State-owned logistics group Transnet will be terminating its relationship with both Trillian Capital and Regiments Capital in light of the current fallout surrounding the two companies.

The dispute between Trillian and Regiments is reflected in the Public Protector’s recently released ‘State of Capture’ report and is currently also the subject of an internal probe launched by Trillian chairperson Tokyo Sexwale.

In her document, which recommends the creation of a commission of inquiry, former Public Protector Thuli Madonsela noted media reports suggesting that an associate of the Gupta family, Salim Essa, may have, though his ownership in Trillian, benefited from Transnet contracts initially awarded to Regiments.

Following the report’s release, Sexwale announced the appointment of advocate Geoff Budlender to conduct an independent investigation into the veracity of allegations contained in two Sunday Times reports, one of which suggested that Trillian’s CEO Dr Eric Wood had prior knowledge of the dismissal of Finance Minister Nhlanhla Nene, in December.

At Transnet, Regiments was appointed as a subcontractor to McKinsey. Later, Regiments allegedly appointed Trillian as subcontractor and ceded involvement in one transaction to Trillian. However, there is a dispute between Trillian and Regiments executives over the development, as well as the motives behind it. However, Madonsela only indicated that any thorough probe should “form part of the next phase of the investigation”.

Transnet CEO Siyabonga Gama argued that the group was being “dragged” into a “domestic fight” and had, therefore, resolved to terminate relations with both companies, stressing that Transnet’s reputation was “precious”.

However, he also noted that the organisaiton had reviewed that contracts and was comfortable that it had received “full value” from the consultants.

TAKING ACTION
Meanwhile, Gama provided an update on its relations with Futuregrowth Asset Management, which, on August 31, suspended any new lending to Transnet, as well as five other State-owned companies, on governance concerns.

Futuregrowth has since ended its lending freeze in relation to the Industrial Development Corporation and the Land Bank, but has not pronounced on its future plans regarding Transnet, Eskom, the South African National Roads Agency and the Development Bank of Southern Africa.

Gama reported that the group had “engaged” with Futuregrowth on its “unfortunate statements”, which he described as “ungentlemanly conduct”.

“What we have asked, is that the apology be as public as the utterances,” Gama said.

Transnet had also “reserved” its legal rights, owing to its view that the statements made by Futuregrowth chief investment officer Andrew Canter had “moved the market”.

“I don’t want to say anything further on this particular matter, because we are taking action.”