Trillian Capital partners was paid R93m by Transnet for being a lead arranger of a R12bn club loan. However, the firm had no role to play in securing the deal, the state capture commission of inquiry heard.
The commission, chaired by Deputy Chief Justice Raymond Zondo, on Friday heard evidence from Jonathan Bloom of MNS Attorneys. In 2018 the firm was asked to probe allegations of fraud and irregularities by Transnet's former board. The firm produced six investigative reports. Bloom provided evidence pertaining to one of the reports which he helped compile regarding the financing of Transnet's 1064 locomotive project.
As far back as 2012, Transnet had tendered for manufacturers of 1 064 locomotives, needed to replace the ageing fleet and to bolster the fleet capacity to keep up with market demand, the inquiry previously heard.
The project was to be financed with $1.5bn from the China Development Bank and R12bn was funded through a club loan from banks and financial institutions. The club loan was agreed to on November 23, 2015. Lenders of the club loan included the Bank of China, ABSA and Nedbank – each provided R3bn, and Old Mutual Finance and Futuregrowth each provided R1.5bn.
But in his testimony, Bloom said there was a questionable sequence of events leading up to this point.
A business associate of the Guptas, Salim Essa, in September 2015 became a controlling shareholder of Trillian. In October, Transnet's Board Acquisitions and Disposal Council approved a memorandum to replace JP Morgan as the lead arranger of the club loan.
Another Gupta-linked firm, Regiments, was the supplier development partner of JP Morgan.
Then, on November 18, 2015, just five days before the club loan was finalised, Transnet entered into an agreement that Trillian would be the lead arranger of the loan. Later that month, Trillian invoiced Transnet R93m for services it purportedly rendered as lead arranger of the club loan, Bloom said.
Charges for work previously done
However, Bloom told the commission that it was unlikely Trillian had done any work on the loan.
"The transaction advisory work charged for had already been performed by Regiments," Bloom said. "The appointment of Trillian was irregular. Trillian was not the party that did the work, given the time periods involved," Bloom added.
"They were invoicing work they did not do and already had been done by Regiments," he reiterated.
"The R93m invoice submitted to Transnet by Trillian for advisory services for the transaction was fraudulent."
He also told the commission that Transnet did not require the services of Trillian, as Transnet's treasury had the expertise to facilitate such a loan.
The inquiry will resume on Monday.