LETTERBOX FIRM PROBE
No sign of further investigation of Homix over multimillion-rand Transnet deals
Neotel is said to have paid tens of millions of rand in ‘commissions’ to the letterbox company Homix to clinch deals worth R2bn from Transnet
Investigations into the alleged letterbox firm that facilitated millions of rand in contracts at Transnet, the state-owned logistics company, are in the hands of the authorities, Neotel and Transnet said on Wednesday.
Neotel is said to have paid tens of millions of rand in "commissions" to the letterbox company Homix to clinch deals worth R2bn from Transnet. This comes as allegations of state capture continue to swirl and amid multiple investigations at various state-owned entities.
A notice of the forfeiture targeting Homix and finalised in terms of the country’s foreign exchange regulations was made by the Reserve Bank in the Government Gazette of December 30. Transnet did not respond to requests for comment on whether it had investigated the transactions. "Homix is not a Transnet supplier. Transnet has never engaged with Homix or conducted business with the company," the company has said previously.
The Hawks were not able to comment on Wednesday. But last week they could not immediately find a record of any investigation into Homix.
Reserve Bank deputy governor Kuben Naidoo said the R14.5m plus interest which was forfeited to the state was the capital standing to the credit of Homix in an account with Mercantile Bank.
Investigative reporters with amaBhungane reported that hundreds of millions of rand were allegedly secreted away in apparent kickbacks from companies doing business with Transnet.
The story so far starts in early 2014 when Homix made contact with Neotel, offering to land an equipment contract in return for 10% of the value. Despite internal misgivings, Neotel paid Homix R35m and landed the contract, worth more than R300m.
Transnet picked Neotel as preferred bidder in a tender for a wide suite of network services, saying it would get the contract if terms could be agreed by a December deadline.
Neotel’s auditors had reported the Homix payments to the Independent Regulatory Board for Auditors in April 2015 and it notified other authorities, including the Hawks, and initiated an internal investigation during which both its chief financial officer Stephen Whiley and CEO Sunil Joshi opted to take special leave. Both later chose to resign.
Neotel said on Tuesday it had since put in place internal processes and training to strengthen procurement processes, internal controls and governance. "Neotel is committed to the highest standards of corporate governance and is confident that at all times, it has acted in accordance with ethical guidelines and standards," the company said.
Ethics Management & Monitoring Services MD Cynthia Schoeman said on Wednesday there was an onus on boards to act on issues deemed a high threat or risk to a business.
In this, with Transnet’s multimillion-rand procurement contracts, any allegations of irregularities would qualify.
Failure to act also risked reputational damage, should the broader public make assumptions that the company had something to hide, she said
With Linda Ensor