Transnet board had nothing to do with appointment of Regiments Capital, Pravin Gordhan says
The ‘dubious and problematic role of Regiments, Trillian and other entities in the state capture process’ will be probed by the Zondo commission, the minister says
The board of state-owned transport company Transnet was not involved in appointing Regiments Capital as the investment manager to the Transnet Second Defined Benefit Fund (TSDBF), Public Enterprises Minister Pravin Gordhan clarified on Thursday.
Regiments Capital, which shut down in February, became embroiled in allegations of state capture through its association with Gupta-linked Trillian Capital Partners. Allegations of substantial looting of Transnet by Gupta-linked companies have been made, which the Zondo commission of inquiry into state capture will investigate.
In reply to a parliamentary question by FF Plus MP Anton Alberts, Gordhan said Regiments had paid R228m to Trillian ostensibly for "transaction fees". However, the TSDBF found that no such fees were payable separately from the fee and cost structure agreed to in the original investment management mandate deal with Regiments, and were therefore not allowed.
Business Times reported in February that Regiments was in dispute with the pension fund, which dismissed Regiments in September 2016, about 25 months into its three-year contract to manage the fund. This was after Transnet said Regiments had allegedly paid itself and Trillian’s fees for the advisory work from fund monies.
In 2018, Regiments also filed court papers to overturn Transnet’s subsequent appointment of Old Mutual, and is demanding outstanding advisory fees worth millions.
Gordhan said in his reply that according to information provided to him by Transnet, the TSDBF board of trustees appointed Regiments in terms of the authority vested in it in terms of the fund's rules. The decision was not ultra vires.
"The dubious and problematic role of Regiments, Trillian and other entities in the state capture process will be investigated further by the respective state-owned company boards — and presumably by the Zondo commission," Gordhan said.