Johannesburg – On Tuesday the Zondo commission heard how a former Eskom employee signed off on a deal that benefited the Guptas to the disadvantage of Eskom.
The commission also heard reasons behind Standard Bank’s decision to cut ties with the global consultancy firm Mckinsey and Gupta-linked Regiments Capital.
Former Eskom employee Johan Bester concluded his testimony on Tuesday. Earlier, he told the commission how he signed off on a letter which altered the coal supply contract between Eskom and Gupta-linked Tegeta.
Tegeta owned a series of mines namely Optimum coal and Brakfontein mine which provided coal to Eskom’s power stations.
The Guptas wanted to increase the supply of coal from Brakfontein and an agreement letter was drawn by Bester.
In the letter drawn up in June 2015, Bester had included two clauses that would have helped protect Eskom. One of the clauses dealt with the combustion test.
That letter was sent by Ayanda Nthetha, an Eskom employee who reported Bester to a Gupta associate. That associate forwarded the letter to Tony Gupta.
The letter was sent back to Eskom, but this letter was not the one written by Bester. It was drafted by a Gupta associate who use parts of Bester’s letter to draft his version.
He sent the new drafted letter back to Eskom, which now contained no protection clauses for Eskom. Bester signed the letter.
Bester was grilled by commission chair deputy chief justice Raymond Zondo on why he signed the letter that clearly appeared to disadvantaged Eskom.
The former Eskom employee said he may have signed it without being aware of the changes. He also cited growing pressure from Eskom executives and his concern about his job.
The commission also heard from Standard Bank’s former head of legal Ian Sinton who outlined the bank’s decision to walk away from its relationship with Regiments and McKinsey.
Sinton also told the inquiry how the Standard Bank decided to cut ties with multi-international consultancy company McKinsey after media reports emerged about the company’s involvement in dealings at Eskom with Regiments Capital and Trillion Capital Partners.
He said McKinsey explained away the reports and said there was bad behaviour but not to the extent reported by the media.
He said the bank was not happy with the response from McKinsey so it decided not to continue with its relationship with McKinsey on management consultancy services.
Sinton then dealt with the risk Standard Bank was worried about regarding Regiments Capital, which is a consultancy firm with links to the Guptas.
Advocate Vincent Maleka, for the commission’s legal team, introduced numerous bank statements which belonged to Regiments. The company had one transactional account with the bank.
The bank statements show numerous cash flows from Regiment’s account into various other business accounts. It also shows large payments of over R50 million from state-owned enterprise Transnet. Money was flowing out quickly as it came in certain circumstances.
Gupta associate Mohamed Bobat was also paid through the account, including Regiment directors who were paid R3 million each.
Sinton said observing all these transactions the bank, which is obliged by law to report suspicious bank activity, summoned Regiments Capital to explain the various account activity.
With the payments from Transnet, Regiments said it had a stake in a contract McKinsey had with Transent and that the company was entitled to a 30% share in the payment.
Regiment’s also explained that Trillian Capital’s Salim Essa, a known Gupta associate, had a 30% share in the payments received by Regiments while a Kuben Moodley had a 5% share.
Essa’s share later went up to 50%.
Sinton said Standard Bank was concerned about the explanation supplied by Regiments and the agreements of payments to various parties. The bank terminated its relationship with Regiments.
The inquiry will resume with testimony from business rescue practitioners that dealt with Gupta-owned mines.