Gupta-linked Regiments overcharged Transnet R90m, inquiry told

Corporate finance expert Jonathan Bloom said Regiments Capital charged Transnet 0.15% to secure a loan worth billions of rands.

FILE: A screengrab of corporate finance expert Dr Jonathan Bloom appearing at the state capture inquiry on 31 May 2019.

PRETORIA - The state capture commission of inquiry on Friday heard how Gupta-linked Regiments Capital overcharged Transnet R90 million for a service it didn’t need to outsource in the first place.

This was among the submission by corporate finance expert Jonathan Bloom at the public hearings in Parktown.

Bloom said Regiments charged Transnet 0.15% to secure a loan worth billions of rands.

“If one compares 0.1% with 0.15%, it doesn’t sound like a big difference, but on a very large amount, it makes a substantial difference. They overcharged by R90 million,” he said.

But Bloom said Regiments should not have been paid for the work in the first place.

“As we determined previously, there was sufficient capacity, knowledge, and skills within the Transnet funding department to perform the required functions. In my opinion, there was no need for Transnet to outsource this function to an external party.”

On Thursday MNS Attorneys' Tshiamo Sedumedi told the state capture commission of inquiry Regiments Capital was unlawfully contracted to Transnet as transaction advisers, then escalated the cost of the deal to over R25 million within two years.