole, in the majority of cases in a fixed percentage (50%) of the amount received by Bam. The crux of the present appeal is what these payments to Bam, and in particular the overseas payments which funded the amounts paid to Sole, represented. Were they legitimate remuneration for agency work actually done by Bam under genuine RAs, or did they constitute bribe money paid and received under the guise of simulated RAs? The Crown contends that the latter situation was in fact the case. A detailed consideration of the RAs and the


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circumstances surrounding their conclusion and implementation is therefore called

for to determine their genuineness or otherwise. In this regard, three possibilities

arise:


  1. The three RAs are simulated and the payments made thereunder not genuine agents' remuneration. Lahmeyer concedes that if that is the case its appeal must fail.


  1. The RAs are genuine. If that is found to be the case, or held not to have been disproved by the Crown, Lahmeyer's appeal must succeed.


  1. The RAs were vehicles for both legitimate payments to Bam and for the payment of bribes. The consequences flowing from that situation will be dealt with later if the need arises.


[16] In the Acres' judgment (para 45) this Court endorsed the following definition of bribery in R v Patel 1944 AD 511 at 521:


"It is a crime at common law for any person to offer or to give to an official of the State, or for any such official to receive from any person, any


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unauthorised consideration in respect of such official doing, or abstaining

from, or having done or abstained from, any act in his official capacity."


The Crown set out to prove that Lahmeyer paid money to Bam with the intention that Bam would transfer all or some of that money to Sole as a bribe. There is no direct evidence to that effect. The Crown relies upon circumstantial evidence to justify the conclusion it seeks. The correct approach to circumstantial evidence and reasoning my inference in a matter such as the present is dealt with comprehensively in the Acres judgment in paras 13 to 18. No point would be served in repeating what was said there. The principles enunciated in those paragraphs fall to be applied in the present appeal.


[17] The evidence reveals that in the early 1980s Lahmeyer had a representative in Lesotho, one Montsi. When he somewhat unexpectedly disappeared from the scene Lahmeyer claims that Bam was considered a worthy replacement. Lahmeyer's case is that a RA was concluded between Spiess and Bam in March 1987 - about which more later. According to Mr. Heiland ("Heiland"), when Lahmeyer, through him, became interested in the contract for the rehabilitation of the Mafeteng dam, he was informed by Spiess that Bam was Lahmeyer's representative in Lesotho. Heiland


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was a civil engineer employed by Lahmeyer. After Lahmeyer tendered successfully

for the contract, he became the Project Director. A representative agreement was concluded with Bam who rendered what Heiland referred to as "valuable services". Bam was ultimately paid a negotiated amount of M100 000 as his representative fee. In respect of that Lahmeyer paid DM1.0 000 into Bam's Swiss account on 21 December 1989. This was the payment to Bam that featured in count 1. This evidence first came to light towards the end of the defence case. The Mafeteng contract was not one of the LHWP contracts and did not fall under the authority of the LHDA or Sole. This led to the Crown not pursuing a conviction on count 1.


[18] The defence contends that the facts surrounding count 1 are relevant to show that Lahmeyer used Bam as their representative in Lesotho, also in projects unrelated to the LHWP. It is Lahmeyer's submission that Heiland's evidence and the documentation relied upon by him demonstrate that Lahmeyer used Bam for genuine representative services in respect of the Mafeteng dam contract and that his role did not change when he subsequently entered into the C46, C51 and C1009 RAs. Lahmeyer further submitted that the payment of DM 10 000 into Bam's Swiss account in this instance, where Bam was duly paid as a representative, also shows that the later payments into Bam's Swiss account do not justify any sinister conclusions.


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The circumstances relating to the alleged RA were never fully investigated. No

written agreement was produced. The evidence to which we refer later casts doubt on its genuineness, which may have been open to question. We shall, however, proceed on the assumption that the RA, the precise terms of which we are unaware, was a genuine one appropriate to the circumstances. Even if we assume its genuineness, this does not serve to strengthen, inferentially, an argument that the RAs in respect of C46, C51 and C1009 were genuine. Each RA must be considered Separately in the light of its own individual character and terms and the facts and circumstances pertaining at the time.


[19] There is no evidence to controvert the defence evidence that the use of representatives is regularly resorted to in international engineering consultancy practice; that most RAs are success based and that a fee of 5% is not per se abnormally high. The World Bank suggests that it may be helpful for a consultant operating in a foreign country to employ a local representative who knows the country and can keep the consultant informed, particularly in the early stages of a project cycle when most consultancy business occurs. Detailed information concerning the World Bank's approach to RAs was not placed before us. It obviously does not envisage the RAs being used for improper or unlawful purposes. But the


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potential for abuse, without proper control being exercised, is very real and, on the evidence, not unknown. Whether in a particular case a RA was intended for unlawful purposes, and put to unlawful use, is a matter for evidence and/or inference given the circumstances of that case. In short, a RA cannot simply be taken at face value.


[20] The RA in respect of C46 was signed on 31 December 1990, when C46 had already been secured, and long after any services envisaged by the agreement would have been performed. The wording is totally inappropriate to such a situation. It relates to the future rather than, as one might have expected, the past. On the inherent probabilities, seen particularly from a business perspective, it is highly unlikely that the RA would have been entered into ex post facto. There had to have been a prior agreement because such services as Bam was to have rendered took place from 1987 onwards. From that time there had been regular interaction on the part of Hecker (until his departure in June 1987) and Emsmann with Bam.


[21] Such prior agreement must have come into existence in March 1987 when Spies came to Lesotho. According to Hecker, Bam had been pressing for a RA for some time and the sole purpose of Spiess' visit was to negotiate its terms with Bam. This is unlikely to have been the case given the prevailing circumstances. Rumour


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had it that Lahmeyer had lost its tender for C12 and C15, which it had expected to be awarded. It attributes such loss to the machinations of one King, who had been specially appointed as a member of the evaluation committee for C12 and C15 by Sole. Lahmeyer was deeply concerned about the situation and what it perceived as irregularities in the award of C12 and C15. The probabilities are overwhelming that Spiess, a high-ranking Lahmeyer executive, came to Lesotho primarily in an attempt to salvage the contracts, hence his involvement in the complaints to the World Bank, his presence in Lesotho offered him an opportunity to negotiate with Bam. There is certainly no reason why he should have come to Lesotho for the sole purpose of concluding a standard representative arrangement with Bam.

[22] Some agreement must have been struck in March 1987 between Lahmeyer and Bam with regard to Bam's role as representative which would regulate their reciprocal commitments and define Bam's future conduct. What were its terms? We do not know, as only Spiess and Bam were party to it; Spiess did not testify and Bam passed away before the trial. This underscores the importance of Spiess as a witness in relation to a vital aspect of Lahmeyer's defence.


[23] One cannot disregard the fact that the seeds of discontent occasioned by


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Lahmeyer's loss of C12 and C15 due to irregularities (after it had incurred considerable expense) would have provided a powerful motive for bribery if Lahmeyer wished to continue operating in Lesotho and hoped to secure future project-related contracts. Lahmeyer would clearly have been loath to incur further expenses in relation to costly proposals (which is what the evidence showed them to be) without some assurance of success or at least equal opportunities when tendering. Their future participation hinged on their ensuring that their efforts had every chance of success. When Spiess and Emsmann met Bam at the Frankfurt Airport in June 1989 they were concerned about Lahmeyer's prospects of successfully tendering in future. Bam was subsequently able to set their minds at rest in that regard. At that meeting Bam again agreed to bind Lescon exclusively to Lahmeyer. That he was prepared to do so, despite what had occurred in respect of C12 and C15, suggests he was satisfied that he would not be at risk in doing so. Why align himself with Lahmeyer again unless success was assured? Bam's reassurance to Lahmeyer about their future prospects and his willingness to agree to an exclusivity arrangement would seem to indicate that the groundwork had been laid to secure Lahmeyer's future success in respect of contracts for which it tendered (at least during Sole's tenure as chief executive).


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[24] In considering whether Lahmeyer would have contemplated bribery regard can be had to the fact that it was not above acting irregularly or improperly or indulging in sharp business practice in its own interests, as the evidence reveals. It is common cause that Lahmeyer, without demur, accepted confidential information obtained by Bam to which it knew it was not entitled, and which it must have known had been improperly obtained, such as the evaluation results for C12 and C15 and the engineers' estimates (or at least the final figures) for C46, C51 and C1009. It also used Bam to discern unofficially the LHDA's attitude during negotiations; as a representative for C1009 when the RFP specifically prohibited it from communicating with Bam through ABCC; and to obtain information unofficially which it could have got for itself but was not prepared to wait for.


[25] If the agreement struck between Spiess and Bam was no more than a standard representative arrangement it is highly unlikely, given what had occurred, that Bam would have rendered the services described in the C46 RA over a three year period without an enforceable, written contract in place. Why would he render services free of charge on the off chance of Lahmeyer's future success, bearing in mind what had happened in respect of C12 and C15? Bam was not just an agent. Through Lescon and ABC he had a very real interest in sub-consultancy work in respect of contracts

24 under the project. He had suffered severe financial loss by aligning himself exclusively with Lahmeyer in respect of C12 and C15 and thereby foregoing a possible stake in those contracts. He had not received any payment for his efforts and co-operation. His future participation is likely to have been dependent upon his receiving appropriate financial recognition for his efforts. Given Bam's role one would have expected the parties to have entered into an agreement governing their relationship with clear and enforceable terms with provision for invoices and other support documentation to facilitate accounting. They were after all businessmen -there would have been a need for a contract in view of the importance of the services to be rendered by Bam, and the corresponding need to protect his interests. There is no evidence that any such written contract ever existed; nor is there direct evidence of any oral agreement and its terms and conditions. The one person who could have testified to the arrangement agreed upon between Lahmeyer and Bam, namely Spiess, was not called as a witness by the defence. We shall revert to this aspect of the case later.


[26] The above circumstances raise a strong inference that the RA in respect of C46, allegedly entered into ex post facto for the purpose it purported to serve, was not genuine, but was entered into as a device calculated to disguise and artificially


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legitimise the true relationship between Lahmeyer and Bam, that being its primary

purpose. And that relationship, on the inherent probabilities, was that when Lahmeyer paid Bam, it did so primarily to enable him to bribe someone. That person could only have been Sole given his position and relationship with Bam. Sole and Bam were fellow engineers working and residing in a relatively small community. They were personal friends. Bam rented a house from Sole. They both operated within a sphere - the engineering profession and related activities - with which Lahmeyer was well acquainted. Lahmeyer employees had had considerable exposure to Lesotho over a number of years. In those circumstances Lahmeyer must have been aware of the seemingly close relationship between Bam and Sole. Emsmann's and Hecker's denials in this regard simply do not ring true. They were equally disingenuous in their deliberate attempt to downplay the importance of Sole's role and the extent of his influence. Their evidence in this regard is also unacceptable. A further consideration which the Crown advanced is this. It was clearly important to Lahmeyer that the improperly obtained confidential information furnished to it by Bam should come from a reliable source. Yet Emsmann claimed that he never enquired from Bam, with whom Lahmeyer had a close, long-standing relationship, who his source was. His attitude was he did not mind where and how he got the information. This is contrary to logic and human experience, and is explicable only

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on the basis that Emsmann knew all along that the source was Sole.


[27] There are additional considerations which in our view further strengthen the conclusion that the C46 RA was not genuine. As pointed out in the Acres judgment (para 24) there, as here, the use of the name ACPM in the RA had the effect of disguising the true identity of the person Lahmeyer wished to use as its representative and the fact that money was being paid to Bam. Why do that? Lahmeyer contends what ACPM and Bam were one and the same, so that it made no difference. If that is so, why was Bam's name not simply used? Why use a name that was unknown? Why the lack of openness? The circumstances are highly suspicious and redolent of something underhand.


[28] A further consideration is that large sums of money were paid to Bam in cash and into Swiss accounts. No (acceptable) explanation for the substantial cash payments (M1 495 590) was ever advanced. They are, to say the least, unusual. Why could Lahmeyer not simply have transferred the money to Bam's local bank account or paid him by cheque if everything was above board. Large cash payments in respect of what is claimed to be a normal business relationship invites suspicion. As do Swiss bank accounts which are secret and notorious for the disposal of money


27


unlawfully acquired. At the very least the payments by Lahmeyer to Bam in the

above manner had the effect that there would be no local record of such payments. Again, one may ask, why the secrecy?


[29] In the Acres' judgment (at para 30) the following was said:


"The genuineness of [an] agency contract would be best evidenced by proof that the services to be delivered by this mandate:


i) Were genuinely required by the consultant concerned; ii) Could be delivered by the representative; iii) Were in fact delivered; and


iv) Generated remuneration that was commensurate with the anticipated and the actual service delivery."


[30] We do not propose to analyse the evidence in the above regard in depth. It suffices to say the following: By March 1987 Lahmeyer already had, through the feasibility study it had undertaken, and the preparation of proposals for C12 and C15, considerable exposure to Lesotho. It was not venturing into a foreign country for the first time. It was well acquainted with conditions here. With one exception, to which we shall revert, the lawful and regular services required of Bam in terms of the C46


28


RA (which included the gathering of technical and other information), and which Lahmeyer claims Bam performed, could by and large have been attended to by an office manager (which Lahmeyer at all material times had), or provided by the LHDA, which was under an obligation to assist consultants, or obtained from other available sources. Prima facie Lahmeyer had little if any need for the services of a run of the mill representative. Significantly there are no documents which evidence any services rendered, and according to the Crown's witnesses they had no knowledge of Bam's role as representative. (Lahmeyer claimed that Bam's role as representative was kept confidential, but was not a secret. There certainly appears to have been a lack of openness concerning his representative duties. It is true that Bam represented Lahmeyer at certain meetings and negotiations, but he was not acting in those instances, or purporting to act, in an agency capacity). Furthermore, over the initial period while Lahmeyer was preparing its C46 proposal (which was submitted on 12 February 1990) Bam was employed in Botswana (having worked there since 1 December 1988).


[31] The C46 RA stipulated that for his services Bam would be paid an amount not in excess of DM 279 515 plus 59 019 pounds sterling. The amount actually paid to him amounted to 52.6% of the partnership's profits. It was argued that the manner


29


in which the contract price was structured meant that the costs of the employment of

Bam as a representative in respect of C46 had no impact on the profit generated for Lahmeyer. Even on this assumption it is difficult to accept that a consultant would enter into a bona fide representative agreement which would oblige it to pay a huge percentage of its profits merely because it was not for its account, unless it had good reasons to do so. It speaks for itself that no honest consultant will appoint a representative unless it needs one. This was the attitude taken up in the Acres judgment (para 32). The remarks have equal application in the present matter.


[32] What Bam of course did provide Lahmeyer with, and which rendered his services valuable, was confidential information improperly obtained. According to Putsoane's evidence, had this been known it would have led to the disqualification of Lahmeyer as a participant in the tender process. The likelihood exists that it was for "services" of that kind, and the accompanying arrangements (which could have encompassed bribes), for which Bam probably received the large sums of money he was paid.


[33] We cannot exclude the reasonable possibility that the one legitimate service that Bam may have rendered that was reasonably required by Lahmeyer was the


30


provision of information relating to the Basotho input in the proposals. Much argument was devoted to this during the hearing of the appeal. Lahmeyer contended that obtaining such information would have required a great deal of time and effort by Bam and was indispensable to its prospects of success; the Crown contended to the contrary. By virtue of his association with Lescon and ABC, and bearing in mind that Lesotho has a small engineering community, it would seem that the information Lahmeyer required could have been gathered and presented by Bam without much difficulty. Bam's exclusivity agreement with Lahmeyer and his sub-consultancy prospects might normally have been regarded as sufficient inducement for him to furnish the required information without the need for a formal RA. But while we cannot entirely discount the validity of the services rendered by Bam in this regard, and while there may have been some other services which he legitimately performed which would have entitled him to some remuneration, one thing is clear: the amounts paid to Bam is respect of the C46 RA were disproportionate and excessive having regard to the legitimate services he may have rendered. There is nothing to suggest that the amounts Bam was entitled to in terms of the RAs were intended also to compensate him for having bound Lescon exclusively to Lahmeyer. This was never claimed by Lahmeyer and there is no provision to that effect in the RAs.


31


[34] The defence set great store by the fact that there was no proof that any favour was extended by Sole to Lahmeyer in respect of the award of C46 (and, for that matter, C51 and C1009). Similarly, there was no evidence at all of any improper favour or benefit to Lahmeyer in respect of any payment, variation order or amendment. Nor was there proof of any irregularity in the award process. Much argument was devoted to the elaborate procedures followed leading to the award of a contract to show that ultimately Lahmeyer was awarded all three contracts on merit. the absence of any favour, it was contended, was a stumbling block in the way of an inference of guilt. We do not agree. Proof of a favour would undoubtedly strengthen an inference of guilt. But the absence of a favour does not necessarily detract from such an inference where it is justified on other evidence. Bribery does not only contemplate positive conduct; it can encompass inaction as well. And the object of any bribery could have been that Sole refrain from doing anything to jeopardise Lahmeyer's prospect of securing C46 - in other words, to prevent a repeat of what had happened in the case of C12 and C15.


[35] For reasons that will appear later, Lahmeyer is entitled to succeed in its appeal against count 2. The defence submitted that once count 2 falls away (and the Crown's cross-appeal against Lahmeyer's acquittal on counts 3 and 5 is disregarded


32


for the moment) there is no proof of any payment by Lahmeyer to Sole from prior to

31 December 1990, when the C46 representative agreement was signed, until 13 March 1995, when a payment by Lahmeyer to Bam could for the first time be linked to Sole (count 6). During this period Lahmeyer was awarded C46, C51 and C1009 without any proof that Sole favoured Lahmeyer in any respect. For reasons that will appear later, the Crown's cross-appeal is to succeed in respect of counts 3 and 5. This means that the payment of R100 000 made by Lahmeyer to Bam on 30 April 1992 and the payment of DM34 000 made on 24 January 1995, can be linked to Sole via Bam. There is therefore proof of at least two payments during the period in question. Only payments made through the Swiss accounts can be forensically linked to Sole. But this does not exclude, having regard to the evidence, the reasonable possibility of other payments to Sole by Bam from the large cash payments he received from Lahmeyer in respect of C46. There was money available to Bam which he could have passed on to Sole even though there is no evidence that he did so. The point is that while such payments cannot be proved they can not entirely be discounted either bearing in mind that Bam had the means to make them.


[36] Once Lahmeyer is acquitted on count 2, the remaining 6 counts on which it was convicted cover the period 13 March 1995 (count 6) to 10 April 1997 (count 12).


33


The defence argued that all the alleged corrupt payments to Sole during this period

were therefore made when C46 was virtually completed and C51 substantially completed. And Sole would hardly have been in a position to assist Lahmeyer after he had been suspended on 28 February 1995. All of this is true. By all accounts (whether under a genuine RA or not) Lahmeyer would not have made payments to Bam until after the contracts were secured. Lahmeyer's payments to Bam were dependent upon when it received payments under the contracts. And Bam could only pay Sole when put in a position to do so i.e. after receiving money from Lahmeyer. Any payments would inevitably have been ex post facto in relation to what had been done (or not been done) in the past. Payments to Sole after his dismissal do not militate against a notion of bribery. They would have been paid in respect of a pre­existing obligation (albeit an unlawful and unenforceable one). Lahmeyer was in any event bound to pay Bam in terms of what it alleged was a valid legal contract. It could also not risk incurring Bam's wrath by not honouring its agreement with him.


[37] The defence also sought to argue that the fact that all payments by Lahmeyer to Bam were reflected in Lahmeyer's records and properly accounted for pointed to the genuineness of the RAs. This is a neutral factor. If the RAs were designed to hide an unlawful relationship it would still be necessary to account for the payments


34


to Bam to give them a pretence of legitimacy. So whether the RAs were genuine or

not, the monies paid to Bam would still have had to be accounted for. Moreover, these records would have been needed for tax purposes.


[38] In what we have said above we have concentrated on C46 although there has been a measure of overlapping with C51 and C1009 in regard to matters common to all three. We do not propose to deal in detail with the RAs in respect of C51 and Wl 009. What has been said in relation to C46 applies, generally speaking, with equal (if not greater) force to C51 and C1009 because as time went by there would have been correspondingly less and less need for Bam's services. There is one significant difference between the C46 and C51 RAs. The latter made provision for ACPM to "assist LMC in seeking amendments to the contract for additional remuneration." This has a somewhat sinister connotation implying as it does the pursuit of greater financial gain. The amendments envisaged could probably only have been in the form of variation orders. Why C51 makes provision for that is not clear. Variation orders arise in the operations' field in relation to work being done and it is not apparent what role Bam could legitimately have played in relation thereto. However, we do not attach any particular significance to this. In relation to C51 we bear in mind that the RFP required an input of 30% of ACP (African, Caribbean, Pacific) states


35


origin, and that C46 and C51 did not require identical engineering skills. Bam would

therefore have had to provide additional information to supplement that previously provided, In respect of C1009 no input of that kind would have been necessary as all the relevant information was for the first time contained in the pre-qualification documents, presumably to neutralize the advantage which Lahmeyer had previously had in this regard. On a consideration of the evidence we are of the view that Lahmeyer would have required even less of Bam's services under C51 and C1009 than C46. Yet it continued to pay Bam vast sums of money.


[39] It was further argued that the Crown had failed to exclude other reasonably possible explanations for the payments by Bam to Sole save that of bribery by Lahmeyer. In this regard the main theory put forward was that Bam may have paid (bribed) Sole to favour himself or Lescon/ABC. There is no evidence to support this suggestion which is essentially speculative in nature. It overlooks the large sums of money paid by Lahmeyer to Bam, totally disproportionate to such services as Bam may have rendered legitimately, and the passage of money from Lahmeyer to Bam and from Bam to Sole. This would seem to negate any suggestion that Bam was the actual source of the payments to Sole. Furthermore, because of the local Basotho input requirements, and leaving out any exclusivity arrangements, Bam through


36


Lescon/ABC was always going to have a share in the contracts on offer. With regard

to sub-consultancy work, this was a matter for the approved consultant, not Sole, to determine, so that there would be no need to pay Sole for a favour in respect thereof. In our view the evidence discounts the reasonable possibility of Bam paying Sole for his own or Lescon/ABC's account. No other reasonable explanation suggests itself to us on the evidence why Sole would be paid money originating from Lahmeyer.


[40] A further question which arises is whether any inference can be drawn from the fact that Lahmeyer failed to call Spiess as a witness? There is no doubt that Spiess would have been able to give material evidence concerning the following aspects:


  1. Lahmeyer's relationship with representatives generally, and in particular with Bam.


  1. Most importantly, the alleged representative agreement which Spiess and Bam had reached, either orally or in writing, in March 1987 in Lesotho.


  1. The exclusivity agreement which Spiess, Emsmann and Bam had concluded in the summer of 1989 at the Frankfurt airport.


  1. The conclusion of the three written representative agreements in respect of C 46, C 51 and C 1009 and the terms thereof.


  1. The reason why Spiess came to Lesotho in March 1987 and what impact the loss of C12 and C15 had.


37


Counsel for the Crown pointed out that Spiess was not called to give evidence on behalf of Lahmeyer and asked the Court to draw the inference that Lahmeyer did not wish him to give evidence as his evidence would not have favoured Lahmeyer.


[41] It was held in the case of Elgin Fireclays Ltd v Webb 1947(4) S.A. 744 (A) at 749-750 :


"that if a patty fails to place the evidence of a witness, who is available and able to elucidate the facts, before the trial Court, this failure leads naturally to the inference that he fears that such evidence will expose facts unfavourable to him."


There can be no doubt that Spiess was clearly "able to elucidate the facts". The question then remains whether he was "available". (See also Minister Estates (Pty) Ltd v Killarney Hills (Pty) Ltd, 1979(1) SA 621(A) at 624B-625H.)


[42] Hecker's written statement, which he confirmed in the course of his evidence, contains the following information about the availability of Spiess:


" I was asked by Lahmeyer and Lahmeyer's counsel to request Dr. Spiess and Dr. Zimmermann if they would be prepared to come to testify in South Africa. I know both of them on a personal level. Dr. Spiess has retired some 9 years ago from Lahmeyer. He is in his seventies and he is now old. He made it very


38


clear that he has no intention to come to Lesotho and testify for days about events, of which some he no longer has a clear recollection".


What Spiess told Hecker is of course hearsay. However, the reason which Hecker gave was that Spiess no longer has a clear recollection of the events.


[43] Hecker in the course of his evidence in chief gave an additional reason why Spiess would not testify, i.e. "health reasons", but without elaborating thereon. Counsel for the Crown objected to his evidence as hearsay, whereupon counsel for Lahmeyer stated that Spiess would not come and testify and that Lahmeyer was not going to place other evidence before the Court in regard to the reasons why Spiess was not going to be called as a witness. When Hecker was cross-examined three days later he replied as follows when it was put to him that Spiess had been perfectly able to deal with matters in May 2001:


"Well, I know Mr Prosecutor that Dr Spiess in the meantime was very sick, he had cancer or something like that. This I know, maybe this has affected

him, but I cannot give my opinion on his...... memory or capacity, I did not

see Dr Spiess since ten years at least."


The shift in Hecker's evidence is apparent and we regard his evidence in this respect as disingenuous. Defence counsel on this occasion remarked as follows:


39


"The evidence was that Dr Spiess told this witness that he is retired, that he is in his seventies and for health reasons he will not come, not that he is not available, he is available."

[44] Lahmeyer could also have resorted to other recognised procedures which would have enabled it to place Spiess' evidence before the court a quo such as evidence on commission. Neither did it produce any admissible evidence that he was for health or other reasons unable to testify. The conclusion to which we come is that Spiess was indeed available to give evidence and that there is no admissible evidence to explain why Lahmeyer failed to call him as a witness. Lahmeyer's failure in these circumstances leads to the inference that it feared that such evidence would expose facts unfavourable to it. This is a further consideration to be taken into account in determining the question of Lahmeyer's guilt.


[45] The ultimate question for determination by this Court is whether, in the light of all the evidence adduced at the trial, Lahmeyer's guilt was established beyond reasonable doubt. This translates into whether the only reasonable inference to be drawn, consistent with all the facts, is that Lahmeyer bribed Sole via Bam. As was so aptly observed by this Court in Moshepi and Others v R (1980-1984) LAC 57 (and quoted in the Acres judgment (para 17):


40


"The breaking down of a body of evidence into its component parts is obviously a useful aid to a proper understanding and evaluation of it But, in doing so, one must guard against a tendency to focus too intently upon the separate and individual part of what is, after all, a mosaic of proof. Doubts about one aspect of the evidence led in a trial may arise when that aspect is viewed in isolation. Those doubts may be set at rest when it is evaluated again together with all the other available evidence. That is not to say that a broad and indulgent approach is appropriate when evaluating evidence. Far from it. There is no substitute for a detailed and critical examination of each and every component in a body of evidence. But, once that has been done, it is necessary to step back a pace and consider the mosaic as a whole. If that is not done, one may fail to see the wood for the trees."


[46] It is common cause that the evidence with regard to counts 6, 7 and 9 to 12 establishes a flow of money from Lahmeyer to Bam and in turn from Bam to Sole. It was conceded on behalf of Lahmeyer that bribery could have been the cause of the payments to Sole, but it was contended that this had not been proved beyond all reasonable doubt. We are satisfied on a conspectus of all the evidence, and having duly stepped back a pace to "consider the mosaic as a whole" that, applying accepted principles of inferential reasoning, the only reasonable inference to be drawn in the present matter is that Lahmeyer paid Bam money for the purpose of bribing Sole, that the money that was passed on to Sole by Bam in respect of the counts in question was in furtherance of that purpose and that the RAs were not genuine in that they were


41


primarily entered into as devices to disguise the true relationship between Lahmeyer

and Bam and to facilitate unlawful payments to Sole. In the result Lahmeyer's appeal against its conviction on counts 6, 7 and 9 to 12 falls to be dismissed.


[47] Lahmeyer's conviction on count2 falls into a different category. The defence submits that there are special circumstances why Lahmeyer should have been acquitted on this count, particularly because Lahmeyer's payment to Bam could not the linked to Sole. It is the Crown's case that Lahmeyer on 8 February 1991 paid FRF 135760 (DM 40 000) into a Swiss account in the name of Mrs Bam and that this money was subsequently used to make up the sum of FRF 458 600 which was transferred on 4 March 1991 from Mrs Bam's account to a Swiss account of Sole.


[48] The following payments in French francs were made into one of Bam's Swiss accounts during the period 9 June 1989 to 15 August 1990.


Four payments from Dumez totalling :................ 1 145 857


A cash payment: ................................................ 110 025


Lahmeyer's DM10 000 payment to Bam in

respect of the Mafeteng dam contract


(Cf Count 1): ................................................ 34013-


A transfer from Bam's Amsterdam account:..... 163 220


42


It appears that these deposits consisted mainly of payments made by Dumez to Bam.


Some smaller amounts were debited and credited to this account. On 23 October 1990 Bam transferred FRF 1 020 000 from this account to Mrs. Bam's Swiss account Thereafter Dumez made a further payment of FRF 194 370 into Mrs Bam's account on 20 December 1990. This payment brought the total contribution by Dumez to the pool of money to FRF 1 340 227. On 8 February 1991 Lahmeyer paid FRF 135 760 (DM 40 000) into Mrs Bam's account, bringing Lahmeyer' s total contribution to the pool to FRF 169 773. This latter payment of FRF 135 760 by Lahmeyer to Bam formed the subject matter of count 2.


[49] On 4 March 1991 Bam authorised the transfer of FRF 458 600 from Mrs Bam's account to one of Sole's Swiss bank accounts. It was the evidence of Mr Roux ("Roux"), the forensic accountant who testified for the Crown, that "the 135 760 formed part of the bigger pool out of which the 458 600 was paid". Roux conceded that it was "possible" that the money could have come only from Dumez, but concluded that the FRF 135 760 paid by Lahmeyer "probably" formed part of the FRF 458 6000 which was paid to Sole. In our view the probabilities point the other way. The total contribution by Lahmeyer formed but a small portion of the bigger pool from which the FRF 458 600 was paid to Sole and it is clear that the payment to Sole


43


could have been made without any contribution by Lahmeyer. There is certainly no

reason to conclude that Bam specifically intended to use Lahmeyer's money to pay Sole in this instance.

[50] There is, however, a more compelling reason for finding that Lahmeyer's payment of FRF 135 760 to Bam was never intended to be paid to Sole. The defence submits that the overwhelming probabilities point to the conclusion, that the payment Cf FRF 458 600 to Sole was intended to be a payment by Acres. The following facts support this conclusion. Mrs Bam had a Canadian dollar bank account with the BMC bank in Switzerland (account no. 16018/05.02 CAD) into which Acres paid CAD 180

000 on 31 January 1991. Mrs Bam also had a French franc bank account with the BMC bank (account no. 16018/03.06). Bam gave instructions to the BMC bank on 1 March 1991 to transfer CAD 100 000 "in FF" to Sole's Swiss account, but without specifying from which account the payment had to be made. (CAD 100 000 was the equivalent of FRF 458 600 at the then applicable exchange rate of 4,5860.) The bank then transferred the FRF 458 600 to Sole on 4 March 1991 from Mrs Bam's French franc bank account and not from her Canadian dollar bank account. It is also interesting to note that Sole and Bam shared the CAD 180 000 and some interest thereon on the same basis that they used to share other Acres payments, i.e. on an


44


approximately 60/40 basis, where Sole got 60% and Bam 40%. This Court held in

the Acres appeal that that was the basis on which the Acres payments were shared between Sole and Bam - see the Acres judgment (paras. 5.11 and 35).


[51] In our view the Crown has failed to prove any link between Lahmeyer's payment of FF135 760 to Bam and Bam's payment of FRF 458 600 to Sole. The probabilities in fact show that the payment to Sole derived from Acres and not from Lahmeyer. In the circumstances the Crown has failed to proved its case on count 2 and Lahmeyer's appeal against its conviction on count 2 accordingly succeeds.


THE CROSS-APPEAL BY THE CROWN


[52] We now turn to consider the cross-appeal by the Crown against the acquittal of Lahmeyer on counts 3, 4, 5 and 8. COUNT 3.


The court a quo found that Sole's Swiss account was credited with an amount of R50 000. It was not satisfied that the Crown had proved that the money had emanated from Lahmeyer. We were however informed that it was common cause that Lahmeyer paid Bam Rl 00 000 on 30 April 1992 and that Bam in turn paid Sole R50


45


000(50%of theR100 000)on 21 May 1992. A link between Lahmeyer and Sole has therefore been established and this count must accordingly be dealt with on the same footing as counts 6, 7 and 9 to 12.


Lahmeyer sought to give an innocent explanation for Bam's payment of R50 000 to Sole in this regard. It is common cause that Bam leased a house from Sole. It appears from a schedule of payments which defence counsel handed up to the Court that Bam owed Sole M36 000 as at 1June 1992 for arrear rentals. Counsel submitted that the R50 000 which Bam admittedly paid Sole on 21 May 1992 could possibly have been in respect of arrear rental. In our view this explanation is mere speculation and highly improbable. The schedule of payments does not reflect any payment to Sole in respect of arrear rental during the relevant period. The first payment in respect of arrear rental appears to have been made more than a year later on 2 June 1993 in the total sum of M10 139. It also seems strange that Bam would have paid Sole in Switzerland for the rental of Sole's house in Maseru. In our view the Crown's cross-appeal in respect of count 3 should therefore succeed.


[53] COUNTS 4 AND 8.


In both these counts the payments by Lahmeyer to Bam were proved, but the Crown failed to establish that these payments could be linked to Sole. The court a


46


quo accordingly acquitted Lahmeyer on these two counts. Once it is accepted that

some of the monies paid by Lahmeyer to Bam may have been paid for services genuinely rendered by Bam it would be necessary for the Crown, in order to secure a conviction, to establish a link between Bam and Sole. The Crown could not prove such a link in these instances and its cross-appeal on counts 4 and 8 must therefore fail.


[64]COUNT 5.


Lahmeyer was acquitted on count 5 because the court a quo was not satisfied that Lahmeyer's payment of DM34 000 on 24 January 1995 was intended for Bam, but even if it was, the court was not convinced that the amounts of USD 10 007,98 and USD8 500 which Bam transferred to Sole's Swiss account emanated from Lahmeyer's DM34 000 (USD22 173,91) payment. The Crown appealed against this decision.


It appears to be common cause that Lahmeyer intended to transfer and in fact did transfer DM34 000 to Bam. Lahmeyer however denies that this payment can be linked to Sole. The movement of money was as follows: Lahmeyer transferred DM34 000 on 24 January 1995 to Bam's DM account; Bam converted the DM34 000 on the same day into USD22 173,91 and transferred these dollars to his USD account.


47


Three days later Bam transferred USD 10 007,98 (± 45% of the original DM34 000)

to Sole. A month later Bam transferred a further USD8 500 (± 38% of the original DM34 000) to Sole.


The fact that Bam paid Sole in USD is not odd at all. At least seven other payments by Bam to Sole were made in USD. It is somewhat unusual on the other hand that Sole in this instance got 83% of Lahmeyer's R34 000 payment instead of his usual 50%. This does not however change the fact that Lahmeyer's payment to Bam can the connected to Sole. A link has therefore been established and this count must also be dealt with on the same basis as counts 3, 6, 7 and 9 to 12. In the result the Crown's cross-appeal in respect of count 5 also succeeds.


SENTENCE

[55] In view of our findings set out above, it is open to this Court to re­consider the propriety of the sentence imposed on Lahmeyer. It is clear from the judgment of the court a quo that it sentenced Lahmeyer separately on each of the counts on which it convicted it. The cumulative effect of the various sentences imposed on each count was that Lahmeyer was ordered to pay a fine in total of Ml 0 650 000. Quite apart from the fact of the alteration in the verdicts of the


48


court, which requires a re-consideration of the sentence, the Crown appealed against the sentence imposed. It did so in the following terms:


"The sentences imposed on the different counts, relative to each other, are disproportionate and irrational and, in addition, the cumulative effect of all the sentences are lenient to the extent of them being startlingly and/or disturbingly inappropriate when viewed in the context of the seriousness of the crimes, the amounts involved, the position of the accused, the harm inflicted on the water project and in fact on Lesotho, as well as the need to deter other contractors/ consultants from similar criminal conduct."


[56] Lahmeyer alleged that the Crown did not have a right of appeal. It sought in this regard to rely on the provisions of section 7(2) of the Court of Appeal Act (Act 10 of 1978) which limited the right of the Crown to appeal only if such appeal is directed against the judgment of the High Court ''upon a point of law". This provision was, however, amended by Act 8 of 1985. Section 7(2) was repealed and substituted by the following provision:


"(2) If the Director of Public Prosecutions is dissatisfied with any judgement of the High Court on any matter of fact or law, he may appeal against such judgement to the court."


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[57] This amendment confers upon the Crown the same rights as those conferred on an accused in section 7(1) of the 1978 Act. Counsel for Lahmeyer sought to import a limitation into the provisions of this section which is in conflict with its clear and unambiguous provisions. Moreover, if this were to be done the result would be that an accused would also be denied a right of appeal against sentence, because the two provisions are in identical terms. We will therefore proceed to consider the propriety of the sentence of the court a quo both by virtue of the alteration effected to its verdicts and the appeal by the Crown.


[58] The principles upon which a sentence is determined by this Court has been clearly stated on many occasions and most recently in Ramaema v Rex C of A (CRI) 8 of 2001. The following considerations apply :


  1. The determination of an appropriate sentence is pre-eminently a matter for the court that tries an accused. Provided that it exercises its discretion judicially and after due consideration


50


of all the relevant facts a court of appeal would be loath to interfere and substitute its discretion for that of the court a quo. It is only if the sentence is "startlingly or disturbingly inappropriate" that it will revisit the propriety of the sentence imposed.


  1. The triad of factors that have to be considered by a court when determining sentence are also well-known. Holmes J.A. identified these as follows in 5 v Rabie_\915 (4) SA 855 (A) at 862:


"Punishment should fit the criminal as well as the crime, be fair to society and be blended with a measure of mercy according to the circumstances."


In the same judgment at 865 - 866 Corbett J.A. (as he then was) after referring to Voet and van der Linden notes the following comment on a passage quoted by the latter from Seneca on ''Mercy'':


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"Severity I keep concealed - mercy ever ready".


Van der Linden concludes with the warning that "misplaced pity is no less to be censured".


The learned judge then concludes as follows:


"Despite their antiquity these wise remarks contain much that is relevant to contemporary circumstances. (They were referred to, with approval, in 5 v Zinn, 1969 (2) S.A. 537 (A.D.) at p. 541). A judicial officer should not approach punishment in a spirit of anger because, being human, that will make it difficult for him to achieve that delicate balance between the crime, the criminal and the interests of society which his task and the objects of punishment demand of him. Nor should he strive after severity; nor, on the other hand, surrender to misplaced pity. While not flinching from firmness, where firmness is called for, he should approach his task with a humane and compassionate understanding of human frailties and the pressures of society which contribute to criminality. It is in the context of this attitude of mind that I see mercy as an element in the determination of the appropriate punishment in the light of all the circumstances of the particular case."


It is this approach which this Court of Appeal affirms it will adopt when considering the proper sentence to impose on an offender.


  1. A court deciding on what sentence to impose would seek to


52


avoid inconsistency. In Molapo v Rex 1999 - 2000 LLR&LB

(C of A) 316 at 321 this Court expressed itself as follows:

"However, in determining sentence the following factors must in our view also be taken into account:


  1. Offenders who have the same or similar degrees of moral guilt and involvement in the commission of a crime, should, in the absence of circumstances that justify discrimination, be treated equally. The Court's impartiality and fairness could be seriously questioned if marked disparities between offenders whose moral guilt is indistinguishable from one another were to occur. The fact that the appellant's co-conspirators were each sentenced to 2 years imprisonment and that the appellant's guilt is certainly no greater than theirs is therefore a compelling factor in determining his sentence."


See also the Acres judgment cited above (at para 57).


[59] With due regard to the above considerations we proceed to record counsels' submissions and our views concerning the sentence to be imposed on Lahmeyer as follows .


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Counsel for the Crown sought to contend that were we to apply the principle of

consistency the sentence imposed upon Lahmeyer is startlingly inappropriate, particularly when viewed in the light of and compared with that imposed in the matter of Acres (Ml5 000 000). He contended inter alia that Acres was only convicted on one count, that the bribes paid were less than those in the appeal in casu and the contracts much less valuable in money terms.


[60] Per contra, Lahmeyer's counsel argued that it would be artificial to give weight to the fact that Lahmeyer was convicted on many more counts. Acres could similarly have been charged on several counts but the Crown consolidated the various transactions in two counts. He also urged us to have regard to the fact that, particularly if count 2 falls away, the value of the contracts involved and the quantum of Lahmeyer's profits would be significantly less than those in the Acres case. Moreover ,Lahmeyer's profits had to be shared with its joint venture partner. Defence counsel also submitted that the degree of Lahmeyer's moral guilt had to be assessed in the light of the fact that it was unlawfully deprived of the award of C12 and C15 by the unlawful conduct of a competitor. It had lost several hundred thousand DM as a result. Its appeal to the World


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Bank failed and it only participated in corrupt practices because it had good grounds for thinking that it had to do so in order to secure contracts, despite the clear merits of its tender. It was also established in the evidence that Lahmeyer had won its contracts on merit and that it had performed its obligations meticulously and to the highest standards.


[61] When assessing the weight to be given to the various submissions made by both counsel, the Court must be careful not to lose sight of the important considerations that have a special significance in matters involving corruption. Many of these have been set out in the Acres judgment. (See more particularly the comments at paras 62,63,64 and 66). However, it is important for this Court also to record its views concerning the crime of bribery. The fact of the matter is that "..bribery is an offence that is difficult to prove and the imposition of deterrent sentences is ....justifiable to combat its occurrence." (S v Makhunga 1964 (3) S.A. 513 (C) at 516 H.) See also S v Narker and Another 1975 (1) S.A. 583 (A) at 586 where Holmes JA says the following op.cit


"Bribery is a corrupt and ugly offence striking cancerously at the roots of justice and integrity, and it is calculated to deprive society of a fair administration. In general Courts view it with abhorrence; see R. v. Chorle


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1945 A.D. 487 at 496 -497 and Limbada v. Dwarka 1957 (3) S.A. 60 (W)".


In Crown v. Sole this Court said (at para 109) "corruption is inimical to sound public administration, itself essential to the strength of constitutional democracy; it also threatens investor confidence, development projects and employment......"


There can be no doubt that in all societies, but more particularly in developing societies, bribery can seriously affect the capacity of a country to uplift its people and free them of the bondage of poverty.


[62] We have had due regard to matters such as consistency and the factors that could be said to mitigate the guilt of the accused. However, the bribes paid to sole as chief executive officer via Bam as intermediary are particularly reprehensible because of the following considerations.


1. The project on which Lahmeyer was engaged was an innovative, bold initiative designed to generate longer term economic benefits, stability and


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greater independence for the Kingdom of Lesotho. The decline in the employment opportunities in the gold-mining industry and the diminishing income generated by the Lesotho migrant workers, called for a major intervention that would not only create jobs, but would also establish a long-term income generating resource which would serve the country well for many generations.


2. It should be noted that the plight of this land-locked Kingdom, starved as it is of natural resources, was recognized by the international community. Institutions such as the World Bank, the S,A. Development Bank and the European Community saw the LHWP as a major opportunity to invest the resources of the international community in a massive poverty-alleviation initiative, also providing much needed water to Lesotho's neighbour. The international donor community also availed themselves of the opportunity to participate in a project that could gear up on scarce donor funds.


3. For those entrusted with the responsibility of implementing the project, it provided an opportunity to participate in a venture that would not only


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generate profits for their enterprises, but could, in view of its size and

complexity hone the skills and enhance the experience of its technical and managerial personnel. The nature of the project, the identity of its flinders and its ultimate goal, not only made this a challenging and rewarding venture, but created a special trust relationship between them, the flinders and the LHDA.


4. The cynical act of bribing officials with large sums of money with the object of obtaining contracts and when necessary variation orders to such contracts, violated the trust reposed in them by all the parties involved. In the end, and as a matter of fact, the outcomes were that the bribes were actually paid by the LHDA, the international funders and the donors.


5. The evidence placed before us paints a picture of bribery on a massive scale, not only by Lahmeyer but also by others. It is therefore incumbent on this Court and those who can contribute to combating practices of this kind to do what we can within our mandates and to act resolutely in this respect.


[63] The courts' obligation is, firstly, to speak clearly about the abhorrence of


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the crime of bribery and its destructive impact on a society - particularly upon a developing society where poverty is still endemic. Secondly, to ensure that the sentences they pass have a real deterrent impact and will cause those who participate in these projects to think twice before embarking upon corrupt practices. It speaks for itself that the courts may not punish excessively or unfairly and must only give due and proper weight to the deterrent aspect of punishment.


[64] However, it is also incumbent on the international community and particularly the funding agencies to revisit those practices and procedures it has in place and to use those sanctions it has the power to impose whenever contraventions of the kind proved in respect of this project occur. One of the devices employed in various cases that served before this Court was the use of "representative agreements'1. They were used extensively as mechanisms through which payments intended as bribes were clothed with contractual respectability. They were in fact, in all the cases before us, used as cloaks to disguise and obfuscate the money trail. It required intensive research, expensive court procedures across international boundaries and tiresome and time-


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consuming efforts to obtain the necessary information to unravel the complex evidential strands required to determine and thus to provide the necessary evidence. Above all it required political will and the provision of the necessary resources. To their credit the Lesotho authorities did this in full measure. They should be commended for their resolve.


[65] This Court trusts that the various funding agencies will have regard to the above comments; that it will revisit its practices and procedures in general, but for present purposes, more particularly the practice of the employment of representatives who can play the obfuscating role played so frequently in this mammoth project. But also, that it will be firm and resolute in enforcing its disciplinary proceedings on any agency, company, individual or institution who participates in the practice of bribing those employed on development projects.


[66] Having said that, we now proceed to determine the sentence. As indicated above the High Court sentenced Lahmeyer to a fine totalling M10 650 000. However it arrived at this quantum after sentencing Lahmeyer on each one of the counts charged. As will be evident from our judgment we are of the view


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that all these payments were not made pursuant to the various representative agreements, but were paid in terms of an agreement or understanding that, provided contracts were awarded to Lahmeyer, payments would be made to Bam as a reward for securing the contracts and that he would on-pay at least part of such payments to Sole. In these circumstances, despite the fact that Lahmeyer has been acquitted on count 2, and that the Crown has succeeded in securing a conviction on counts 3 and 5 on which Lahmeyer was acquitted in the court below, we believe we should look at and assess Lahmeyer's guilt in relation to the crime viewed as a whole.


We say this because on the facts of this case it would be artificial to determine sentence by compartmentalising Lahmeyer's conduct into its component parts, and to pass a sentence on each component. The truth of the matter is that Lahmeyer bribed Sole via Bam in terms of what was in effect one unlawful agreement, albeit that payments were allocated cosmetically to accord with the terms of three separate deceptive so-called representative agreements. This was done in an attempt to give a legitimate colour to an illegitimate transaction. It was essentially one crime, which calls for one sentence, determined in


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accordance with Lahmeyer's guilt viewed as a whole.


[67] It follows that in view of the considerations set out above and below in this judgment we are obliged to re-consider the sentence imposed by the trial court. In doing so we are not constrained by the fact that the court a quo imposed the sentence it did. These considerations include the following:


1. The court below erred in convicting Lahmeyer on count 2. It also erred in not convicting Lahmeyer on counts 3 and 5.


  1. Splitting the sentences in the way the court did was in the circumstances of this case not appropriate and produced an unacceptable result.

  2. The correct approach on the facts of this case was for the court to have assessed the degree of Lahmeyer's moral guilt viewed as a whole and in the light of the considerations set out above.


[68] Adopting this approach we conclude as follows :


  1. There is a clear need for the passing of a deterrent sentence.


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  1. Viewed as a whole the moral guilt of Lahmeyer is less than that of the appellant in the Acres case.


  1. However, this difference is not so great as to justify a large reduction in the quantum of the fine to be imposed compared to that in the Acres case.


Having given due weight to both the aggravating and extenuating circumstances and especially having regard to the possible sanctions which may be imposed on Lahmeyer by the international funding agencies, we regard a sentence of a fine of M12 000 000 to be an appropriate sentence.


[69] In the result this Court makes the following Order:


  1. The appellant's (Lahmeyer's) appeal against its conviction on count 2 is upheld and the conviction on that count, and the sentence in respect thereof, is set aside.


  1. The appellant's appeal against its conviction on counts 6,7,9,10, 11 and 12 is dismissed.


  1. The Crown's cross-appeal on the merits succeeds to the extent that the court a quo's finding of not guilty on counts 3 and 5 is set


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aside and the appellant is found guilty on those two counts.


  1. The Crown's cross-appeal against sentence is upheld. The sentence is altered to read: "All counts taken together for purposes of sentence: The accused is sentenced to the payment of a fine of 12 Million Maloti.


  1. The effect of the above is as follows:


5.1 The appellant is guilty on counts 3,5,6, 7,9, 10,11 and 12;


5.2 The sentence imposed on all counts taken together is 12 Million Maloti.


J.H.Steyn

PRESIDENT


F.H. Grosskopf

JUDGE OF APPEAL


J.W. Smalberger

JUDGE OF APPEAL


Delivered in open Court this 7th day of April 2004.


For Appellant : Mr. S. Alkema SC and Mr. K.J. Kemp SC

For Respondent : Mr. G.H. Penzhom SC and Mr. H.H.T. Woker