Transnet, SIU take Nedbank to court over state capture deals

Transnet and the SIU issued a joint statement saying both parties has approached the Johannesburg High Court to set aside interest rate swap transactions against Nedbank. The transactions took place between 2015 and 2016 and saw Nedbank profit more than R2.7 billion. Both parties said it would look to recover the amounts that were unduly paid by Transnet to Nedbank under the transactions.

“The interest rate swap transactions were featured under the report of the Judicial Commission of Inquiry into Allegations of State Capture, Corruption and Fraud in the Public Sector,” Transnet and the SIU said in their statement.

It said the transactions were featured in the report of the Judicial Commission of Inquiry into Allegations of State Capture, Corruption and Fraud in the Public Sector and formed part of a greater scheme to misappropriate and divert public funds from Transnet to Gupta-linked entities.

“Transnet and the SIU are of the view that the interest rate swaps are void and unenforceable under the Public Finance Management Act, alternatively contravene section 217 of the Constitution and are contrary to public policy,” they said.

In response, Nedbank said it would take into account the internal and independent external reviews the Nedbank Board and management are satisfied that Nedbank’s internal governance procedures were followed in respect to the swaps, IOL reported.

Nedbank said there was no evidence of any staff dishonesty, corruption or collusion and the bank disputed that they profited in excess of R2.7 billion.

According to Nedbank, the swaps commercially sound and the return on equity earned by the bank was fair, reasonable and appropriate at 15.5% over the life of the transactions.

The bank said that they will strongly defend the litigation against it and will pursue its counterclaims against Transnet and others.