DAYS OF ZONDO: R1.4bn and counting: The extra cost of Transnet’s questionable interest rate swap deals By Jessica Bezuidenhout JessBezJourn
A deal sealed on the eve of Nenegate in 2015 has saddled Transnet with an additional R1.4-billion in loan costs — roughly half of which comes courtesy of two Gupta-linked financial advisory firms that are central to the State Capture scandal.
The swaps followed a pool of loans sourced by Transnet from various lenders to help fund the acquisition of 1,064 locomotives, a deal also marred by kickback allegations involving the Guptas. Transnet had signed the loan deals at a floating interest rate with a variety of lenders, including the China Development Bank, Absa, Nedbank, Futuregrowth and Old Mutual.
Based on the magnitude of the transaction, the deal required a lot more diligence and the decision to enter into loan agreements on fixed or floating rates should have been properly considered at inception, not after the loan deals were signed.These are realised losses of R1.4-billion as at February 2019 and the gap between the floating and fixed interest rate has not closed,” Mahomedy said.
One had to draw the inference that it was done to benefit Regiments, considering the significant amount of money that flowed to the company, he said. It described the “fees” raked in by Regiments and Trillian in the deal as money laundering emanating from a criminal conspiracy.
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