'I did not know': Brian Molefe on half of R78m payment going to Gupta associate

09 March 2021 - 14:58
Former Eskom CEO Brian Molefe at the state capture inquiry. File photo.
Former Eskom CEO Brian Molefe at the state capture inquiry. File photo.
Image: Veli Nhlapo

Former Transnet boss Brian Molefe told the state capture inquiry on Tuesday he did not know that half of a R78m payment he approved for Regiments Capital would end up in the possession of Gupta foot soldier Salim Essa.

Molefe was being grilled about his role in the controversial approval of the revised remuneration model for Regiments. The company was providing transaction advice to Transnet in its procurement of 1,064 locomotives worth more than R50bn.

The contract for the advisory service was valued at R51m but midway through the dealings, then Transnet CFO Anoj Singh petitioned Molefe to revise the remuneration of Regiments. According to Singh's submission to Molefe, Regiments had saved R2.8bn for Transnet, which was over and above the deliverables they were contracted for.

Molefe approved, leading to Regiments scoring R115m for its services.

The former Public Investment Corporation (PIC) and Eskom CEO was cornered on why he approved payment of funds not stipulated in the contract Transnet had with Regiments, half of whose additional payment found its way to Essa's pocket.

Molefe said the Singh memorandum made business sense and at the time he had no idea some of the money was going to benefit a Gupta associate.

“Regiments saved us R2.8bn and the memo was that we pay them R78m,” said Molefe. “One of the things that was uppermost in my mind was, if these people saved us R2.8bn you have to incentivise them to do more. It is a well-known principle in business.

“I did not do it because I like Regiments, I did it because there was R2.8bn on the table for Transnet. It was not an insignificant amount that they saved for us.”

The answer saw Molefe once more locking horns with evidence leader advocate Anton Myburgh in a fierce verbal exchange.

Said Myburgh: “Half of the money was paid to Mr Essa.”

Molefe fired back: “You want to say I was paying half of R78m to Mr Essa and I deny that in the strongest possible terms. I actually did not know Mr Essa.

“You were at the table of the Guptas and Mr Essa was a money-laundering lieutenant of the Guptas,” Myburgh pressed him harder.

Molefe upped the ante: “I hope we are not in this commission to entertain Mr Myburgh’s preconceived conspiracy theories. I am not here to answer what is in Mr Myburgh's head or confirm his conspiracy theories.”

Commission chairperson deputy chief justice Raymond Zondo was forced to intervene, telling Molefe that Myburgh had a right not to accept his answers immediately, but to probe and test them.

Myburgh then put it to Molefe that a forensic investigation by MNS Attorneys found that the R2.8bn he claimed Regiments saved for Transnet in fact did not materialise.

“That is news to me,” said Molefe.

Zondo questioned his due diligence, asking why he did not satisfy himself first that Regiments had indeed saved R2.8bn for Eskom.

Molefe said he “trusted the bona fides of my colleagues” - particularly Singh, who made the recommendation to him. In any event, he added, it was possible that MNS did not know what they were talking about or that they were “bribed” to make that finding.

Molefe's testimony continues.

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