Gupta-linked company in R93bn Transnet loco loan deal

The investigative
journalistic team,
amaBhungane, has lashed
out at what is referred to
as a ‘shady deal’ between
Transnet and a Guptarelated
business unit.
Transnet, it noted, had
paid a rather
significant
R93 million
to the rather
insignificant
firm, Trillian
Asset
Management
– where
Gupta
lieutenant
Salim Essa
is the sole
director
of the
company that
controls it.
And that, amaBhungane
added, without any
tender procedure being
conducted – despite that
being a necessary protocol
for any deals by parastatal
companies.
And a press report said
that the rationale for paying
Trillian was “as thin as the
fee appeared exorbitant”.
In this deal,
amaBhungane said that
the state rail company had
paid Trillian to ‘arrange’ a
remaining amount of the
R50bn required to buy
1 064 locomotives.
The fee was for arranging
what is described as a ‘club
loan’, and internal Transnet
sources revealed that its
own treasury, one of the
country’s biggest, could
easily have arranged such
a loan.
Club loans are simpler
than syndicated loans. For
syndicated loans, a “lead
arranger”
assumes
the risk
of placing
parts of
the debt
with other
lenders.
But with
club loans
each lender
contracts
directly
with the
borrower,
and this was
the situation
with the Transnet deal.
Yet, according to
amaBhungane, Trillian
invoiced Transnet R82
million – R93.48 million
including VAT – and was
paid in December 2015, the
month after the loan was
signed.
Transnet justified the
tender-free award to
Trillian on the grounds
that it was the ‘supplier
development’ partner
of another company
already contracted. But,
lo and behold, the other
company, Regiments
Capital, absolutely denied
this supposed partnership
actually existed.
And evidence available to
amaBhungane revealed that
Regiments had conducted
the deal and was paid for
that. The result of this was
that Transnet might have
effectively paid twice for the
same job.
The amaBhungane
investigation also dealt in
some depth with a great
deal of other rather shady
matters surrounding both
the deal and company share
acquisitions, and their
timing, involving Trillian.
The team also produced
evidence of some rather
dubious relationships
between parties in the
company and in Transnet.
Trillian declined to
comment on the issue to
amaBhungane, but, in part
of its justification of the
deal, Transnet said: “….in
terms of these processes,
all service providers in
this transaction were paid
for services rendered after
we had satisfied ourselves
that all obligations were
fulfilled in terms of agreed
contractual scope. We
have sufficient checks and
balances to ensure we derive
value from all contracts.”
But the end result of the
investigation only added to
the body of evidence that
state-owned companies had
been “captured” for profit
by the Gupta family and
associates.
INSERT
Trillian invoiced
Transnet R82 million
— R93.48 million
including VAT — and
was paid in December
2015, the month after
the loan was signed.