Trillian CEO knew Nene would be sacked, made a killing on rand's fall
Trillian CEO Eric Wood pocketed "hundreds of millions of rand" after buying up US dollars shortly before Nhlanhla Nene was sacked as finance minister in December 2015, a parliamentary inquiry heard on Tuesday.
"On Nenegate, I was told, but it's unconfirmed, that Wood and his people traded on the pre-knowledge [that Nene would be fired]. In November, Wood bought US dollars before the change of minister," a former Trillian employee, Mosilu Mothepu, told parliament's public enterprises committee.
"He [Wood] knew that the announcement would affect the rand . when our investments and the rand was crashing he reverse-traded and made hundreds of millions of rand," said Mothepu.
Mothepu told the committee, which is probing the capture of Eskom and other parastatals, that Wood allegedly knew as far back as October of that year that Nene would be fired and replaced by Des van Rooyen.
Zuma's decision to sack Nene in 2015 sent the rand and markets into a tailspin. Van Rooyen was swiftly replaced by Pravin Gordhan, who was fired by Zuma in early 2017.
Wood and Gupta ally Mohamed Bobat had hired a PR firm to write speeches for Van Rooyen. "Eric started working on a speech [for Van Rooyen] ... but they ended up writing one for Cogta (Co-operative Governance and Traditional Affairs, after Van Rooyen was moved to that department days later)," said Mothepu.
Mothepu was financial advisory CEO at Trillian and left the company in 2016. She provided evidence to then public protector Thuli Madonsela, which was cited in her State of Capture report.
In testimony in parliament, Mothepu told how Trillian made millions from state-owned entities, including Eskom, Transnet, SA Express and Denel.
She said she was also told of a plan on how Bobat would use his proximity to Van Rooyen to channel work and lucrative contracts from Treasury and state-owned entities to Trillian, as reported on in the Sunday Times a year ago.
Key in securing deals was Trillian partner Salim Essa, regularly linked to the Guptas.
"In every SOE, Salim had some kind of relationship with a board member there," she said.
At Eskom, Mothepu and her team got contractor passes and space in a boardroom to do their work which involved "cash-unlocking initiatives" including settling the insurance claim for the Duvha boiler that had exploded.
Trillian was paid R600-million for this work but Mothepu said she did not believe that their services had been necessary or that Eskom received value for money on the deal because Eskom's internal staff could do the work.
At Transnet she took the lead on a project to raise billions in local capital to "blend" with a $2.5-billion loan from the Chinese Development Bank to make it more affordable to finance the procurement of 1064 locomotives.
She said she had worked tirelessly on the project but Regiments Capital was not paid for raising the capital, as it had already been paid a fee for its work on the Chinese Development Bank.
"Imagine my amazement when I saw that R93-million paid to Trillian for that club loan. Trillian had no role in it. In 2015 Transnet had no contractual arrangement with Trillian that would lead to the state-owned company invoicing it for R93-million."
She said often Trillian was paid for work it did not do and without contracts in place. The company used its political connections to win lucrative deals.
Mothepu stated that suspended Eskom chief financial officer Anoj Singh had an "improper relationship" with Wood.
"While we were putting together proposals Singh would give us Eskom information . to boost our proposals . he would give us information on a memory stick, so that [Trillian and McKinsey] would have insider information that other people would not have."
The information, which included Eskom's turnaround strategy, corporate plan, minutes of board meetings and Treasury policies, gave Trillian an edge over rival consultancy firms.
Earlier in October, Eskom said it had asked global consultancy McKinsey to return "unlawful" payments of about R1-billion and Trillian R564-million. Trillian was the purported supply development partner of McKinsey in an agreement it had to provide services to Eskom.