16 May 2019

South Africa: Brian Molefe and Anoj Singh Were Warned Against Tainted Transnet Funding Deal

analysis

Despite having capable in-house expertise, Transnet bosses opted to swing the multi-billion-rand cash-raising deal for its 1,064 locomotives to the Gupta-linked financial advisory firms -- at a huge cost.

"Don't do this deal."

A stern and detailed warning from then Transnet treasurer Mathane Makgatho to her bosses -- Brian Molefe and Anoj Singh -- about the cost implications of a funding plan for the 1,064-locomotive deal would go unheeded, leading to her departure from the parastatal and saddling Transnet with yet another dirty deal.

Transnet had embarked on one of the country's biggest deals since 1994 with the acquisition of 1,064 new locomotives.

Tainted from the start, the R54-billion deal was eventually funded largely through a R12-billion club loan from local lenders and another $1.5-billion from the China Development Bank.

On Wednesday afternoon, the state-owned freight and logistics company's acting CEO, Mohammed Mahomedy, revealed how internal warnings around the funding options were disregarded as those in authority opted for the least cost-effective option, thereby swinging hundreds of millions of rands into the coffers of two Gupta-linked companies, Regiments Capital and its offshoot, Trillian Capital Partners.

The two companies would be paid close to a quarter of a billion rand for...

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