R1.6bn freezing order sought by NPA for Transnet ‘corruption’

A “lucrative meeting” that netted R274-million for two people linked to the controversial Gupta family is central to the state’s case in the seizure of R1.6-billion in assets over the “corrupt” awarding of contracts at state-owned logistics company Transnet.

The Investigating Directorate of the National Prosecuting Authority (NPA) is appealing an October 2020 high court decision, which rescinded a provisional order to freeze the assets of Eric Wood, Magandheran Pillay and Litha Nyhonyha, worth a combined R1.6-billion, for the “corrupt obtaining of contracts” from Transnet by Regiments Capital.

Pillay and Nyhonyha are directors of the financial advisory firm, while Wood, who was also a director, resigned in October 2016. 

Regiments was the transaction adviser to Transnet for the latter’s R54-billion procurement tender for 1 064 locomotives in 2014, which the state alleges was inflated by about R16-billion. 

The NPA, which indicated in its court papers that it would prosecute the three directors on corruption, money laundering and fraud charges, claimed in the Johannesburg high court on Monday that Regiments used its alleged clout with Transnet to secure lucrative contracts on behalf of the Gupta family and their associates. 

“They directly or indirectly agreed to give, and gave, gratification to or for the benefit of Mr Salim Essa, Mr Kubentheran Moodley, the Guptas and those associated to them to influence Transnet to award them the contracts in question, in a manner that amounted to the illegal, dishonest or unauthorised exercise of their powers, duties or functions,” read the NPA’s papers. 

The state alleges that Essa and Moodley were part of a 2012 meeting with Regiments, where two Gupta associates, as “business development partners”, were to receive a 35% cut from transactions that Regiments advised Transnet and other state entities on. 

Of the more than R429-million that Regiments received from the state companies, the company doled out R274-million to its “business development partners”, and only retained R185-million for itself, the NPA said.

Advocate Geoff Budlender SC, arguing on behalf of the NPA, said “it was not in dispute” that the 2012 meeting occurred, and Essa and Moodley were paid for the attendance and for introductions that happened at the meeting. 

“That’s the most fantastically lucrative meeting anyone has ever attended. A meeting for an hour or two, no doubt,” Budlender quipped.

The matter will continue through the week, as announced by Judge Raylene Keightley, with advocate Vincent Maleka SC expected to argue on behalf of Regiments on Tuesday.

Maleka indicated before Monday’s adjournment that the October 2020 high court decision to set aside the freezing of assets should be upheld, adding that he would supply the court with case law as to why he would argue that case.

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Khaya Koko
Khaya Koko is a journalist with a penchant for reading through legal documents braving the ravages of cold court benches to expose the crooked. He writes about social justice and human-interest stories. Most importantly, he is a card-carrying member of the Mighty Orlando Pirates.

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