Transnet and the Special Investigating Unit (SIU) have jointly instituted proceedings against Nedbank out of the Johannesburg High Court to set aside interest rate swap transactions which took place in 2015 and 2016 between Transnet and Nedbank.
A report brought before the Zondo commission states that Nedbank performed a series of interest rate swaps that effectively restructured the debt that Transnet used to fund its freight train operations, while the bank received fees for doing so. The interest rate swaps undermined the open bidding process leaving Gupta-affiliated Regiments Capital as the largest beneficiary in the procurement process. These interest rate swaps are alleged to form part of the wider scheme of state capture that sought to misappropriate and divert public funds from state-owned entities like 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. There is sufficient basis for the sought relief and Nedbank must account for its involvement and conduct in the swap transactions. Transnet and the SIU collaborated closely in preparation for the court proceedings, including SIU’s uncovering of evidence critical to the case.
Nedbank’s response
Nedbank pulled out of mediation earlier in 2024 after what was described as “mediation turned ugly”, they put out a public statement stating: “Nedbank was not, and could not have been, aware of the apparent collusive relationships that the Regiments Group had forged with senior officials at Transnet or the links that the Regiments Group apparently had with the Guptas. Nedbank is not aware of, nor has it been provided with, any evidence of collusion or corruption on the part of Nedbank or its staff, despite numerous requests for disclosure of such evidence, should it exist.”
