The Zondo Commission of Inquiry into State Capture has heard how Gupta-linked consulting firm Regiment Capital unduly benefited from multiple transactions with Transnet.
Multipurpose Business Solution’s Jonathan Bloom told the commission there was a trend of swapping interest rates, from floating to fixed, on Transnet loan agreements. He said these swaps resulted in significant losses and higher debt servicing costs.
The Inquiry also heard about more revelations relating to fruitless expenditure at Transnet. In 2014, Transnet entered into an interest rate swap with Nedbank in which Regimens acted as an executing agent. This was after the freight company had received a R12 billion loan from a consortium of local banks called the ZAR Bank Loan.
Bloom told the commission that Regiment’s services were not necessary as Transnet had the capacity to facilitate an interest rate swap internally.
According to Bloom, Regiment fraudulently received R7.5 million from Transnet, adding that the payment to the Gupta-linked consultancy was “nothing but fraud and unjustified.” This as the freight company had appointed JP Morgan and not Regiment.
Bloom also told the commission that Transnet incurred significant losses as a result of the interest rate swap. He said the swap resulted in the freight company incurring excessive fees. According to Bloom, Transnet’s overall debt costs increased from 9.4% to 10.4%.
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