Transnet advised to sue Nedbank over higher interest rates – report

The parastatal’s acting group chief executive testified about how the terms of loans worth about R23 billion were changed, against the advice of junior Treasury officials.


PRETORIA - The decision by the former Transnet board to approve an interest rate swap from a linked to fixed rate may cost the lender Nedbank up to R1.4 billion if the state-owned company is able to recover its losses.

The City Press reported on Sunday that the parastatal had been advised to sue the bank in order to recover the funds lost due to higher interest rates over the last few years.

Acting group chief executive Mohammed Mohamedy testified at the state capture commission of inquiry this week how Gupta-linked Regiments Capital was paid over R200 million for facilitating the change to the terms of a loan.

Earlier this week, Mohamedy told the inquiry how much the interest rate swap had cost Transnet.

“For the Nedbank transactions, Transnet has paid additional interest of R785.3 million. For the pension fund transactions, Transnet has paid additional interest of R696.6 million.”

City Press reported that Mncedisi Ndlovu & Sedumedi Attorneys had advised the company to approach the courts to set aside the interest rate swap on grounds that it was irrational and that it appeared there was collusion between parties to defraud Transnet.

Nedbank had maintained it acted above board.