As the National Prosecuting Authority (NPA) prepares to charge key Gupta family ally Eric Wood and others over the R1.6bn Transnet looting, a Transnet pension fund lawsuit has exposed how hundreds of millions of rand in pensioners’ money allegedly ended up in the accounts of Gupta companies.
Both these criminal and civil cases have provided powerful evidence and insights into the anatomy of parastatal looting in the era of state capture during the presidency of Jacob Zuma.
The Gupta family, which was allegedly embroiled in these activities, was close to Zuma.
The Transnet Second Defined Benefit Fund has stated in court papers that just more than R210m of the money used by the
Guptas to pay a deposit on the Optimum coal mine can be traced back to money “misappropriated” from its members.
The fund, which has 51,000 members, describes in the papers how Regiments Fund Managers and Regiments Securities had unlawfully caused the transfer of more than R228m of pensioners’ money into its own accounts, ostensibly because it was owed this money for advisory services to the rail and ports company.
Those services were allegedly provided primarily in relation to its purchase of 1,064 locomotives, which ballooned from R38.6bn to R54.6bn in what the state said was an “unjustified escalation”.
Part of that money, according to the fund, ended up in the Bank of Baroda account used by the
Guptas to pay the Optimum coal mine deposit.
In court papers filed on March 28 2020, the fund also accuses Regiments Capital — a company described by the NPA as a pivotal tool in the Guptas’ extraction of money from stateowned entities — of fraudulently funnelling R122m in allegedly unlawful fees it received from Transnet, through a front company, to Gupta-owned Sahara Computers.
This money, according to the fund, was paid “pursuant to a fraudulent invoice in respect of IT services”.
The legal action launched by the fund against Wood and his Regiments and Trillian companies comes after his now estranged fellow Regiments directors in 2019 agreed to pay the fund a settlement of
R630m in total. Wood was a director at Regiments and the founder of Trillian.
Regiments directors Litha Nyhonyha and Niven Pillay insist that the settlement was in no way an admission of liability. But that case paved the way for the NPA to prosecute them and Wood, by exposing key evidence of how Transnet and its pension fund were looted.
An outcome of this court case was that the NPA was able to obtain Regiments’ computer servers after a court application without any apprehension that they had been tampered with.
Now the fund is going after Wood in a case that details a massive looting conspiracy that implicates a number of senior Eskom and Transnet officials, including Matshela Koko, in diverting “public funds from state-owned enterprises, organs of state and pension funds for employees of state-owned enterprises and organs of state ... to entities associated with [Gupta associate Salim] Essa and/or the Gupta family”.
Koko told Business Day that “the conspiracy, as far as it is applicable to me, is far-fetched, laughable and scandalous”.
This conspiracy, according to the fund, involved Essa and “other persons associated with the Gupta family” using the Gupta network’s influence over organs of state, parastatals and their pension funds to “improperly procure” contracts for Regiments or Trillian companies. Essa founded Trillian with Wood. The companies would
advise these organs of state, state-owned companies or public sector pension funds with the aim of “furthering the interests of Essa and/or the Gupta family whether or not those interests conflicted with the interests of the state-owned enterprises, organs of state or public sector pension funds who were paying for such advice”.
In return, Regiments and Trillian “would divert between 50% and 96% of the fees paid to them by the state-owned enterprises, organs of state or public sector pension funds who were paying for such advice to Essa and/or the Gupta family through a money-laundering scheme”.
Wood has yet to file a response to the fund’s case against him, in which it seeks an order that will force him to pay it back more than R263m.
THE FUND IS GOING AFTER WOOD IN A CASE THAT DETAILS A CONSPIRACY THAT IMPLICATES SENIOR ESKOM AND TRANSNET OFFICIALS