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Financial giant Nedbank is not out of the state capture woods yet, as looming legal action from state-owned freight and transport company Transnet is set to probe its role in alleged dubious transactions during the state capture period.

The Daily Maverick reports that Nedbank may face the music for its part in the interest rate swaps that were carried out during Transnet’s multi-billion rand locomotives procurement project, explored extensively in evidence before the state capture commission.

The report continues: “In these interest rate swap transactions, Nedbank was essentially involved in restructuring the interest on the debt that Transnet used to fund its freight rail and port operations, while the bank would receive fees for doing so.

“Nedbank already faces a similar complaint from state-owned airport operator, the Airports Company South Africa, which has referred the bank to the Special Investigating Unit over its role in the interest rate swap deals.”

Transnet’s executive manager for governance, Peter Volmink, testified in May 2019 that the capture of Transnet happened through a process that was designed to override controls such as deviating from open bidding processes. Nedbank’s role in the swapping deals is included in the commission’s report in relation to the relationship it had with Gupta-associated Regiments Capital, the company that emerged as the largest beneficiary of the locomotives procurement process.

Nedbank and Transnet have been in mediation over the amount that the bank should pay back to Transnet for its role. Transnet believes that it was prejudiced by Nedbank when it restructured the exchange rates in transactions secured with one of the successful bidders in the locomotives deal, China South Rail, as it was referred to at the time. But the bank has since defended its position on the back of the negotiations turning ugly, saying that Transnet should point the blame at its own governance systems.

“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,” the bank said in a statement on Tuesday, 28 May.

Kodwa’s EOH headache

In other state capture-related news, Sports, Arts and Culture Minister Zizi Kodwa will have to answer to allegations that he maintained a corrupt relationship with a former executive of IT giant EOH during his term as ANC spokesperson, before he took office as a member of President Cyril Ramaphosa’s Cabinet.

Kodwa appeared on Wednesday in the Palm Ridge Magistrate’s Curt, with his co-accused Jehan Mackay, a former EOH executive alleged by the company to have provided favours to Kodwa and other ANC leaders over time.

The Zondo commission recommended that Kodwa face further investigation after evidence brought forward by EOH alleged that he benefited from financial and other favours from Mackay in return for his influence over public tenders for which the company was bidding.

For his part in the transactional relationship, Kodwa allegedly received cash, a luxury vehicle, and expensive holidays between 2014 and 2015. Kodwa responded to the allegations in a statement to the commission by saying the bulk of the favours, a R1-million cash payment referenced “NG KODWA (ANC DONA-JM)” by Mackay, was a loan that he understood he had to repay.

He was not a public official at the time, serving only in the party, but the final report of the commission, chaired by Chief Justice Raymond Zondo, found that: “On his own version, Mr Kodwa has never been in a position to repay Mackay the amounts of the loans … and has not repaid any of these amounts. However, he insists they were not payments made as a quid pro quo for any assistance on his part. In particular, he denies that the payments and the luxury accommodation were in any way related to the procurement of government contracts by EOH or related companies.”