Nedbank ends mediation with Transnet, faces legal action over disputed swap transactions
Nedbank ended mediation with Transnet over disputed interest-rate swap transactions advised by Regiments Capital in 2015-2016. Regiments, linked to the Gupta family, allegedly exploited ties with former President Zuma for corrupt deals. Despite claims of potential corruption, Nedbank maintains its procedures were proper. Transnet plans to pursue legal action.
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By Adelaide Changole
Nedbank Group Ltd. has ended a mediation process with South Africa's port and freight rail operator Transnet SOC Ltd., to resolve a dispute over contested interest-rate swap transactions.
The lender did not advise the rail operator on the transactions in question, which took place in December 2015 and March 2016 based on the advice of Regiments Capital Pty Ltd., Nedbank said in a statement Tuesday.
Transnet appointed Regiments as an adviser, effectively making the transactions "commercially sound" and the bank's margin was reasonable for the risks assumed, Nedbank said.
Regiments was linked to the Gupta family, whose members are alleged to have leveraged their relationship with former President Jacob Zuma to flout procurement processes and win deals with state-owned companies.
"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," it said.
The transactions were found to have been potentially corrupt by a commission of inquiry into so-called state capture, which was the undue influence over government officials and entities during Zuma's tenure. He has denied wrong-doing.
The board and management of Nedbank have said they are satisfied that its internal governance procedures were followed in respect of the transactions and that there is no evidence of any dishonesty, corruption or collusion by its staff.
Nedbank entered the mediation talks to "avoid potentially drawn-out and costly litigation," and will "strongly defend itself in any litigation proceedings that may follow," it said.
In a response, Transnet said it did not agree with the contents of Nedbank's statement, and insisted that the bank had a case to answer to regarding the transactions. As such, the rail operator said it would take steps to have the matter heard in court.
"Legal proceedings will imminently be instituted by Transnet against Nedbank, which will set forth the basis for Transnet's case," the rail operator said in a statement Tuesday.
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