We didn't get any kickback in Transnet deal, insists firm


We didn't get any kickback in Transnet deal, insists firm

Regiments Capital wants to tell its side of the story after locomotives forensic report fingers it


Regiments Capital is riled up over a forensic report into the multi-billion-rand procurement of 1,064 locomotives by Transnet, claiming it was not given an appropriate opportunity to respond to allegations against the company.
Last week, Regiments chairperson Litha Nyhonyha wrote to the newly appointed Transnet chair, Popo Molefe, to ask for an opportunity to see the report and prepare a submission for the board’s consideration.
Werksmans attorneys, whose report naming Regiments was leaked to the media, referred queries to Molefe, who said on Wednesday he had been seized with his board duties since his appointment as chairman last week, and had not yet had sight of the letter.
The massive R54-billion procurement by Transnet has come under considerable scrutiny after allegations the Gupta family had raked in massive “kickbacks” – as much as R5-billion – after the lion’s share of the tender was awarded to China South Rail, one of four suppliers.
The other suppliers are Bombardier and General Electric.Last week it emerged that another Chinese supplier, China North Rail Corporation (CNR), may also have paid “commissions” to companies linked to the Gupta family and their associates. This is linked to Transnet relocating CNR and Bombardier’s manufacturing hub to Durban.
The cost of relocation fell to Transnet for both companies, amaBhungane reported last week – and CNR was paid R647-million after the payment was approved by Transnet acting chief executive Siyabonga Gama.
A dormant shelf company, Business Expansion Structured Products, was hired by CNR to negotiate with Transnet the “best possible price” for the relocation. 
The deal between BEX and CNR resulted in BEX being paid every cent above R280-million Transnet paid to CNR – earning them R647-million according to amaBhungane.
But the firm may have been a front for Gupta lieutenant Salim Essa, whose letterbox company Tequesta received roughly R5-billion from China South Rail, part of its successful bid for the lion’s share of the tender, in what has been described as a kickback by trade union Saftu and is the subject of a parliamentary probe.According to the amaBhungane report, Taufique Hasware (28) is BEX’s sole director. His name has come up before as a director of Homix and Forsure Consultants – companies that have also been implicated in alleged kickback schemes for the Gupta family.
Nyhonyha’s letter, which Times Select has seen, details that Regiments director Niven Pillay received a letter from Werksmans on October 17 last year, requesting a meeting with Pillay on October 30.
According to the letter, however, Pillay was not able to attend the meeting and an attorney for the firm on November 29 again wrote to Werksmans suggesting an alternative date – but, according to Nyhonhya they were informed by Werksmans that the suggested date, December 11, was not acceptable.
“Werksman’s report – which has been leaked to the media and in respect of which Regiments is now receiving enquiries – suggests that Werksmans was unable to meet Mr Pillay. This is patently false,” Nhyonyha’s letter to Molefe reads.
“We gather from the questions raised by the media that the report contains additional adverse findings and allegations in relation to Regiments and we would very much like to read the report, make submissions to Transnet thereon and, where necessary, set the record straight.”
Nhyonyha suggests that once their submissions have been made, he considers it likely and within the public interest and that Werksmans may well consider updating its report.On Monday Regiments issued a statement seeking to clarify its role in the procurement process, confirming that it rendered advisory services to Transnet – as it was appointed the supplier development partner for global advisory, McKinsey and Co.
“Our involvement commenced with a meeting on January 30 2014,” Nhyonhya’s media statement reads. “By then the tender had already been awarded to the four companies.”
Nhyonhya states that Regiments had no involvement in the awarding of the tenders, but was asked to provide financial modelling relating to escalation costs, foreign exchange costs and hedging and total cost of ownership.
“Regiment’s role was to advise Transnet to allow it to conduct informed negotiations with the successful bidders with a view of negotiating their pricing downwards.”
Regiments, Nhyonhya said, had no meetings with the bidders and were not involved in the negotiations – but saved Transnet an estimated R1-billion on the deal.It was paid R115.9-million for the four months it was engaged to provide services to Transnet, Nyhonhya said. This also included a “performance fee”.
“We wish to confirm that our company received no other payment or benefit from Transnet or any other person or entity relating to the project. We have resolved to provide full cooperation with any investigation – we have nothing to hide.”

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