South Africa: ACSA goes after state capture colluders in bid to recover costs

By Xolisa Phillip, in Johannesburg
Posted on Friday, 19 August 2022 10:59

O.R. Tambo International Airport in Johannesburg, South Africa, December 22, 2020. REUTERS/Siphiwe Sibeko

The Airports Company South Africa (ACSA) is in discussions to recover costs from several parties, including Nedbank, implicated in the Commission of Inquiry into State Capture (Zondo) reports, says group manager for legal, Lubabalo Ntsonkota.

Are we finally seeing serious intent behind South Africa’s slow walk to accountability?

Attempts to recover cash looted under the Zuma era have been thin on the ground. However, the Airports Company of South Africa is pioneering efforts to claw back some of the money stolen from South Africa’s large state-owned enterprises.

“Yes, ACSA has been in communication with the parties mentioned above [Nedbank, Phetolo Ramosebudi, and former Regiments Capital executives Eric Wood and Niven Pillay],” Ntsonkota tells The Africa Report, detailing the efforts made to recover money looted from the company.

“In certain circumstances, some initial engagements have taken place about the recovery of the costs. In the next couple of weeks, ACSA expects to have consulted all the parties, including the ones that are yet to be consulted,” Ntsonkota says.

Part 1 of the Zondo reports details how the former treasurer of ACSA, Ramosebudi, “developed a corrupt relationship with [transaction advisers] Regiments Capital” in executing multibillion-rand interest-rate swap deals that featured Nedbank as a counterparty.  

Ramosebudi served as treasurer at ACSA (2007-2011), South African Airways (2012-2015), and Transnet (2015-2018). At all the three state-owned companies, Ramosebudi stands accused of wrongdoing by aiding Regiments Capital’s looting sprees in exchange for kickbacks.

In 2018, Ramosebudi resigned “with immediate effect” from Transnet after being served with a notice of intent to suspend him when the company’s new leadership took over.

With the collusion of Ramosebudi, Regiments Capital arranged to extract more than an additional R50m [$3.03m) in gratuitous payments at the expense of ACSA

With the collusion of Ramosebudi, Regiments Capital arranged to extract more than an additional R50m [$3.03m) in gratuitous payments at the expense of ACSA

In May 2022, Ramosebudi was among former Transnet executives who appeared before the Commercial Crimes Court in Palm Ridge for their role in state capture.

In Part 1 of its reports, the Zondo Commission says: “In 2008, Regiments Capital [was] engaged by ACSA to advise it on a number of funding structures.”

“Although Regiments had been appointed on terms that provided for a specific fee, with the collusion of Ramosebudi, Regiments Capital arranged to extract more than an additional R50m [$3.03m) in gratuitous payments at the expense of ACSA,” says the Commission.

Regiments scored the extra fees from an R2bn interest swap between ACSA and Nedbank Capital, and an R1.5bn interest swap between ACSA and Nedbank Capital.

Regiments made the money by submitting invoices to Nedbank, which recouped the funds from ACSA during the lifespan of the interest swap transactions.   

According to the Commission, “a disturbing feature of Nedbank’s involvement [is that] … Nedbank dealers Mario Visnenza and Moss Brickman … appear to have had an arrangement with Wood in terms of which the Regiments ‘fee’ would be matched by an equivalent amount to be paid to Nedbank by ACSA”.

“This arrangement was reflected in Mr Visnenza’s repeated statement to Mr Wood in e-mails relating to Nedbank, ACSA, and Regiments transactions. Mr Visnenza’s statement was: ‘We leave it to you to include a margin for us to share on the usual 50/50 agreement’,” says the Zondo Commission in its reports.

The Commission says: “There is no evidence Nedbank sought proof from ACSA that ACSA had authorised the arrangement in terms of which Nedbank, as ACSA’s counterparty, would pay the ‘fees’ of ACSA’s agent, Regiments Capital, upfront and recover these ‘fees’ from ACSA over the life of the transaction with ACSA.”

Zondo recommendations

In Part 4 of the reports, the Commission recommends that “ACSA take steps to recover from Regiments, Mr Ramosebudi, Mr Wood, and Mr Pillay and failing them, Nedbank, … the amounts paid to Regiments under the interest-rate swap contracts and any additional losses suffered by ACSA on those contracts”.

The Zondo Commission also wants law enforcement agencies to investigate Brickman, Visnenza, and Nedbank “in relation to these contracts with a view to the National Prosecuting Authority [NPA] prosecuting Mr Brickman, Mr Visnenza and/or Nedbank on charges … if the investigation reveals that such prosecution is warranted”.

Nedbank’s version in relation to these transactions has not been heard

In addition, the Commission has recommended that the Asset Forfeiture Unit of the NPA recover “Nedbank’s profits under the interest swap contracts … unless Nedbank has a valid defence to such recovery claims”.

In Part 1 of its reports, the Zondo Commission also notes that it “had intended to canvass these issues with Nedbank in evidence at the hearings, but … time ran out before this could take place”…. “So Nedbank’s version in relation to these transactions has not been heard.”

ACSA action

Ntsonkota says ACSA “is determined to implement the recommendations of the State Capture Report[s] speedily by utilising both internal and external resources where necessary”.

Ntsonkota reveals to The Africa Report that ACSA has developed a plan, “which is intended to define the timelines of how it [ACSA] seeks to implement the recommendations made in the Zondo report[s]”.

“The implementation plan will detail the actions ACSA proposes to take in relation to the findings made by the Commission and said the plan will be presented to Parliament,” says Ntsonkota.

“In addition to the Zondo report[s], an internal investigation was undertaken at ACSA. As part of the way forward to safeguard its assets, ACSA is urgently implementing measures to safeguard itself from corrupt activities,” Ntsonkota says.

Nedbank response

Nedbank spokesperson Sarah Mautjana directed The Africa Report to the bank’s statement issued on 6 January 2022 in response to Part 1 of the Zondo reports.

“The Nedbank statement remains the same following the release of the other reports. We will not be issuing any interviews on the reports,” Mautjana says.

In its integrated annual report for the year ended 31 December 2021, Nedbank says: “The board has taken note of the Zondo Commission’s report and highlights that, based on our review of the report, no adverse findings have been made against Nedbank.”

“We will continue to cooperate fully with any investigations undertaken by the appropriate authorities. … The transactions covered in Part 1 [ACSA] …  are known to Nedbank and have been the subject of detailed internal and independent external legally privileged reviews,” Nedbank says in its 2021 annual report.

“… Nedbank acted as a reasonable banker and had at no time acted unlawfully. We note, and take very seriously, the reputational risk to Nedbank as a consequence of being mentioned in the various reports,” Nedbank says.

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