Cash-strapped Prasa is investing R1-billion with the bank that lent President Jacob Zuma R7.8-million to "pay back the money" in the Nkandla scandal.
This is despite the bank not meeting the state entity's investment requirements and the Passenger Rail Agency of South Africa itself struggling financially.
The Sunday Times has learnt from senior executives that Prasa's interim chairwoman, Advocate Tintswalo Makhubele, and acting CEO, Cromet Molepo, are putting their weight behind a move to ensure that the first R500-million tranche of the investment is paid to VBS Mutual Bank this week - without any agreement being signed.
Makhubele and Prasa denied the rail authority was investing R1-billion with VBS, saying this was only a proposal from the bank. Makhubele also argued that the investment idea predated her appointment on October 19 and that no one had been instructed to pay VBS.But an insider at VBS confirmed it was expecting a payment from Prasa by Friday. "Prasa had agreed to invest R1-billion and it will come in two tranches and the first payment was expected before the end the of business day on Friday," said the source.
"We are not being used as a conduit for any corrupt activities, this is a pure investment and it will be monitored by the National Treasury and the Reserve Bank. Prasa will get value for their money. This is not money intended for Zuma or the Guptas, it is pure investment," said the VBS official.
Yesterday Molepo passed the buck to Zide, saying: "There was a proposal prior to my time, and there have been other proposals."
Molepo said the proposal made by VBS was in the "normal course" of business.
Pressed on whether or not he was admitting that Prasa was entertaining an unsolicited bid from VBS or any other bank, Molepo denied this and again put the blame on Zide: "I was told that they get proposals from time to time, and that there is another proposal in addition to the VBS one in possession of Prasa."
Zide yesterday confirmed that Prasa received an unsolicited bid from VBS and that it was willing to invest with the bank if it met all the criteria.
"As far as I know the new board is still busy with the matter with VBS and appointed an auditor to look into the matter on Friday," he said.
"After VBS approached us and made their proposal, I wrote them a letter assuring them that if they can meet our investment criteria we can invest between R500-million up to R1-billion for a start with them."
Zide said Prasa has invested about R13-billion with other banks. Nothing had been paid to VBS yet, he said.
Prasa, according to another executive, would be in the red by R1.7-billion by the end of March on its operational budget due to bloated employee numbers.
A senior executive at Prasa said Page submitted her resignation in December as pressure mounted for her to sign off on the payment, but Molepo refused to accept it.
"She has been under so much pressure and she is really scared to sign off on this deal because there are no reasons for Prasa, which is struggling financially, to invest money it doesn't have," said the executive.
It is understood Page was so frantic that she contacted the Treasury to raise concerns about the deal with VBS. A senior government official confirmed Page had contacted the Treasury to share her concerns...