The prosecuting authority’s Independent Directorate (ID) received “significant assistance” from the Organisation Undoing Tax Abuse (Outa) in building its case against former Transnet executives and Gupta associates.
“Significant assistance came from Outa,” ID spokesperson Sindisiwe Seboka said.
Asked for details of the charges against the accused, she said they “cannot share the charge sheet yet as we still plan to add further accused”.
While the ID of the National Prosecuting Authority (NPA) is mum on who will be charged next, the affidavit from Outa’s state capture expert Rudi Heyneke upon which the ID relied names 17 people — including the six suspects who have already appeared in court — who should face the long arm of the law.
Siyabonga Gama, former group executive at Transnet, and four co-accused appeared in the specialised commercial crimes court sitting in the Palm Ridge magistrate’s court on Friday, after arrests that morning.
“The arrests were made on alleged corrupt dealings and kickbacks being paid after Transnet secured a $2.5bn loan facility from the China Development Bank (CDB),” said Heyneke.
The ID believes it has a case against Gama, former group CFO Garry Pita, former group treasurer Phetolo Ramosebudi, former Regiments Capital shareholder Eric Wood and current director of Trillian Asset Management (Novum Asset Management) Daniel Roy.
They are accused of fraud, corruption, money laundering and contravening the Public Finance Management Act. A sixth suspect, Kuben Moodley, was arrested shortly before boarding a flight from Johannesburg to Dubai in September. He spent a night in custody, appeared in court and was released on bail on September 29.
‘Went nowhere’
An affidavit Heyneke filed in August 2020 hints at what may be in store for the six accused and others still to be added to the case. Heyneke told Business Day members of the ID approached the non-profit in 2019.
“Before that we laid multiple criminal complaints that just went nowhere. Then we thought we’ll rather do in terms of Section 27 of the [National Prosecuting Authority] Act and make referrals of possible criminal actions,” he said.
He referred 17 people over alleged criminal activities linked to the loan Transnet entered into with CDB to finance 1,064 locomotives for its freight rail fleet. Heyneke insisted they be investigated over “highly irregular transactions” tied to the deal.
Among those he named are Atul Gupta in his capacity as a Sahara Computers director, Atul Gupta’s wife, Chetali Gupta, in her capacity as a Sahara Computers director, former Transnet group executive Brian Molefe, former Transnet group CFO Anoj Singh, former Regiments directors Litha Nyhonyha and Niven Pillay, and Salim Essa in his capacity as a Trillian director.
Outa claims to have shown money laundering occurred after Transnet and CDB entered into a loan agreement. Heyneke gave evidence of the loan’s planning and negotiations, its closure and the commissions involved. The non-profit also traced financial flows after Regiments received a so-called success fee for its claimed work facilitating the loan.
Outa drew on information from the #GuptaLeaks, databases given to the non-profit, whistle-blower reports, Transnet evidence submitted to the state capture inquiry and Companies and Intellectual Property Commission records.
Mystery syndicate
According to Heyneke the “unusually expensive Transnet loan” included $1bn financed through a so-called club loan in SA. Lead arranger JPMorgan was replaced by Trillian, which he claims received an extra R93m from Transnet.
Outa has also handed the ID evidence of a $17.7m transfer paid to a mystery syndicate. This was based on a tip-off from a whistle-blower who flagged a suspect “arrangement fee” of $17.7m from the $1.5bn committed loan from CDB.
Outa is pressing the NPA to identify members of the mystery syndicate and Heyneke says the $17.7m would have been worth about R219m when the deal was signed.
His affidavit also includes mention of former president Jacob Zuma. Initial talks in 2014 about a CDB loan stalled over affordability. That changed after Zuma, state ministers and businesspeople visited China in December 2014. Zuma, then-finance minister Nhlanhla Nene and Transnet’s then-group executive Brian Molefe, met CDB’s chair.
Four months later Singh wrote to Guan Lian of CDB SA Working Group recalling Zuma’s meeting and pressing for negotiations to resume. On April 16 2015 CDB sent Transnet a letter with terms for the $2.5bn loan. Molefe signed it the same day.
On June 4 2015 financing was signed off with a $1.5bn committed facility and $1bn standby facility. The loan was set over a 15-year period with interest determined on the Johannesburg Interbank Average Rate for three months plus 257 basis points. Per Outa, these excessive fees “were more than three times higher than the upfront fees of other funding for the locomotive deals.”
Personal accounts
Regiments Capital received a so-called success fee of R189m because, says Heyneke, newly appointed group treasurer Ramosebudi suggested as much to the acquisitions and disposals committee (ADC). The ADC approved the recommendation, and Singh signed it off.
Outa tracked what became of the R189m (VAT included) Transnet paid Regiments, and reported R2m went to the personal accounts of three Regiments directors: Wood, Nyhonyha and Pillay. Per Outa, Regiments paid R141m (or 75% of the supposed success fee) into the Bank of Baroda account for Moodley’s business Albatime.
From here, Outa found monies were paid to Sahara Computers, Essa and two newly registered shell companies, Hastauf and Forsure Consultants. Millions paid to the shell companies flowed to several other entities, including a hip-hop non-profit and a company with a director who provides financial services to the uber-rich through a separate business based in Switzerland.
Outa’s analysis shows how various individuals “conspired” to obtain payments by “facilitating” the CDB loan and how third parties, with no mandate or business with Transnet, allegedly received funds to which they were not entitled through a sophisticated money-laundering process.
Now, the ID has two new “seminal cases” before court, one of which is the Transnet case, next in court in about six weeks. “More such matters will be enrolled within the next few months. Not all nine seminal matters will be derived from the ID, but the greater NPA and law enforcement,” Seboka said.
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