UPDATE: Just hours after this investigation was published, Transnet's attorneys called to let us know that Phetolo Ramosebudi is now the former group treasurer of Transnet - he resigned after being served with a suspension notice earlier this week arising from Transnet's own investigation.
For at least six years, Phetolo Ramosebudi was the "inside man" for controversial financial services firm Regiments Capital.
Ramosebudi was group treasurer first at Airports Company South Africa (ACSA), then at South African Airways (SAA) and then at Transnet, where he controlled one of the largest and most sophisticated corporate treasuries in the country.
New evidence shows that during Ramosebudi's time at these state-owned entities, he was a Regiments rainmaker: Leaking confidential information, allowing the firm to dictate the terms of a tender, and rubber-stamping questionable fees running into hundreds of millions of rand.
Seemingly in exchange for this extraordinary leg-up, Regiments was asked to pay at least R6.3m to Ramosebudi's private companies and those of a relative - via 14 invoices delivered to Regiments director Eric Wood.
The invoices were for everything from "advisory" work to supplying liquor and the services of a personal trainer.
Yet amaBhungane has seen no evidence that these services were actually delivered, suggesting the invoices were a cover for undue payments to Ramosebudi.
The most intriguing, but least conclusive, piece of evidence is a quote of R1.3m for a Range Rover Sport.
It is attached to an email Ramosebudi sent to Wood in September 2015, though it appears the car was never bought.
We sent Ramosebudi five pages of detailed questions in August, detailing the evidence against him.
He responded, saying: "I have noted with a concern your allegations around my integrity and the integrity of procurement processes in the companies I worked for, particularly to ACSA, SAA and Transnet on Treasury related work, which is the cornerstone of my function in the treasury and financial markets space.
"Given that the information you're referring to is more than 7 years and don't have recollection of the details it is really unfair to expect me to respond candidly on these query and questions.
"However, I am confident that any procurement processes in those organisations you're making reference to have sufficient checks and balances to guarantee integrity. These include oversight at various governance levels." (Read Ramosebudi's full response here.)
Since August, Transnet chair Popo Molefe has suspended three Transnet executives for their alleged role in state capture, including chief executive officer Siyabonga Gama who was dismissed this week.
Hours after amaBhungane first published this investigation, Transnet’s attorneys confirmed that Ramosebudi resigned after being issued with a suspension notice, following Transnet’s own investigation.
The R229m headache
To understand why Ramosebudi was so useful to Regiments, we need to start some six years into his apparent capture, in December 2015, when Transnet was poised to enter into a series of interest rate swaps that would deliver R229m in fees to Regiments.
But there was a problem.
"I need to sort this one out," Ramosebudi told Regiments' Wood, forwarding him an internal Transnet email.
It was on December 2, 2015 and the source of Ramosebudi's headache was Danie Smit, one of his colleagues at Transnet treasury who had taken it upon himself to prepare a "humble opinion" questioning the wisdom of entering into the swaps.
Earlier, in November 2015, Transnet had secured a R12bn "club loan" to finance the largest purchase of locomotives in South Africa's history.
Ostensibly to hedge its risk, Transnet decided to enter into a series of complex financial transactions known as an interest rate swaps.
The deal would swap the "club loan's" volatile floating interest rate for a fixed one. Incidentally, it would also channel enormous fees to Regiments and, it is alleged, onward to the Guptas.
But now, at the 11th hour, Smit, a seasoned official, was seemingly not convinced the interest rate swaps were necessary.
Although we have not seen a copy of Smit's memo, the email trail shows that Transnet's newly-appointed chief financial officer, Garry Pita, was persuaded.
"It is well-written and I understand the logic. Phetolo, are you in agreement that we don't enter into the swaps?" Pita replied.
This, Ramosebudi told Wood, was what he needed to "sort out".
Just 20 minutes after his email alerted Wood to the problem, Ramosebudi swung into action.
"I am sorry that you received a conflicting message from Danie who didn't consult with me on this," he wrote in a reply to Pita, leaning heavily on his seniority to Smit.
"As the Head of Treasury I am concern [sic] with exchange rate and inflation expectations and it is prudent to manage risk appropriately. A proper submission is on the way for approval."
On December 4, Transnet entered into the first of a series of interest rate swaps, using a Transnet pension fund as the unfortunate counterparty.
The same day Regiments received R56.7m in fees and quickly transferred R42m into a Bank of Baroda account.
Who benefitted from those funds remains in dispute - while Regiments maintains the money was for Albatime, a company that acts as a fixer for Regiments, the Public Protector's State of Capture report identified one of the beneficiaries as Tegeta, the mining company co-owned by the Guptas, Salim Essa and Duduzane Zuma.
Would the head of treasury commit Transnet to an expensive deal it did not need just to channel fees to Transnet's politically-connected advisors?
Considering how complex forex risk can be, there is no easy answer.
However, this was not the first time Ramosebudi had reached down, opened a valve and allowed millions in questionable fees to flow to Regiments.
In April 2015, he presented Transnet with a memo recommending that Regiments receive a R189m "success fee" on a separate, Chinese loan, which a recent amaBhungane investigation showed was largely siphoned to the Guptas' Sahara Computers.
But to understand the symbiotic relationship between Ramosebudi and Regiments one needs to go back to 2009 when Ramosebudi was treasurer of ACSA - and Regiments seemingly began grooming him to serve its interests.
In 2009, ACSA was facing a triple threat: A global recession, R17bn of debt, and new regulations that precipitated a "cash crunch".
"These conditions made debt difficult to access and/or extremely expensive," spokesperson Hulisani Rasivhaga explained via email.
To head off a liquidity crisis, ACSA needed to raise R3.5bn immediately. Regiments was appointed as advisors and was promised a modest capital-raising fee, capped at R2.5m over five years.
But when ACSA's treasury department, headed by Ramosebudi, decided to enter into a series of interest rate swaps on these same loans, Regiments saw an opportunity to exploit its position as ACSA's trusted advisor.
In May 2009 and May 2010, Regiments entered into separate deals with Nedbank and Standard Bank, setting themselves up as intermediaries and asking the banks for an "introduction fee" for any deals it brought them.
If the banks won the business to execute the interest rate swaps, Regiments would get upward of R10m per transaction - a cost that would be rolled into the fee charged to ACSA.
"[P]art of the narrative," Nedbank's head of corporate and investment banking Brian Kennedy told us, was: "If you don't deal with Regiments you're not going to do any business with any of the state-owned entities."
The result? Between October 2009 and May 2010, Regiments extracted R46.3m in "introduction fees" from Nedbank and Standard Bank, invoices, spreadsheets and emails show.
While Standard Bank told us it believed ACSA was aware that Regiments was acting as a broker and earning a fee from the banks, Nedbank claimed that Regiments was at all times ACSA's trusted advisor and the fee was not an "introduction fee" but an advisory fee that the bank merely paid on ACSA's behalf.
The one thing the two banks do agree on is their claim that the fees they paid Regiments were above-board for the simple reason that ACSA was aware of the fees, and happy to carry the cost.
Yet from ACSA, Standard Bank and Nedbank's accounts it appears that Ramosebudi was the only person at ACSA who was told about these fees, and normally only over the phone.
Nedbank told us it had reason to believe that others at ACSA were informed about the fees, but was unable to present evidence of this and said it was still conducting its own investigation.
ACSA said it could find no record that Regiments or Ramosebudi disclosed these "introduction fees" to anyone else at ACSA.
"[ACSA] will need to commission a thorough audit to verify the accuracy of allegations… The documents we have reviewed thus far, i.e. swap agreements, do not disclose any fees that Regiments stood to earn from the swap transactions," Rasivhaga said.
If Ramosebudi was helping Regiments, we wondered, what did he get in return?
Had someone been looking over Wood's shoulder in July 2010 the email from email@example.com would not initially have provoked much suspicion.
"Dear Eric, Please receive a copy of the research, and will appreciate the review and comments as soon as possible for finalisation," Ramosebudi wrote.
Attached to the email was not a research report, but an invoice payable to Riskmaths Solutions for R456 000 for "Actuarial and Risk management consulting".
Company records show that Ramosebudi was the sole director of Riskmaths at the time.
Two more emails marked as "research reports" arrived in September and October 2010 from Ramosebudi. Once again there was no sign of any research attached to the email, only invoices for R798 000 and R460 099 respectively.
If the invoices were legitimate, we asked ourselves, why would Ramosebudi disguise them as "research reports"?
There were other invoices too.
A week after Ramosebudi okayed Regiments' R22.3m "introduction fee" on the final ACSA swap, seven invoices arrived in Wood's inbox from Ramosebudi's Riskmaths email account.
The first two were from Venus Liquor Store, the trading name of Azana Capital Markets, another Ramosebudi company.
Despite Venus' modest location in a discount mall in Midrand, the company billed Regiments more than R400 000 for alcohol, catering and venue hire for a "Regiments function".
The remaining five - totaling R2.8m - were from Riskmaths Consulting.
In October 2010, Ramosebudi sent Regiments another invoice from Azana Capital Markets, not for alcohol but for "19 days" of consulting work at R1 950 an hour, totaling R296 400.
ACSA confirmed that any deals its employees did with suppliers should have been disclosed in terms of the company's conflict of interest policies, but told us that although Ramosebudi disclosed he was a director of several companies, he did not disclose any payments from Regiments.
A year or so later, when Ramosebudi packed his bags for SAA, Regiments went with him.
By 2013, the cash-strapped national airline was desperate to free up working capital.
And Regiments was poised to profit from its relationship with Ramosebudi, who was now group treasurer and head of corporate finance at SAA.
In October 2013, Ramosebudi forwarded an internal SAA document entitled "Working Capital - Scope of Work" from his official "Flysaa" email address to Rams Capital, a new company he registered shortly before moving to SAA.
He then forwarded the document from his private Rams Capital email address to Wood at Regiments.
The document described what the airline hoped to achieve from a new "working capital optimisation" tender.
Regiments, which planned to bid for the tender alongside global consulting giant McKinsey, now knew exactly what SAA wanted to hear.
Ten days later, Ramosebudi repeated the exercise, forwarding the "evaluation criteria" for the tender to Wood with a request to "please review and comment".
Over the next three months more emails followed, each time routed via Phetolo@ramscap.co.za before arriving at Ericw@regiments.co.za. There were confidential presentations from rival bidders like KPMG and emails containing the secret bid prices from REL Consultants and Boston Consulting Group.
In February 2014, SAA awarded the Working Capital tender jointly to McKinsey and Regiments. It is not clear from the emails we have seen whether McKinsey knew of the inside information Ramosebudi was drip-feeding to Regiments.
What we can see is that the tender was perfectly suited to the "100% at-risk" model that McKinsey was touting in the market - the same model that would later, controversially, extract R1.5bn in fees from Eskom.
"McKinsey, and others, were invited to tender for a 'fees at risk' project to address severe funding shortfalls, which made it challenging for SAA to hire on a fixed-fee basis that did not link pay to impact," a McKinsey spokesperson said in a written statement.
Despite the airline's precarious financial position, the consultants asked to be paid 8% of any potential savings they identified, capped at R120m.
SAA, McKinsey and Regiments eventually settled on 7% capped at R80m. (Newly-discovered documents show that 20% of the total fee was earmarked for Essa, the Gupta partner.)
Several former SAA executives we spoke to said Ramosebudi was central to lobbying for the McKinsey and Regiments contract, despite vociferous objections from then-CFO Wolf Meyer.
Spreadsheets prepared by McKinsey show that the largest projects, where the consultants stood to earn the biggest fees, all fell directly under Ramosebudi.
When Ramosebudi moved to SAA, the payments from Regiments continued flowing.
In October 2013, two invoices arrived in Wood's inbox from Ramosebudi.
The first was from Ka Ditlou Health Services 202 - trading as Rams Pharmacy - for a wide variety of health products and services, including a dietician and personal trainer. Total: R357 606.
The second was from Rams Capital for "Actuarial and Risk management consulting … work for Transnet". Total: An identical R357 606.
This was not the first time Wood had received an invoice from Rams Pharmacy.
In April 2011, when Ramosebudi was still at ACSA, he had sent an invoice to Regiments for identical services, but that time for an amount of R212 964.
Company records show that the sole director of Rams Pharmacy is Psychology Ramosibudi, a relative of Ramosebudi's despite the different spelling of their surnames.
We asked what services Rams Pharmacy provided to Regiments but Psychology Ramosibudi told us that since the transactions "took place 5 years ago or more" it would be "unrealistic and unreasonable" to expect him to respond immediately. He added: "I guess [I] cannot at this stage candidly comment about this." (Read his full statement here.)
SAA spokesperson Tlali Tlali told us that employees "must declare any conflict of interest between the work they do while in the employ of the airline and the work they undertake privately in their personal capacity" and must "seek permission… whether or not they get remuneration from doing such private work".
Ramosebudi, he said, had disclosed that he was a director of one company, but not in the companies that we identified as issuing invoices to Regiments.
In the end the consultants could not extract their R80m payday from SAA. Although McKinsey submitted invoices totaling R28.9m, SAA's then newly appointed CEO, Nico Bezuidenhout, refused to pay. The consultants eventually settled for a more modest R12.5m.
But by that point Regiments had its eye on a bigger payday.
In January 2015, Transnet treasurer Mathane Makgatho resigned amid mounting pressure for her to sign off the Chinese loan that would eventually channel the R189m "success fee" to Regiments.
She reportedly told staff: "I arrived here with integrity, and I will leave with my integrity intact."
Two months later, Wood was posing for photos with then Transnet chief executive Anoj Singh on Beijing's popular Wangfujing avenue.
Smiling shyly next to them was Ramosebudi, Transnet's new group treasurer.
The big one: Transnet
The email of September 14, 2015 was amaBhungane's first clue that a corrupt relationship may exist between Ramosebudi and Regiments.
Attached to the email was a quote for a Range Rover Sport with all the bells and whistles: Electric deployable towbar (R23 700), mags (R32 000), panoramic sunroof (R30 200) and adaptive headlamps (R17 200).
Total cost: R1.3m - although if Ramosebudi traded in his one-year old Mercedes Benz ML250 BlueTech, the cost would come down to R784 000.
Ramosebudi, Regiments and Wood all refused to provide any explanation when the Range Rover email was raised with them.
However, a former Regiments employee told amaBhungane that Wood had offered to assist Ramosebudi with a discount organised through Regiments chair Litha Nyhonyha, who owns a stake in Landrover Waterford, the dealership where the Range Rover was on sale.
AmaBhungane has established that Ramosebudi did not buy this particular Range Rover but opted to buy a BMW X6 from a different dealer instead.
We have seen no other evidence that Regiments continued supplementing Ramosebudi's lifestyle after he moved to Transnet.
What we can see is that he used his private email account to send at least one document to Regiments containing Transnet's sensitive financial information. We also know that under his watch Regiments extracted hundreds of million from Transnet.
The 'political witch hunt'
At Transnet, both the board and its minister, Pravin Gordhan, have been accused by the Economic Freedom Fighters of conducting a "political witch hunt" aimed victimising and removing "African leadership and executives".
Ramosebudi refused to respond to the allegations against him. We sent Transnet detailed questions but were initially told that they could not be answered as they were "subject to ongoing investigations".
Transnet’s attorneys have since confirmed that Ramosebudi was issued with a suspension notice, following Transnet’s own investigation, but that he chose to resign instead.
Regiments' two remaining directors, Litha Nyhonyha and Niven Pillay, also refused to comment, while Eric Wood, who left Regiments in 2016 to start Trillian, told us that our four pages of detailed questions had not provided him with "any particularity or context… to respond to what appear to be serious allegations". (Read Wood's full response here.)
We offered to provide Wood with the exact dates, company names and amounts from the invoices exchanged between him and Ramosebudi.
More than a month later we are still waiting for him to take us up on our offer.
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