SIU and Transnet gearing up for a legal showdown with Nedbank
This is after Nedbank was sued by the SIU and Transnet in papers filed at the Joburg High Court recently.
Nedbank sign. Picture: Eyewitness News
JOHANNESBURG - The Special Investigating Unit (SIU) and Transnet are gearing up for a legal showdown with commercial lender Nedbank in a bid to claw back billions of rands lost to the crippling State capture corruption.
This is after Nedbank was sued by the SIU and Transnet in papers filed at the Joburg High Court recently.
They claim Nedbank made R2.7 billion in profit from illegal interest rate swaps during the State capture era.
In a renewed attempt to recover losses from state capture, Nedbank has been accused of executing questionable financial transactions on behalf of Transnet.
The case is linked to the State-owned enterprise's acquistion of the over 1,000 locomotives for its fleet.
To fund the acquistion, Transnet took out a loan at the China Development Bank.
To hedge the foreign exchange risks on the dollar denominated loan – a pool of other loans were sourced from Nedbank, ABSA and others by Gupta-associated regiments for Transnet.
Claims have since emerged that in 2015 and 2016 Nedbank engaged in interest rate swaps - which cost Transnet billions of rands against the advise of Transnet’s treasury department and the Public Finance Management Act.
The SIU and Transnet believe the swaps were irrational and unreasonable and wants them set aside, adding Nedbank must be liable for the company’s financial losses as a result.
Nedbank has previously denied any wrongdoing in the matter.