Gupta-linked Trillian Capital Partners attempted to get Bain & Co a foot in the door at Transnet, one of the country’s strategic state-owned entities that has been dogged by allegations of corruption and mismanagement.
Business Day is in possession of a letter from Trillian CEO Eric Wood to former Transnet CFO Garry Pita — who was also linked to the controversial Gupta family, friends of former president Jacob Zuma — asking for approval for Trillian to share information with Bain regarding Transnet and work done on the general freight business project.
Pita, who resigned from Transnet in April, was accused in documents from whistleblowers of signing off on payments to Trillian totalling R74m, at the time when it was owned by Gupta lieutenant Salim Essa.
Wood was Trillian CEO at the time.
Trillian was also at the centre of allegations that engulfed another global consultancy, McKinsey & Co, which earlier in 2018 paid back more than R900m it received from Eskom for work it was awarded in 2016. The balance of the R1.6bn contract was paid to Trillian, which was purported to be McKinsey’s black economic empowerment partner.
A damning report, written by advocate Geoff Budlender after an investigation in 2017, accused Trillian of corrupt practices involving multimillion-rand payments from Eskom and Transnet.
Bain has become the latest multinational to be embroiled in state capture, with its reputation damaged by work to overhaul the SA Revenue Service (Sars) operating model after being appointed by suspended commissioner Tom Moyane.
The process is alleged to have weakened a once world-class tax agency, resulting in revenue shortfalls that eventually contributed to SA raising VAT for the first time in 25 years, hitting the nation’s poorest the hardest. It has also emerged that Bain managing partner Vittorio Massone had twice met Zuma before the firm commenced its work at Sars.
Massone also told the Sars commission of inquiry, chaired by retired judge Robert Nugent, that he had been asked by Moyane for a presentation on how he would overhaul Sars a year before Moyane became the tax boss.
Business Leadership SA last week suspended Bain over what it said was its involvement in "yet another state-capture project".
Bain has confirmed that it was in discussions over a joint pitch with Trillian to Transnet, but says that it never engaged Trillian "in any form of partnership".
Budlender’s report looked into allegations of state capture by Trillian and the involvement of Wood, and whether he had prior knowledge of former finance minister Nhlanhla Nene’s firing in 2015 — an event that sparked a selloff in the rand and SA stocks, wiping billions of rands off the value of the nation’s banks.
In the letter from Wood to Pita, the Trillian CEO said the purpose for wanting to share the Transnet information with Bain was to provide the firm with a "view to the consultancy work performed" by Trillian so Bain could be equipped with all the required information relating to the general freight business.
"In essence, Trillian would seek approval to introduce Bain to the basic structure of the workings of how Transnet operates, the divisional structures, and to what extent Trillian has been working with TFR [Transnet Freight Rail] on the contract as mentioned above," Wood wrote.
The request was approved by Pita.
Bain said Trillian wanted to share with it the type of opportunities it was working on and understand its work quality.
"At one point we evaluated them but they did not meet our due diligence requirements so we walked away," Bain said in response to questions.
The firm also said that it was not aware of the role Trillian was playing in the state capture project.
Bain’s Massone is set to return to the Nugent inquiry on Tuesday, where he may respond to questions around his meetings with Zuma.
Questions were also raised about the manner in which Bain obtained its contract with Telkom in 2014, with Bloomberg reporting that process too was irregular.
However, Telkom earlier in September told Business Day that its contract with Bain was above board.
The Nugent inquiry on Tuesday will also see the Treasury’s Solly Tshitangano return to give evidence on procurement at Sars under Moyane.
It was Tshitangano’s evidence in the previous round of public hearings at the inquiry that alerted the commission to the irregular nature of the Sars contract with Bain, which was described as "littered with red flags".
Massone stepped aside from the day-to-day running of Bain’s operations in SA earlier in September, and Bain launched an internal probe into the work it had done at Sars and has put aside the R164m earned from the contract.
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