From CompliNEWS | Financial Services Intelligence Watch

Mpumalanga High Court (Mbombela)

Parties: Mncwango v State (A39/2025) [2026] ZAMPMBHC 46 (29 May 2026) Judgment date: 29 May 2026

Keywords: Criminal law – appeal – theft – money laundering – Criminal Procedure Act 51 of 1977, s 236 – bank records – s 236 affidavit – hearsay evidence – substantial compliance – commissioner of oaths – regulations governing administration of oath – fair trial – verdict – procedural irregularity

Summary

The appellant, Jacob Zenezele Mncwango, was charged in the Regional Court, Mbombela, together with two co-accused, with fraud (alternatively theft) and two counts of money laundering. The charges arose from alleged misrepresentations made in 2012 to the Department of Rural Development & Land Affairs, Mpumalanga (DRDLA), whereby R2.95m intended for the Endloveni Community was paid to Sadia Enterprises Trading CC (Sadia) for services never rendered. An amount of R2.3m was subsequently transferred into the bank account of JM Mncwango Trading CC (the CC), of which the appellant was the sole member and signatory. The investigating officer, Sergeant Bhiya, admitted during cross-examination that no funds were paid into the appellant’s personal account and that the CC, not the appellant personally, received the funds. The appellant elected not to testify. The regional magistrate convicted the appellant of theft and money laundering, sentencing him to 10 years’ imprisonment (three years conditionally suspended) and three years’ imprisonment for money laundering, ordered to run concurrently. No verdict was pronounced on the main count of fraud or on count two of money laundering.

Discussion

The central issue on appeal was whether exhibits F and G (bank statements of Sadia and the CC) were properly admitted under s 236 of the Criminal Procedure Act 51 of 1977 (CPA), which permits bank records to constitute prima facie proof upon production of a compliant affidavit, dispensing with the need for viva voce evidence.

The court held that strict compliance with the regulations governing the administration of oaths (prescribed under the Justices of the Peace and Commissioners of Oaths Act 16 of 1963) is required, as s 236 constitutes a departure from the common law rule against hearsay. The court found multiple defects in the s 236 affidavit: The commissioner failed to indicate whether the deponent was male or female, omitted the date of commissioning, and did not include his full name or official stamp.

Applying Absa Bank Ltd v Botha NO and Others [2013 (5) SA 563 (GNP) (7 June 2013)] at para 10 and Lohrman v Vaal Ontwikkelingsmaatskappy (Edms) Mpy [1979 (3) SA 391 (T) at 395], the court held there was no substantial compliance, rendering the bank statements inadmissible hearsay. The appellant’s argument that Bhiya, as both commissioner and principal investigating witness, had a disqualifying interest was rejected, following Kouwenhoven v Minister of Police and Others [ 2022 (1) SACR 164 (SCA) at para 34] and S v Sihlobo [ [2004] JOL 12831 (Tk) at para 18], on the basis that his interest was solely that of a state employee acting in the course of duty. A further procedural irregularity was identified: the magistrate had failed to pronounce a verdict on the main fraud count and on count two of money laundering. Applying Tuta v S (CC), the court affirmed the duty to deliver verdicts with finality as an aspect of the right to a fair trial.

Order

The appeal was upheld. The convictions of theft (count one alternative) and money laundering (count three) were set aside. The appellant was found not guilty and discharged on the main count of fraud and on count two of money laundering.

Read the Judgment here

Compliance Insights by Compli-Serve

While the judgment arose in a criminal law context, it contains several important lessons for compliance professionals, financial institutions and investigators involved in financial crime matters. The case demonstrates that the existence of banking records alone is not sufficient; the manner in which those records are obtained, authenticated and presented to a court is equally important. Technical deficiencies in affidavits or evidential processes can ultimately undermine an otherwise substantial prosecution.

For accountable institutions and financial service providers, the ruling reinforces the importance of maintaining accurate, complete and readily retrievable records. Financial records frequently form the foundation of fraud, money laundering and corruption investigations, and organisations should ensure that record retention, data integrity and evidentiary standards are properly incorporated into their governance and compliance frameworks.

The judgment also serves as a reminder that procedural fairness remains a fundamental component of the legal process. Regulators, investigators and prosecutors must ensure that evidence is gathered and presented in strict accordance with legislative requirements. Failure to comply with these procedural safeguards may result in otherwise relevant evidence being excluded, potentially compromising enforcement outcomes.

From an AML and financial crime perspective, the decision highlights the critical role that reliable financial records play in tracing the movement of funds and establishing links between parties. However, it equally demonstrates that successful financial crime enforcement depends not only on identifying suspicious transactions, but also on ensuring that the evidence supporting those findings can withstand judicial scrutiny. For compliance officers, the lesson is clear: strong record keeping, proper documentation and adherence to process are essential components of an effective financial crime control environment.