Former Transnet CFO Anoj Singh concluded his oral evidence to the Zondo commission in now familiar form by denying any knowledge of how entities linked to the Gupta family obtained valuable inside information and kickbacks running into billions.
Singh could offer no explanation as to why Transnet contractor Neotel paid Dubai-based Homix, one of the Gupta’s alleged prime money-laundering ventures, R41-million in an ostensible bid to unblock negotiations between the state-owned freight rail utility and the telecommunications company.
Singh said he never engaged with Homix, which was owned by Salim Essa, nor was he aware of its involvement as a purported intermediary as the relationship with Neotel soured.
Instead, he said he had a firm meeting with Neotel director Sunil Joshi, during which he put his foot down on service-provision issues as a renewal of the contract was being negotiated, adding that this appeared to resolve the impasse, because shortly afterwards a master service agreement (MSA) was concluded.
Under questioning from evidence leader Anton Myburgh, Singh firmly denied involving Essa or Homix, who invoiced Neotel R41-million for services rendered in relation to the deal.
“What we do know is that Homix was Mr Essa’s company. Money flows have determined that this money was paid, Homix we know was one of the first-line Gutpa money-laundering entities,” Myburgh said.
“So another transaction you were involved in, another one of these BDSAs [business-development service agreements] where there was a large kickback paid, produced a signed MSA quite quickly. What do you say?”
Singh replied that he had no idea why Homix was paid and denied that he was aware of its involvement.
He stressed that Transnet was at a disadvantage in negotiations and said by this stage Transnet was paying a steep premium of about R60-million a month for Neotel’s services, in the absence of a long-term contract which reduced the price to about R45-million, and was, at any rate, always going to be on the backfoot because Neotel owned the infrastructure at issue in the service.
“Neotel basically held all the cards in these negotiations,” he said by way of explaining the renewal.
Earlier on Thursday, Singh told the commission he had no idea how Regiments Capital came into possession of the company memos he sent to his then boss, Brian Molefe, while preparing tenders for confined contracts.
In what was Singh’s last day on the witness stand at the state-capture inquiry, evidence Myburgh confronted him with an email exchange between Regiments’ co-owner Niven Pillay and Janine Kamaar, the transformation manager at McKinsey.
The management consultancy firm worked alongside Regiments, with its links to the now-fugitive Gupta family, on nine Transnet contracts.
Myburgh read from an email in which Kamaar noted that the two companies did not appear to be arriving at the same contract value, because of differences in their models for the costing of the skills component.
To this, Pillay replied that Regiments had based its supply-development calculations directly on a memorandum Singh sent to Molefe.
“The numbers that I am using is [sic] based on the Anoj memos to Brian, regarding these projects. Does not include expenses,” Myburgh quoted.
He then asked Singh if he would agree that it was highly irregular for Pillay to have had sight of the memoranda.
“Regiments, in the form of Mr Pillay, had the memos between yourself and Brian, assuming that to be Brian Molefe, in relation to these projects.
“Would you agree that it would be at this point in time where they are looking to complete their RFP [request for proposals] and looking to put in a tender, albeit on a confined basis, to have sight of those memos?”
Singh said he would, and Myburgh proceeded to ask how the memoranda were leaked.
“I have no idea, sir,” the reply came.
A forensic investigation in 2018 found that Transnet paid Regiments, Trillian and McKinsey R3.26-billion between 2005 and 2017.
It further found that McKinsey was given preferential treatment to be appointed as consultants on negotiations to increase the capacity of Transnet’s coal-supply-line operations to two million tonnes a week.
Earlier testimony before the commission confirmed that Transnet and Regiments began working on the deal before the master service agreement was signed.
McKinsey has agreed to pay back R870-million it earned from Transnet in consultancy fees.
Its advisory role extended to the controversial acquisition of 1 064 locomotives by the state-owned freight and logistics company in a deal in which the costs rose from R38-billion to R54.5-billion as companies pledged to pay the Gupta family R9-billion in kickbacks.
Asked by Myburgh on Thursday how such an increase could be justified, Singh said calculations of this order were not as simplistic as merely factoring in increases in consumer price index, but that other factors, such as risk premiums, had to be considered.
In testimony to the commission late last month, Singh said he was not familiar with the acceptable profit margins on locomotives, hence he could not detect that the deal had been so heavily inflated that it allowed kickbacks of 21%.
He submitted it was precisely because of a lack of expertise that Transnet relied on input from advisers, leaving Myburgh to ask: “Do you see the irony?”
Singh and Molefe have vehemently denied testimony by former staff that they received piles of cash from the Gupta family.
Both he and Molefe were seconded to Eskom in 2015, where they have been accused of enabling the Guptas to capture the power utility.