Transnet Group Acting CEO Mohammed Mahomedy at the state capture inquiry.
Transnet Group Acting CEO Mohammed Mahomedy at the state capture inquiry.

The state capture commission of inquiry has heard how an ill-advised interest rate swap on loans has costs Transnet more than R1 billion but scored Regiments Capital more than R200 million in so-called commissions.

Acting group chief executive Mohammed Mahomedy has testified about how the terms of loans worth about R23-billion were changed, against the advice of junior treasury officials.

The loans were changed from linked interest rate to high, fixed interest rates.

Mahomedy revealed the cost to Transnet of converting the loan from linked interest rates to fixed.

“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.”

However, he says Regiments was paid R227 million for facilitating these interest rate swaps.

“One has to draw the inference that it was done to benefit an entity in the like Regiments, specifically, with the significant amount of money that then flowed to Regiments.”

That payment to Regiments is being challenged in the courts.

EWN