MEDIA STATEMENT
Thursday, 01 August 2024
For Immediate Release
Public Interest SA Statement on Transnet and SIU's Legal Action Against Nedbank
Public Interest SA unequivocally supports the legal proceedings instituted by the Special Investigating Unit (SIU) and Transnet against Nedbank, aiming to set aside the egregious interest rate swap transactions conducted at the peak of state capture in 2015 and 2016. These transactions, which involved a sinister agreement between Transnet and Nedbank, facilitated the swap of interest rates on existing loans for future interest rate payments based on financial derivatives, leading to Nedbank's excessive profit of over R2.7 billion. This egregious enrichment at the expense of public funds is unconscionable and warrants the full force of legal retribution.
The findings of the Zondo Commission, which underscored the necessity for further investigation into Nedbank's participation in dubious deals, are a stark reminder of the insidious nature of state capture. The amaBhungane report of 2021 further delineates the depth of Nedbank's collusion with Regiments Capital, a firm notorious for its connections to the Gupta family. This report unveiled that Nedbank paid Regiments over R95 million in commissions to steer public sector clients, such as ACSA and the City of Johannesburg, towards its financial products. These underhanded arrangements, including additional undisclosed millions from Transnet deals, significantly escalated costs for Regiments' clients without their informed consent, further entrenching the malfeasance within our public institutions.
The interest rate swap transactions scrutinized under the Judicial Commission of Inquiry into Allegations of State Capture, Corruption, and Fraud in the Public Sector form a critical component of a broader scheme to divert and misappropriate public funds from Transnet to Gupta-linked entities. The SIU's discovery of crucial evidence substantiating these claims underscores the necessity for Nedbank to be held accountable for its involvement and conduct in these transactions. Public Interest SA asserts that these interest rate swaps are void and unenforceable under the Public Finance Management Act, and contravene section 217 of the Constitution. They stand contrary to public policy and ethical governance.
Corruption is far from a victimless crime. The systemic erosion of good governance and ethical leadership at Transnet during the state capture years has inflicted material, adverse effects on South Africa's economy, contributing to the nation's greylisting by the Financial Action Task Force (FATF). This greylisting has far-reaching repercussions, undermining investor confidence and hindering economic growth, thereby exacerbating the socioeconomic challenges faced by our nation.
Furthermore, Public Interest SA asserts that criminal investigations must ensue against not only former senior Transnet executives but also Nedbank and officials complicit in these malfeasant transactions. It is imperative that all those who played a role in facilitating and enabling this grand scale corruption are brought to justice, and held accountable for their actions.
"We stand resolute in our condemnation of such acts of malfeasance. We commend the collaborative efforts of Transnet and the SIU in seeking justice and restoring integrity within our public institutions. We call upon all criminal justice agencies to bolster their resolve in pursuing accountability for those complicit in enabling state capture. Nedbank, in particular, must be held to account for its role in these nefarious transactions and the broader network of corruption that has blighted our nation," says Tebogo Khaas, Public Interest SA chairperson.
"As we strive to rebuild our nation and restore faith in our institutions, it is imperative that we confront and rectify the injustices of the past. Public Interest SA remains steadfast in its commitment to advocating for transparency, accountability, and ethical leadership across all sectors of our society. The pursuit of justice against those who have profited at the expense of the public good is not only necessary but fundamental to the restoration of our nation's integrity and prosperity," adds Khaas.
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ABOUT USÂ
Public Interest SA is dedicated to promoting justice, accountability, and transparency in South Africa. We advocate for policies and initiatives that protect and support good governance and whistleblowers, ensuring a fair and just society for all.