C O M M I S S I O N O F I N Q U I RY I N TO S TAT E C A P T U R E
H E L D AT
PA R K TO W N , J O H A N N E S B U R G

10

04 DECEMBER 2019

D AY 1 9 6

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04 DECEMBER 2019 – DAY 196
PROCEEDINGS RESU ME ON 4 DECEMBER 2019
CHAIRPERSON : Good morning Ms Sello.
ADV MAHLAPE SELL O : Good morning.
CHAIRPERSON :

G o o d m o r n i n g e v e r y b o d y.

A D V M A H L A P E S E L L O : M o r n i n g C h a ir.
CHAIRPERSON :

I s e e t h a t w h e n w e a r e g o i n g t o h a v e th is t e c h n ic a l

e v i d e n c e o f M r C h a b i w e d o n o t h a v e a n y j o u r n a l is ts a t t h e b a c k .

I

t h i n k M r C h a b i c h a s e d th e m a w a y w i th a l l t h e t e c h n ic a l t e r m s .
A D V M A H L A P E S E L L O : P e r h a p s C h a ir i t m i g h t b e th e y p r e f e r t o fo ll o w
10

it o n T V.
CHAIRPERSON :

J a w e ll m a y b e th is is b e c a u s e w e a r e s t a r t in g e a r l y

t h e y w il l c o m e l a t e r.
A D V M A H L A P E S E L L O : L a te r.
C H A I R P E R S O N : G o o d m o r n i n g Mr C h a b i .
M R C H A B I : G o o d m o r n in g C h a ir.
CHAIRPERSON:

L e t u s – I th i n k l e t u s ju s t r e d o t h e o a th a n d – o r

a ffir m a t io n ? I t h in k M s S e ll o y e s t e r d a y w e w e r e d e a l in g w it h t h e ty p e s
o f e v i d e n c e – y o u n o t l is t e n i n g t o m e .
ADV MAHLAPE SELLO:
20

I a p o l o g is e C h a ir.

I g o t d is tr a c t e d .

My

a p o lo g i e s .
C H A I R P E R S O N : Yo u – M s M o le f e is m u c h m o r e c o m p e l li n g t o o .
ADV MAHLAPE SELLO:

S h e is a p e r s u a s i v e j u n io r t h a t I w ill a d m i t.

C h a ir I d o a p o l o g is e .
C H A I R P E R S O N : S h e is p o w e r f u l . B u t i t i s n o t h e r f a u l t .
A D V M A H L A P E S E L L O : N o t a t – i t is m i n e C h a ir.

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04 DECEMBER 2019 – DAY 196
C H A I R P E R S O N : N o w I w a s s a y in g t h a t y e s t e r d a y w e w e r e li s t e n i n g t o
e v i d e n c e t h a t is v e r y n o n - t e c h n i c a l .
A D V M A H L A P E S E L L O : Ve r y n o n - te c h n i c a l .
CHAIRPERSON :

Ve r y n o n - t e c h n i c a l a n d a ft e r M r C h a b i w e w il l l is te n

t o e v i d e n c e th a t i s v e r y n o n - t e c h n ic a l .
A D V M A H L A P E S E L L O : S t i ll .
C H A I R P E R S O N : J a . O k a y a lr i g h t.
R E G I S T R A R : P le a s e s t a te y o u r fu ll n a m e s f o r th e r e c o r d ?
M R C H A B I : M y n a m e i s A l is te r O u e m a k o u a C h a b i .
10

REGISTRAR:

D o y o u h a v e a n y o b je c ti o n s t o t a k in g t h e p r e s c r i b e d

oath?
MR CHABI: I do not.
REGISTRAR:

D o y o u c o n s i d e r t h e o a th t o b e b in d in g o n y o u r

conscience?
MR CHABI: I do.
R E G I S T R A R : D o y o u s w e a r t h a t t h e e v i d e n c e w h ic h y o u w i ll g iv e w i ll
b e t h e tr u t h ; t h e w h o l e tr u t h a n d n o t h i n g b u t th e tr u t h , i f s o p l e a s e
r a i s e y o u r r ig h t h a n d a n d s a y, s o h e l p m e G o d .
M R C H A B I: S o h e lp m e G o d .
20

C H A I R P E R S O N : Th a n k y o u . I th i n k t o th e e x t e n t t h a t i t is n e c e s s a r y –
it m a y b e n e c e s s a r y t o r e fr e s h o u r m e m o r i e s ju s t a li t tl e b i t w i t h w h a t –
o n w h a t M r C h a b i te s ti fi e d a b o u t la s t t i m e . Yo u m a y d o s o b u t I t h i n k i f
a t a l l p o s s i b l e l e t u s n o t s tr e tc h i t . L e t u s d o o n ly i n s o fa r a s it is r e a ll y
n e c e s s a r y.
A D V M A H L A P E S E L L O : Th a n k y o u C h a ir.

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04 DECEMBER 2019 – DAY 196
C H A I R P E R S O N : I h a v e g o t – w e h a v e g o t t w o o t h e r w it n e s s e s c o m i n g
u p t o d a y.
A D V M A H L A P E S E L L O : U n d e r s to o d .
C H A I R P E R S O N : S o w e w o u l d l ik e t o – I w o u l d lik e u s t o f in is h a s s o o n
a s p o s s i b le w i t h o u t d o in g a n y i n j u s ti c e t o M r C h a b i ’s e v i d e n c e .
A D V M A H LA P E S E L L O : I n d e e d C h a ir. I n a n ti c i p a t io n o f th a t w e h a v e
t a k e n t h e li b e r ty t o p r e p a r e s o m e t h i n g t h a t w e c a ll a w o r k i n g t o o l . I t i s
a li t t le d o c u m e n t w e a r e g o in g to h a n d o v e r t o t h e C h a ir.
C H A I R P E R S O N : Ye s .
10

A D V M A H L A P E S E L L O : A n d b a s i c a ll y i t i s to e x tr a c t t h e s a li e n t i s s u e s
c o m i n g o u t o f Mr C h a b i ’s e v e id e n c e l a s t W e d n e s d a y.
C H A I R P E R S O N : L a s t ti m e .
A D V M A H L A P E S E L L O : Ye s .
CHAIRPERSON : Hm.
A D V M A H L A P E S E L L O : A n d c o n f in e o u r s e lv e s r e a ll y t o t h o s e a s p e c t s
t h a t a r e r e le v a n t to t h e is s u e h e w il l b e s p e a k i n g t o .
C H A I R P E R S O N : Ye s , y e s , y e s .
A D V M A H L A P E S E L L O : W e a ll h a v e a c o p y w e c a n j u s t – h e w il l …
C H A I R P E R S O N : Ye s .

20

ADV MAHLAPE SELLO:

M r C h a b i w il l l e a d u s v e r y b r i e fl y – q u ic k ly

t h r o u g h i t [ i n d is ti n c t ] c o p y.
C H A I R P E R S O N : Ye s .
A D V M A H L A P E S E L L O : D o c u m e n t.
C H A I R P E R S O N : O k a y.
A D V M A H LA P E S E L L O :

A n d t h e n w e g e t t o t h e is s u e a t h a n d f o r

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04 DECEMBER 2019 – DAY 196
t o d a y.
C H A I R P E R S O N : O k a y.
ADV MAHLAPE SELLO:

W e h a v e a ls o p r e p a r e d f o r y o u C h a ir a

g l o s s a r y o f te r ms .
C H A I R P E R S O N : O h y e s t h a t is …
A D V M A H LA P E S E L L O : It is – t h e g l o s s a r y o f t e r m s w ill in ti m e f o r m
p a r t o f y o u r f il e .
C H A I R P E R S O N : O h i t is …
A D V M A H L A P E S E L L O : Ye s th e w o r k i n g d o c u m e n t i s j u s t f o r t o d a y t o
10

h e l p u s w o r k t h r o u g h t h e n e x t p a r t o f t h e e v id e n c e .
C H A I R P E R S O N : O k a y. O k a y.
A D V M A H L A P E S E L L O : I t is t h e g l o s s a r y o f t e r m s is n o t p a g i n a t e d y e t
b e c a u s e i t is a s s u m e d i t is n o t f in a l.
CHAIRPERSON : Hml.
A D V M A H L A P E S E L L O : A s w e g o t h r o u g h h is e v i d e n c e t o d a y i t m i g h t
g r o w a n d w e w il l u p d a t e a n d t h e n …
CHAIRPERSON : Ja.
A D V M A H L A P E S E L L O : U p d a t e y o u r f il e a c c o r d i n g ly.
C H A I R P E R S O N : O k a y.

20

A D V M A H LA P E S E L L O :

T h a n k y o u C h a i r.

S o th e f ir s t d o c u m e n t th e

la n d s c a p e d d o c u m e n t is w h a t w e c a l l a s u m m a r y o f Mr C h a b i ’s p r e v i o u s
evidence.
CHAIRPERSON : Oh yes.
A D V M A H L A P E S E L L O : Ye s .
CHAIRPERSON : Huh-uh.

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04 DECEMBER 2019 – DAY 196
ADV MAHLAPE SELLO:

A n d i t is t h a t w h ic h M r C h a b i w il l t a k e u s

t h r o u g h v e r y q u ic k ly n o w.
CHAIRPERSON : Ja.
ADV MAHLAPE SELLO:

J u s t s o w e – w e lo c a t e o u r s e l v e s i n h is

s t a te m e n t t h e C h a i r w il l r e c a l l t h a t a t p a r a g r a p h 2 . 1 o f M r C h a b i ’s
s t a te m e n t h e s e ts o u t h e t a s k s th a t h e h a d to u n d e r t a k e .
CHAIRPERSON : Ja.
A D V M A H L A P E S E L L O : Th e fir s t w a s t o r e v ie w th e b u s i n e s s c a s e o f
3 8 . 6 b i ll io n a n d t h e s e c o n d w a s to a s s e s s th e a c c u r a c y o f th e 3 8 .6
10

b i ll io n . Th e th ir d w a s t o i d e n ti fy t h e r e a s o n s fo r t h e in c r e a s e fr o m 3 8 . 6
t o 5 4 b i ll io n . A n d t h e n t o te s t t h e p o s s i b i li ty o f th e r e a s o n s a d v a n c e d
f o r t h a t i n c r e a s e . T h e fir s t t w o i s w h a t w e d e a l t w it h l a s t w e e k w h i c h i s
– a n d h e i s c o n c l u s io n w a s t h a t h e w a s h a p p y w it h t h e r e v i e w – w i t h
t h e b u s i n e s s c a s e i ts e l f a n d h e c o n s id e r e d t h a t th e E T C E s ti m a t e d
To t a l C o s t o f 3 8 .6 b i ll io n fu lly v a li d a t e d .
d e a l w i t h to d a y is t h e fi n a l a s p e c t.

What we then are going to

N o w Mr C h a b i w e h a v e p r e p a r e d

t h is li t t le t a b l e f o r o u r s e lv e s t o tr y a n d u n d e r s t a n d w h e r e y o u w e r e a t
la s t w e e k s o t h a t w e a r e b e t t e r a b l e t o f o ll o w y o u r e v id e n c e t o d a y. I f
y o u c o u ld j u s t q u ic k ly ta k e u s t h r o u g h th e d o c u m e n t – t h e w o r k to o l
20

t h a t w e p r o v id e d y o u w i t h ?
MR CHABI:

O k a y. T h a n k y o u A d v o c a t e . I c a n ju s t s t a r t in g o ff C h a ir

w i t h p a g e 1 I t h i n k . W h a t w e l o o k e d a t t o s t a r t o ff w i th h a v in g r e a d t h e
m a n d a t e a d d r e s s w h a t t h e m a n d a te r e q u i r e d o f u s w a s th e r e v ie w o f
the business case.

W e l o o k e d a t t h e – h o w r e v e n u e w a s m o d e ll e d in

t h e b u s i n e s s c a s e . W e l o o k e d a t t h e s u b - v a r ia b le s m a k i n g u p r e v e n u e

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04 DECEMBER 2019 – DAY 196
c o m p o n e n ts , ta r i ffs , v o l u m e , a n d d is ta n c e . W e a l s o lo o k e d a t h o w t h e
c o s ts c o m p o n e n ts w e r e m o d e ll e d . A n d I t h i n k a ll o f th o s e w e r e o v e r a
3 6 y e a r p e r i o d . W e t h e n w e n t o n t o l o o t a t w h e r e E T C f e ll w i t h i n th a t .
W e w e r e h a p p y t h a t t h e ir a s s u m p ti o n s i n r e la t io n t o t h o s e v a r i a b le s
were reasonable.
the period.

A n d a s [ in d is ti n c t ] w h i c h th e y w e r e e s c a la t e d o v e r

A n d th e n j u s t to h i g h li g h t th e c o m p o n e n ts m a k in g u p

r e v e n u e a s w e l o o k e d a t th e m .

W e l o o k e d a t th e t o t a l c o s t o f

o w n e r s h i p a n d t h o s e r e l a t e to t h e i m m e d i a te c o s ts o f a c q u ir i n g a n d
o p e r a ti n g t h e l o c o m o t iv e .
10

W e lo o k e d a t t h e i n fr a s tr u c t u r e c o s t s .

We

lo o k e d a t t h e w a g o n c o s ts . W e l o o k e d a t o v e r h e a d a n d t a x c o s ts . W e
s p o k e a b i t o f h o w t a x w a s m o d e l le d . W e w e r e h a p p y w i t h t h e w a y it
w a s d o n e b e c a u s e it w a s c o n s e r v a tiv e .
ADV MAHLAPE SELLO : Just before – just before you go overleaf you
– y o u h a v e a p o i n t th e r e a n d C h a ir t h i s is – th is b e i n g a w o r k i n g
d o c u m e n t s o m e ti m e s i t i s c o r r e c t e d a n d a m e n d e d b y h a n d .

We

a p o lo g i s e . W e – y o u in d i c a t e th a t th e N P V w a s v a li d a te d ?
MR CHABI:

C o r r e c t s o w e w e r e h a p p y w i t h th e fi n a l r e s u l t o f 2 . 7

b i ll io n .
A D V M A H L A P E S E L L O : A n d t h a t – a s w e s a i d l a s t w e e k t h a t is ju s t
20

b a s ic a lly p r o fi t .
M R C H A B I: I t is .
A D V M A H L A P E S E L L O : O v e r t h e l if e o f t h e p r o j e c t .
M R C H A B I : O v e r t h e li f e o f th e p r o j e c t . C o r r e c t .
A D V M A H L A P E S E L L O : O v e r t h e l if e o f t h e p r o j e c t y e s .
CHAIRPERSON : Correct. We then went on to test the accuracy of the

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04 DECEMBER 2019 – DAY 196
3 8 . 6 b il li o n d e lv i n g i n to t h e c o m p o n e n ts o f t h e 3 8 .6 b i ll io n a n d w e
lo o k e d a t t h e f o r e x c o s t s – t h e f o r e x h e d g in g c o s t s a l lo w e d fo r
[i n d is t in c t] o k a y. W e a ls o lo o k e d a t t h e i n fl a ti o n c o s ts a l lo w e d fo r a n d
w e l o o k e d a t i n fl a ti o n l o c a lly a n d in f la t io n a b r o a d . I n t h is in s ta n c e w e
u s e d t h e U S a s a n i n d ic a t o r o f th e i n f l a t i o n a b r o a d .

We were happy

w i t h t h e – t h e a s s u m p t i o n s m a d e a r o u n d t h o s e v a r ia b l e s a n d th e
in c l u s i o n o f t h o s e v a r i a b l e s .
ju s t i fi a b l e i n t h e b u s in e s s c a s e .

We found them to be reasonable,
Al s o t o n o t e th a t t h e 3 8 .6 b il li o n

in c l u d e d c o n ti n u a n c e c o s ts o f a b o u t R 2 . 2 b il li o n .
10

So we were happy

with that figure.
ADV MAHLAPE SELLO:

O k a y y o u t h e n b r i e fl y d e a l w i th t h e q u e s t i o n

o f p r o fi t a b il i ty a t 3 8 .6 b i ll io n .
MR CHABI:

Correct.

S o o n t h e p r o f i ta b i li ty e n d w e l o o k e d a t t h e

p r e s e n t v a lu e o f th e r e v e n u e w h ic h s a t a b o u t R 1 0 9 b i ll io n . W e h a d a
s li d e o n t h a t . W e a ls o l o o k e d a t t h e p r e s e n t v a lu e o f a c o s t w h ic h s a t
a t a b o u t R 1 0 6 b i lli o n . In t h a t R 1 0 6 b i ll i o n y o u h a d E T C c o s t s o f 3 8 .6
b i ll io n b u t a s m e n t io n e d th e R 1 0 6 b il li o n is t h e p r e s e n t v a l u e o f a ll
c o s ts . S o t h e p r e s e n t v a l u e o f th e E T C a n d I th i n k w e t o u c h e d it v e r y
h i g h l e v e l o n t h is w a s a b o u t R 2 0 b il li o n . T h a t is w h e n y o u b r i n g b a c k
20

t h e E T C c o s t s o f 3 8 . 6 b ill i o n to c u r r e n t t e r m s . A t t h a t ti m e it w a s 1 8
April 2013.

W e s p o k e a b o u t Tr a n s n e t’s h u r d le r a te a t t h e ti m e w h ic h

was 18.56 % .

A n d w e a ls o d i d s o m e s e n s i t iv it y a n a ly s is a r o u n d t h a t

r a te t o g iv e y o u C h a ir a n i n d ic a ti o n o f h o w t h a t p r o f it o f 2 . 7 b i ll io n
v a r ie d o r c h a n g e d w i t h t h e c h a n g e in t h e r i s k a n d i n th e h u r d le r a t e .
S o r r y s o th e h u r d le r a te w a s a l s o – w a s e q u a l t o t h e r is k d is c o u n t r a t e

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04 DECEMBER 2019 – DAY 196
in t h i s i n s t a n c e .

Apologies.

I t h i n k w e t o u c h e d o f t h i s – th e n e t t

p r e s e n t v a l u e r e f le c ts t h e p r o fi t a b i li ty o f t h e p r o j e c t .

I n fa c t w e u s e d

p r o f i ta b il it y a n d n e t t p r e s e n t v a l u e s y n o n y m o u s ly i n la s t w e e k ’s
p r e s e n t a ti o n . W e a ls o s p o k e a b o u t a l o w e r o f th e h u r d l e r a te s in t h is
c a s e a ls o th e r i s k d i s c o u n t r a t e r e s u l t in g i n a n i n c r e a s e in y o u r p r o f i t
p o s i ti o n i n th is i n s t a n c e t h e n e t t p r e s e n t v a l u e .
A D V M A H LA P E S E L L O : S o – s o t h e h u r d l e r a t e a t 1 8 . 5 6 g iv e s a n N P V
o f 2 . 7 b il li o n ?
M R C H A B I : C o r r e c t.
10

A D V M A H LA P E S E L L O :

B u t is t h a t N P V w e r e t o r e d u c e – n o if t h a t

h u r d le r a t e w e r e to r e d u c e s a y t o 1 4 w e e x p e c t a h i g h e r N P V.
M R C H A B I : C o r r e c t.
A D V M A H L A P E S E L L O : B e c a u s e t h e h i g h e r p r o f it .
M R C H A B I : C o r r e c t . I n f a c t th e 1 2 . 5 6 w h i c h w a s t h e w e i g h t e d a v e r a g e
c o s t o f c a p i t a l.

E s s e n t ia ll y w h ic h ju s t c o l le c t iv e l y w h a t y o u r c a p i ta l

p r o v i d e r s a r e l e v y in g o n y o u t o g iv e y o u t h e c a p i t a l .

And I say

c o l l e c ti v e b e c a u s e w e a r e lo o k in g a t d e b t a n d e q u i t y i n t h is i n s t a n c e .
O k a y. T h e w e i g h t a v e r a g e c o s t o f c a p i t a l a t t h e t i m e w a s 1 2 . 5 6 % . A t
1 2 . 5 6 % t h e p r o f i ta b il it y o f t h e p r o j e c t w a s a r o u n d R 3 4 . 1 b il li o n . O k a y.
20

I t i s a n i n d ic a ti o n th a t t h a t p r o fi t a b il i ty i n c r e a s e s a s y o u lo w e r y o u r
d is c o u n ts o r h u r d l e r a te .
ADV MAHLAPE SELLO:

S o w o u ld w e b e c o r r e c t t h e n i n d r a w in g t h e

c o n c l u s i o n t h a t th e h u r d l e r a te is – is o n e o f th e t o o ls t h a t i n t h is c a s e
Tr a n s n e t u s e d t o d e t e r m i n e w h e t h e r t h e p r o j e c t i s p r o fi t a b l e o r n o t a n
t o e n a b le Tr a n s n e t t o t a k e t h e a p p r o p r ia t e d e c is i o n a b o u t t h a t g o i n g

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f o r w a r d w i t h t h e p r o je c t o r n o t ?
M R C H A B I : I t is w a s a k e y p a r a m e te r in d e te r m i n in g t h e p r o fi t a b il i ty o f
the project.
A D V M A H L A P E S E L L O : O k a y.

T h a n k y o u , y o u m a y c o n ti n u e .

MR CHABI: We move onto …
A D V M A H L A P E S E L L O : W e m o v e o n to f o r e x a n d e s c a l a ti o n n o w.
M R C H A B I : O k a y. W e a ls o l o o k e d a t f o r e x h e d g i n g a n d th a t w a s a –
w e ll i t w a s a d is c u s s i o n to b e h a d c o n s i d e r in g t h a t t h e m a n d a t e
r e q u ir e d a s k e d t o d e t e r m in e w h e t h e r 3 . 6 b il li o n a ll o w e d f o r fo r e x
10

h e d g i n g c o s ts a n d i n fl a ti o n . S o w e d is c u s s e d th a t a t le n g th a n d w e n t
a s f a r a s v a l id a ti n g [ in d is ti n c t ] t h a t is i n fl a ti o n a s o p p o s e d t o . O k a y. I t
is [ i n d is ti n c t ] .
A D V M A H L A P E S E L L O : Ye s .
MR CHABI:

O k a y s o f o r e x h e d g i n g e s c a l a ti o n c o s t w e r e c o n s id e r e d

a m o n g s t o th e r v a r ia b l e s .

S o w e l o o k e d a t o th e r v a r ia b le s o u ts i d e o f

E T C a s m e n t io n e d t o b e a b l e t o s p e a k th e 2 . 7 y o u h a d t o lo o k a t t h e
p r o j e c t i n it s e n tir e ty a n d n o t j u s t th e E T C w h ic h m a d e u p a – a t in y
p r o p o r ti o n o f t h e t o ta l c o s t .

In th is i n s t a n c e 2 0 % o f t h e t o t a l p r o j e c t

c o s ts a n d a b o u t 4 7 % o f t h e t o t a l c o s t o f o w n e r s h ip . O k a y. S o w e w e r e
20

happy with those variables.
A D V M A H L A P E S E L L O : Ye s .
M R C H A B I : I t h i n k t h e n e x t p a g e j u s t s p e a k s t o t h e d e fi n i t i o n o f w h a t
h e d g i n g is .
ADV MAHLAPE SELLO:

T h e n y o u d e a l s p e c i f ic a l ly – y o u t o l d – y o u

ju s t u s t h a t y o u c o n s i d e r e d tw o fa c to r s w h i c h th e fo r e x h e d g in g .

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04 DECEMBER 2019 – DAY 196
M R C H A B I : C o r r e c t.
A D V M A H L A P E S E L L O : O n t h e o n e h a n d a n d i n fl a ti o n o n th e o th e r.
M R C H A B I : C o r r e c t.
A D V M A H L A P E S E L L O : A n d y o u r m a n d a t e r e q u ir e d y o u t o d e te r m in e
w h e t h e r th e y w e r e in c l u d e d in t h e 3 8 . 6 b il li o n E T C . S o f r o m y o u r p a g e
4 a t – u n d e r 4 y o u f ir s t d e a l w i th f o r e x h e d g in g a n d if o n e l o o k s
o v e r l e a f y o u d e a l w it h i n fl a ti o n .
M R C H A B I : C o r r e c t.
ADV MAHLAPE SELLO:
10

S o ju s t s o w e u n d e r s t a n d th e c o n c e p ts a n d

h o w t h e y a p p ly j u s t b r i e fly t a k e u s th r o u g h p a g e 4 a s r e g a r d s fo r e x a n d
t h e n y o u m o v e o v e r t o t h e i n fl a ti o n o v e r le a f .
M R C H A B I : O k a y. S o h e d g i n g a s I e x p l a i n e d t h e l a s t s e s s i o n w a s – i s
s i m p l y a tr a n s a c ti o n t h a t y o u e n t e r i n t o t o e l i m in a t e r i s k .
a b o u t f o r e x h e d g in g i n t h is i n s ta n c e .

We spoke

S o t o p r o t e c t – Tr a n s n e t t o

p r o t e c t i ts e l f a g a in s t t h e c h a n g e s in v a l u e s r e s u l t in g fr o m f l u c tu a ti o n s
in t h e f o r e i g n c u r r e n c y in t h e fu t u r e w o u l d h a v e e n te r e d o r w o u ld h a v e
h a d i t s s u p p l ie r s e n t e r i n t o a h e d g i n g s o t h a t t h e c o s t is n o t p a s s e d o n
to them.

O k a y.

A t t h e v e r y l e a s t w o u l d h a v e e n t e r e d in t o th o s e

tr a n s a c ti o n s i ts e l f if i t f o u n d th a t th e O E M ’ s c o s ts w e r e e x c e s s iv e .
20

A D V M A H L A P E S E L L O : O k a y.
MR CHABI:

Ye s b y t h e p o l ic y r e q u ir e m e n ts .

a l m o s t a n y t h in g .

I mean y ou can hedge

I s e e y o u h a v e h ig h l ig h t e d t h e r e s o m e o f t h e

e l e m e n ts y o u c o u l d h e d g e . Yo u c a n h e d g e a l m o s t a n y t h i n g . I n t h i s d a y
a n d a g e y o u c a n p r ic e a l m o s t a n y t h i n g , y o u c a n h e d g e a l m o s t a n y t h i n g .
I t h i n k s o m e o f t h e t h i n g s y o u c a n h e d g e a r e c o m m o d i ti e s , m a i z e , o il .

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04 DECEMBER 2019 – DAY 196
S o a n y th in g th a t y o u c a n p r i c e e s s e n ti a l ly c a n b e h e d g e d .
A D V M A H L A P E S E L L O : A n d th a t w o u l d b e t h e p r ic e g o in g fo r w a r d ?
M R C H A B I : C o r r e c t.
A D V M A H L A P E S E L L O : S o y o u a r e h e d g i n g w h a t is y e t t o h a p p e n .
M R C H A B I : W h a t is y e t t o c o m e .
ADV MAHLAPE SELLO : Ja.
MR CHABI:

That is correct.

Ye s .

I n t h is i n s t a n c e w e w e r e l a r g e ly

c o n c e r n e d w i t h t h e h e d g i n g o f f o r e i g n e x c h a n g e r i s k . A n d t o a c e r ta i n
e x t e n t i n fl a ti o n b u t I t h i n k w e w i ll to u c h o n t h a t. A n d t h e i d e a w a s to
10

p a s s t h e i n fl a ti o n c o s ts o n t o t h e O E M ’s b u t t h e n t h e r e w e r e a l te r n a ti v e s
t h a t Tr a n s n e t c o u l d h a v e l o o k e d a t.
A D V M A H L A P E S E L L O : Ye s .
C H A I R P E R S O N : W h e r e in f la t io n c o s ts w e r e c o n c e r n e d .
ADV MAHLAPE SELLO:

S o i f – i f y o u e n t e r in t o a l o n g t e r m s e v e n

y e a r c o n tr a c t o f w h ic h a r e c o m p o n e n t t h e p r ic e th e r e o f is r e f l e c te d i n
f o r e i g n c u r r e n c y y o u w o u l d – i t m a k e – i t i s p r u d e n t to h e d g e t h a t
currency going forward?
M R C H A B I : C o r r e c t.
ADV MAHLAPE SELL O : Is that what …
20

MR CHABI:

T h e p o li c y r e q u ir e d Tr a n s n e t to d o s o .

So you would

a c t u a ll y h e d g e th e e s c a l a te d p r i c e .
ADV MAHLAPE SELLO:

O k a y. A n d t h e e ffe c t o f th a t w o u l d b e i f t h e

fl u c t u a t i o n – i f t h e fl u c t u a t i o n is a d v e r s e t o t h e r a n d g o i n g f o r w a r d y o u
a r e lo c k e d i n t o a l o w e r r a t e o f e x c h a n g e a s a t t h e d a te o f c o n c l u d i n g
the hedging agreement.

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04 DECEMBER 2019 – DAY 196
M R C H A B I : T h a t is c o r r e c t . S o w i th h e d g i n g y o u g iv e u p a n y u p s id e .
ADV MAHLAPE SELLO : Ja.
M R C H A B I : A n d y o u a ls o g i v e u p – y o u a ls o p r o t e c t y o u r s e l f a g a i n s t
t h e d o w n s id e . In t h i s i n s t a n c e b e c a u s e a s m e n ti o n e d Tr a n s n e t d i d n o t
w a n t – w a n t e d t o e l i m in a t e t h e r is k n o t t a k e a d v a n ta g e o f u p s i d e a n d
p r o t e c t t h e d o w n s i d e . T h a t is p a r t ia l h e d g i n g .
A D V M A H L A P E S E L L O : O k a y.
M R C H A B I : S o i n t h i s i n s t a n c e it w a s f u ll h e d g e g i v i n g u p t h e u p s id e .
S o i f t h e r a n d d i d w e l l Tr a n s n e t w i ll n o t b e n e fi t f r o m i t . I f t h e r a n d d i d
10

p o o r ly Tr a n s n e t w il l n o t s u ffe r fr o m i t .
A D V M A H L A P E S E L L O : O k a y. T h a n k y o u . T h e n I t h in k w e c a n d e a l
w i t h t h e i n fl a ti o n is s u e .
MR CHABI:

W e a l s o lo o k e d a t t h e in c lu s i o n o f i n fl a ti o n w h ic h is

s y n o n y m o u s w i t h e s c a l a ti o n c o s ts in t h e c a s e o f 3 .6 b il li o n . W e l o o k e d
a t t h e a s s u m p ti o n s a r o u n d i n fl a ti o n o n t h e l o c a l s i d e . T h e a s s u m p t i o n s
a r o u n d in f la t io n o n t h e fo r e i g n s i d e .

We were happy with those

a s s u m p t io n s .
A D V M A H L A P E S E L L O : N o w l e t u s r e m i n d o u r s e lv e s w h y d o w e l o o k
a t b o th lo c a l a n d f o r e i g n .
20

MR CHABI:

B e c a u s e t h e l o c o m o ti v e h a d a f o r e i g n c o m p o n e n t a n d a

lo c a l c o m p o n e n t .
abroad.

I t w o u l d h a v e a c q u i r e d t h e fo r e ig n c o m p o n e n t

S o th a t w o u ld h a v e b e e n s u b j e c t e d t o f o r e i g n e c o n o m ic

c o n d i ti o n s . I n th is i n s t a n c e t h e U n it e d S t a t e s .
A D V M A H L A P E S E L L O : A n d t h e l o c a l c o m p o n e n t w o u l d th e n b e S o u t h
– s u b je c te d to S o u t h A fr ic a n c o n d i t io n s ?

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04 DECEMBER 2019 – DAY 196
M R C H A B I : E c o n o m ic – c o r r e c t.
A D V M A H L A P E S E L L O : O k a y.
M R C H A B I : C o r r e c t . S o y o u h a d t o l o o k a t b o th e c o n o m i e s a n d a l lo w
f o r t h e v a r i a t i o n s i n th o s e e c o n o m i e s o n t h e p r ic e o f t h e lo c o m o t iv e .
ADV MAHLAPE SELLO:

And – and – we have heard from previous

w i t n e s s e s s u c h a s M r C a l la r d a n d M N S w h o c o n d u c t e d a n in v e s t i g a t io n
in t o t h i s tr a n s a c t io n t h a t t h e p r o d u c t i o n o f t h e l o c o m o t iv e s w a s o n
a v e r a g e s p li t a s t o 6 0 % fo r e ig n c o m p o n e n t a n d 4 0 % lo c a l c o m p o n e n t .
B u t e a c h O E M m a n u f a c tu r e r h a d p r o v i d e d t h e ir o w n s p li t b e t w e e n
10

f o r e i g n a n d lo c a l c o m p o n e n t s .
M R C H A B I : O k a y s o t h e r e q u ir e m e n t o n d i e s e l lo c o m o t iv e s w a s 5 5 a s
p e r t h e D e p a r t m e n t o f Tr a d e a n d I n d u s tr y r e q u ir e m e n t s – s o r r y – 5 5
lo c a l c o m p o n e n t s .
A D V M A H L A P E S E L L O : Ye s .
MR CHABI:

Fo r d i e s e l l o c o m o ti v e s a n d 4 0 % m in i m u m 5 5 % h a d t o b e

a c q u ir e d lo c a ll y.
A D V M A H L A P E S E L L O : O k a y.
MR CHABI:
diesel end.
20

S o u r c e d lo c a ll y – m a n u fa c t u r e d lo c a ll y.

That is on the

O n th e e l e c tr ic e n d a m in i m u m o f 6 0 % h a d t o b e

m a n u f a c t u r e d l o c a l ly.
ADV MAHLAPE SELLO:

N o w o n th o s e p e r c e n t a g e s f o r e l e c tr ic a n d

d i e s e l th a t is w h e r e w e w i ll a p p l y t h e S o u th A f r i c a n e c o n o m ic
c o n d i ti o n s ?
M R C H A B I : C o r r e c t.
A D V M A H L A P E S E L L O : Ye s .

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04 DECEMBER 2019 – DAY 196
M R C H A B I : C o r r e c t.
ADV MAHLAPE SELLO:

T h e r e m a i n d e r t h e n w o u ld t h e n b e s o u r c e d

fr o m a b r o a d ?
M R C H A B I : I t w o u l d b e s u b j e c t e d t o f o r e i g n e c o n o m i c c o n d i t io n s .
A D V M A H L A P E S E L L O : O k a y.
M R C H A B I : Ye s .
ADV MAHLAPE SELLO:

S o th e n w o u l d w e b e c o r r e c t i n c o n c lu d i n g

t h a t i n c a l c u l a t i n g i n fl a ti o n g o in g f o r w a r d y o u m u s t b e m i n d f u l o f t h a t
lo c a l f o r e i g n s p l it ?
10

M R C H A B I : Yo u m u s t b e .
ADV MAHLAPE SELLO:

A n d a p p ly th e i n fl a ti o n o f – o n t h e lo c a l

c o m p o n e n t – y o u a p p l y t o t h e lo c a l c o m p o n e n t t h e S o u t h A f r i c a n
in fl a ti o n r a t e s a n d y o u a p p l y t o th e f o r e i g n c o m p o n e n t t h e f o r e i g n r a t e ?
M R C H A B I : T h a t is c o r r e c t .
A D V M A H L A P E S E L L O : O k a y.
MR CHABI:

A n d e a c h O E M w o u l d h a v e p r o v i d e d t h e ir f o r e i g n

c o m p o n e n ts a t t h e t i m e o f t h e n e g o t ia t io n b u t I s u p p o s e w e w il l d e a l
w i t h t h a t a b i t l a t e r.
A D V M A H LA P E S E L L O :
20

O k a y.

So we are happy with the variables

u s i n g th e R 3 8 . 6 b i lli o n v a l i d a t io n e x e r c is e w h e n w e a n a l y s e d t h e
fi n a n c i a l m o d e l . P P I w h ic h is a p r o d u c e r p r ic e i n d e x – p r o d u c e r p r ic e
in fl a ti o n o k a y w a s a p p l i e d l o c a l ly. O n th e f o r e i g n t h e U n it e d S t a te s C P I
w a s a p p l ie d .

I id e a l ly w o u l d h a v e p r e f e r r e d a s m e n ti o n e d l a s t w e e k

P P I t o h a v e b e e n a p p l ie d o n t h a t c o m p o n e n t – o n t h e f o r e i g n
c o m p o n e n t h o w e v e r h a v i n g a n a l y s e d t h e d i ff e r e n c e s b e t w e e n C P I a n d

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04 DECEMBER 2019 – DAY 196
P P I w e fo u n d t h e m to b e v e r y h i g h ly c o r r e la t e d a n d p o s i t iv e l y s o . T h e
d i ff e r e n c e h a s b e e n v e r y m a r g i n a l t o t h e t u n e o f a b o u t 0 . 3 % .

Th e

i m p a c t o n t h e 3 8 . 6 b il li o n w a s a ls o n e g li g i b l e s o w e w e r e h a p p y w i t h
t h e a s s u m p t io n s .
A D V M A H LA P E S E L L O :

O k a y.

S o t h e n it i s o n – o n t h i s b a s i s in t e r

a l ia t h a t y o u m a k e y o u c o n c lu s i o n a t p a g e 6 .
MR CHABI:

C o r r e c t.

S o i n c o n c lu d i n g th e 3 8 . 6 b il li o n a s p e r th e

r e c o m m e n d a ti o n s o f t h e m a n d a t e in c l u d e d f o r e x h e d g in g c o s ts .
t h e y a ll o w e d f o r f o r e ig n c u r r e n c y h e d g i n g c o s ts .
10

e s c a l a t io n c o s t s l o c a l ly a n d a b r o a d .

So

T h e y in c l u d e d

A n d t h e 3 8 . 6 b i ll io n w a s a n

a c c e p ta b l e e s ti m a t e d t o t a l c o s t fo r t h e 1 0 6 4 l o c o m o ti v e s .
A D V M A H L A P E S E L L O : J u s t b r i e f ly t a lk t o u s a b o u t th e r a t e s to – fo r
in fl a ti o n t o b e a p p l ie d w h e r e a c c e p t in g t h a t i n fl a ti o n i s a fo r w a r d
lo o k i n g c a lc u l a ti o n o f in f la t io n . I t is a fo r w a r d l o o k in g e x e r c is e w h e r e –
w e ju s t d o n o t d r e a m u p n u m b e r s t h e y c o m e f r o m s o m e w h e r e .
M R C H A B I : C o r r e c t.
ADV MAHLAPE SELLO:

S o i n o r d e r t h e v a li d a t e fir s tly w h e t h e r

in fl a ti o n w a s a p p li e d a n d w h e t h e r i t w a s a p p li e d a t a c o r r e c t r a t e , w h a t
d o w e h a v e r e g a r d to ?
20

M R C H A B I : O k a y s o id e a l ly y o u w a n t to l o o k a t w h a t i n fl a ti o n h a s b e e n
h is t o r ic a l ly.
A D V M A H L A P E S E L L O : Ye s .
M R C H A B I : A n d t h a t is o n t h e P P I e n d . I f m y r e c o l l e c ti o n s e r v e s m e
r ig h t . I t w a s a b o u t – o n t h e P P I e n d i t w a s a b o u t 3 . 6 % I t h in k o v e r te n
y e a r s a n d a b o u t 5 .4 % o v e r f iv e y e a r s . I w i ll h a v e to c h e c k th a t a g a i n .

Page 16 of 168

04 DECEMBER 2019 – DAY 196
I d o n o t h a v e th e f a c t s a t h a n d . W h a t w a s a p p l ie d i n t h e b u s i n e s s c a s e
w a s a f ig u r e r a n g i n g fr o m 5 . 7 t o a b o u t 5 . 9 . Yo u a ls o w a n t t o l o o k a t
w h a t th e m a r k e t i m p l ie s i n g o i n g f o r w a r d a n d y o u o f te n g e t t h a t fr o m
in s t r u m e n ts o n t h e m a r k e t .

Fl o a ti n g r a t e – s o r r y f lo a ti n g r a t e n o t e s

v e r s u s n o m i n a l b o n d s . A t t h e ti m e w h a t t h e m a r k e t h a d i m p l ie d g o in g
f o r w a r d w a s a b o u t 5 . 7 % . W h a t y o u w o u l d h a v e g o t te n a t th e t i m e o n a
t e n y e a r g o v e r n m e n t b o n d w a s a b o u t 8 % . I t w a s b e tw e e n 8 a n d 9 % . I
t h i n k w h a t y o u w o u ld h a v e g o t t e n o n a fl o a t in g r a te n o t e a t t h e ti m e
w a s a b o u t 2 % t h e r e a b o u ts .
10

I th i n k l o o k i n g a t t h e a v e r a g e o v e r t h a t

m o n th in A p r il w h a t w a s i m p li e d w a s a b o u t 5 .7 % .
A D V M A H LA P E S E L L O : Yo u d o – y o u d o a t p a g e 5 in d ic a t e t h a t b o t h
in d i c e s c a n b e m e a s u r e d a n d c o m p a r e d l o c a l ly a n d t o d o s o w e o b t a i n
o u r i n f o r m a t i o n fr o m S t a ts S A .
MR CHABI:

O n i n fl a t io n c o r r e c t .

Yo u a ls o o b ta in i n fo r m a ti o n f r o m

S t a ts S A a n d S t a ts S A w il l g iv e y o u t h e h i s t o r i c a l i n fl a ti o n r a t e s .
A D V M A H L A P E S E L L O : Ye s .
M R C H A B I : A n d h e n c e my c o m m e n t o n t h e h i s t o r y w h a t i t h a s b e e n in
t h e p a s t b u t B O S S is n o t a lw a y s a g o o d i n d ic a ti o n o f w h a t y o u c a n
expect going forward.
20

S o y o u h a v e g o t t o l o o k a t i n a d d i t io n t o w h a t

t h e m a r k e t [ i n d is ti n c t ] i m p ly p o lic ie s v e r y k e y. W e h a v e g o t o u r o w n
m o n e t a r y p o l ic y c o m m i t t e e h e r e w h ic h – o f w h i c h h a s o n e o f i ts ta r g e ts
t o li m i t i n fl a ti o n b e t w e e n 3 a n d 6 % .
A D V M A H L A P E S E L L O : O k a y.
M R C H A B I : C o r r e c t.
A D V M A H L A P E S E L L O : A n d i n s o f a r a s a n i n t e r n a t io n a l c o m p o n e n t is

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04 DECEMBER 2019 – DAY 196
concerned.
M R C H A B I : Yo u a d o p t t h e s a m e a p p r o a c h . Yo u l o o k a t th o s e .
A D V M A H L A P E S E L L O : A n d w h a t o r g a n is a ti o n s d o w e l o o k f o r f o r – to
o b t a i n t h a t i n fo r m a t i o n s o i n p l a n n in g a p r o j e c t w e c a n a p p ly t h e
c o r r e c t in f la t io n r a te s g o i n g f o r w a r d .
M R C H A B I : W e l l w h e r e v e r y o u c a n o b t a i n i n fl a ti o n d a t a fr o m – o n t h e
U n i te d S t a t e s t h e E U .

Yo u h a v e g o t t h e O E C D .

in fl a ti o n i n f o r m a ti o n , i n f l a t i o n b o th P P I a n d C P I .

OECD produces
I a m g o in g b a c k

h is t o r ic d a t a . P r o v i d e s h is to r ic d a t a o n t h o s e tw o v a r i a b l e s . Yo u h a v e
10

g o t t h e F e d e r a l R e s e r v e B a n k o f S a n L o u is , Fr e d a ls o d o e s t h e s a m e .
Tr a d e E c o n o m ic s .

S o a ll o f t h e s e v a r i o u s s i t e s p r o v i d e y o u w i t h

h is t o r ic a l i n f o r m a t i o n .

We looked at the vast ma jority of them just to

e n s u r e t h a t w h a t w e w e r e g e tt i n g w a s c o n s is te n t a n d i t w a s c o n s is t e n t .
ADV MAHLAPE SELLO:

S o i f – i f – w o u ld I b e c o r r e c t t h e n i n

c o n c l u d i n g th a t if t w o p e o p l e w o r k e d o n th e s a m e p r o j e c t a n d e a c h w a s
t o i n d e p e n d e n tly p r o v i d e f o r in f la t io n g o i n g f o r w a r d b o t h l o c a lly a n d o n
t h e fo r e ig n c o m p o n e n t th e y s h o u l d in a ll p r o b a b i li ty a r r i v e a t th e s a m e
fi g u r e s a s t o w h a t t h e in f la t io n w il l b e b e c a u s e th e y a r e w o r k in g o ff t h e
s a m e b a s e in f o r m a t io n .
20

M R C H A B I : W e ll n o t n e c e s s a r il y t h e s a m e f i g u r e s g o i n g fo r w a r d o k a y
b u t t h e y s h o u l d n o t b e to o f a r a p a r t.

Yo u w o u l d n o t e x p e c t t h e ir

p r o j e c ti o n o f t h e in f la t io n g o in g fo r w a r d to b e t o o f a r a p a r t .
ADV MAHLAPE SELLO:

W h a t i s a n a c c e p t a b l e m a r g i n o f th e

d i ff e r e n c e b e t w e e n t h e t w o ?
MR CHABI: I would say about 0.5% .

Page 18 of 168

04 DECEMBER 2019 – DAY 196
ADV MAHLAPE SELL O : .5% .
M R C H A B I : C o r r e c t.
A D V M A H L A P E S E L L O : S o t h e – w h a t I a r r iv e a t a n d w h a t y o u a r r iv e
– no not I because I could not never but if another accountant or
a c t u a r y w e r e t o a r r iv e a t a f ig u r e f o r in f la t i o n g o i n g f o r w a r d a n d y o u d id
t h e s a m e e x e r c is e y o u w o u ld e x p e c t a m a r g i n o f 0 .5 % d i ff e r e n c e ?
M R C H A B I : D i ff e r e n c e b e t w e e n t h e t w o ja .
A D V M A H L A P E S E L L O : O k a y. T h a n k y o u . S o C h a ir t h a t is w h e r e w e
p a r t e d l a s t w e e k W e d n e s d a y.
10

CHAIRPERSON :

W e l l I m u s t ju s t s a y t h a t I m e a n la s t ti m e w e

s tr u g g l e d f o r s o m e ti m e .
A D V M A H L A P E S E L L O : Ye s .
CHAIRPERSON :

W it h m e h e a r i n g h i s e v id e n c e a n d a t s o m e s t a g e I

w o u ld h e a r h i m q u i t e w e l l a n d I th in k t h a t i s w h e n h e w o u l d s i t a li t tl e
b i t d i s t a n c e fr o m t h e m i c r o p h o n e a n d s o o n .

But then of course he

w o u ld r a i s e h is v o ic e t h e n i t w o u ld b e a u d i b l e , t h e n i t w o u l d g o d o w n .
A D V M A H L A P E S E L L O : Ye s .
CHAIRPERSON :

B u t I s a w a c l ip o n t e l e v i s i o n w h e r e h e w a s g i v i n g

e v i d e n c e a n d li s t e n i n g o n T V h i s e v i d e n c e w a s v e r y a u d i b l e , v e r y c le a r.
20

S o I d o n o t k n o w w h e t h e r th e r e i s s o m e th i n g w it h t h e t e c h n ic a l s t u ff w e
a r e u s i n g t h a t t h o s e w h o a r e w a t c h i n g o n T V w il l h e a r h i m v e r y w e ll a n d
c e r t a i n l y I s o m e ti m e s d o n o t a n d s o m e t i m e s I d o . B u t i t is o k a y w e w i ll
– w e w il l j u s t c o n t i n u e a n d a t le a s t t h e tr a n s c r i p t w ill b e t h e r e .
A D V M A H L A P E S E L L O : Ye s b u t i n lis t e n i n g t o h is s u m - u p C h a ir I w a s
o f th e v i e w t h a t t h e a u d io h a d i m p r o v e d e v e n o n th e – i n t h e r o o m n o t

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04 DECEMBER 2019 – DAY 196
much?
CHAIRPERSON : Well it is not as bad as …
ADV MAHLAPE SELL O : As it was then.
CHAIRPERSON :

I t w a s a t s o m e s t a g e la s t ti m e .

Because it was not

b a d t h r o u g h o u t . T h e r e w e r e t i m e s w h e n i t w a s o k a y. T h e r e w e r e t i m e s
w h e n i t w a s n o t s o o k a y. S o it i s n o t a s b a d a s it w a s a t s o m e s ta g e s o
– s o i t is fi n e I c a n h e a r s o m e t i m e s , s o m e t i m e s I c a n h e a r b u t i t i s
o k a y. W e a r e t w o – w e h a v e g o n e – w e h a v e a d v a n c e d t o o f a r t o tr y
a n y th in g n e w.
10

A D V M A H L A P E S E L L O : A n y t h i n g n e w.
C H A I R P E R S O N : J a l e t u s j u s t c o n t i n u e a n d tr y th e tr ic k s th a t w e w e r e
tr y i n g la s t t i m e .
A D V M A H L A P E S E L L O : Th e n –
C H A I R P E R S O N : O k a y.
A D V M A H L A P E S E L L O : T h e n M r C h a b i i s to b e a r in m i n d t h a t p e r h a p s
– y o u – w a tc h o u t th a t y o u r v o ic e d o e s n o t d i p .
M R C H A B I : O k a y.
A D V M A H L A P E S E L L O : B e c a u s e th e n I t h i n k t h a t is w h e n y o u b e c o m e
m o s t in a u d i b l e .

20

CHAIRPERSON : Ja.
ADV MAHLAPE SELLO:

A n d i f y o u d o s o m e ti m e s a n d I h e a r i t I w il l

s t e p i n a n d r e m i n d y o u t o r a is e y o u r v o ic e .
CHAIRPERSON :

N o th a t – i f it b e c o m e s t o o b a d I w il l te ll y o u a l s o

t h e n w e w i ll s e e b u t …
A D V M A H L A P E S E L L O : H o p e f u l ly i t d o e s n o t g e t b a d C h a ir.

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04 DECEMBER 2019 – DAY 196
C H A I R P E R S O N : J a l e t u s h o p e i t d o e s n o t g e t b a d . O k a y a lr ig h t .
ADV MAHLAPE SELLO:

S o C h a ir th e n – w i th t h a t s u m m a r y o f t h e

e v i d e n c e c o m i n g o u t o f l a s t w e e k w e a r e t e c h n ic a l ly n o w a t p a g e 3 6 o f
M r C h a b i ’s s t a t e m e n t .
CHAIRPERSON : 36?
A D V M A H L A P E S E L L O : 3 6 C h a ir.
C H A I R P E R S O N : J a . O k a y. I w o n d e r w h y y o u s a y te c h n i c a ll y.
A D V M A H L A P E S E L L O : C h a ir ?
C H A I R P E R S O N : I w o n d e r w h y y o u s a y t e c h n ic a l ly. I th o u g h t y o u s a y –
10

y o u s a i d w e a r e t e c h n ic a l ly a t p a g e 3 6 .
ADV MAHLAPE SELLO:

I s a y t e c h n ic a ll y b e c a u s e w e h a d s t a r t e d i t

b u t I a m r e s t a r t i n g i t.
C H A I R P E R S O N : O h o k a y.
A D V M A H LA P E S E L L O :

Ye s .

I n o r d e r f o r th e r e m a i n d e r t o m a k e

s e n s e i t is n e c e s s a r y a g a i n t o r e tr a c e o u r s t e p s .
C H A I R P E R S O N : O k a y n o t h a t is fi n e .
A D V M A H L A P E S E L L O : Th a n k y o u .
CHAIRPERSON :

Th a n k y o u .

ADV MAHLAPE SELLO:
20

Yo u h a v e g o t y o u r s t a t e m e n t w i t h y o u M r

Chabi? BB8B1. Oh you used it as a M R C H A B I : As a p e d e s ta l .
A D V M A H L A P E S E L L O : O k a y. T h e n i f y o u c o u ld j u s t t u r n t o p a g e 3 6
o f t h a t fil e . Fr o m y o u p a r a g r a p h 9 . 4 7 y o u i n p a r t d e a l w i t h t h e o r ig i n a l
E T C o f 3 8 . 6 b i ll i o n r i g h t . Yo u i n tr o d u c e a m e m o r a n d u m – n o b e fo r e I
s a y t h a t l e t m e r e tr a c e m y s t e p s .

J u s t r e m in d u s w h e n w a s t h e 3 8 . 6

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04 DECEMBER 2019 – DAY 196
b i ll io n E T C a p p r o v e d ?
M R C H A B I : To m y r e c o ll e c t io n i t w a s s o m e ti m e in A p r i l .
A D V M A H L A P E S E L L O : O f w h ic h y e a r ?
M R C H A B I : 2 0 1 3 s o r r y.
ADV MAHLAPE SELLO:
2013.

S o th e 3 6 – 3 8 .6 b i ll io n is a p p r o v e d A p r il

W e a r e n o w a c c o r d in g t o y o u r p a r a g r a p h i n 2 0 1 4 b e c a u s e y o u

r e fe r u s t o a m e m o r a n d u m d a t e d 2 3 M a y 2 0 1 4 .
C H A I R P E R S O N : I a m s o r r y. A c c o r d i n g t o w h ic h p a r a g r a p h ?
A D V M A H L A P E S E L L O : 9 . 4 - 7 C h a ir.
10

C H A I R P E R S O N : O h . O k a y.
A D V M A H L A P E S E L L O : A n d t h e n t h a t m e m o r a n d u m is - i s a n n e x e d a s
A C 5 . Yo u c o n fi r m th a t ? M r C h a b i .
M R C H A B I: J u s t c h e c k in g . C o n fir m .
A D V M A H L A P E S E L L O : O k a y.
M R C H A B I: I t is .
ADV MAHLAPE SELLO:

Now your - your AC5 as at page 165 of your

fi le is a d o c u m e n t r u n n i n g in t o s o m e 2 0 p a g e s a n d i t a p p e a r s a t th e
la s t p a g e a t p a g e 1 8 2 t o h a v e b e e n s ig n e d a n d / o r r e c o m m e n d e d b y th e
G r o u p C h i e f Fi n a n c i a l O ff ic e r o f Tr a n s n e t .
20

T F R C h i e f E x e c u t iv e a n d

t h a t i s Tr a n s n e t Fr e ig h t .
C H A I R P E R S O N : D o y o u s a y th a t d o c u m e n t e n d s a t p a g e 1 - 2 - 2 ?
A D V M A H L A P E S E L L O : 1 - 8 - 2 C h a ir.
CHAIRPERSON : 182?
ADV MAHLAPE SELL O: 1-8-2.
CHAIRPERSON : Oh.

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04 DECEMBER 2019 – DAY 196
ADV MAHLAPE SELL O: It runs from …
CHAIRPERSON :

O n t h e s a m e p a g e w h e r e h is s t a te m e n t i s ?

On the

same bundle?
A D V M A H L A P E S E L L O : I n th e s a m e b u n d le .
CHAIRPERSON : Ja. One …
A D V M A H L A P E S E L L O : I t s t a r ts a t 1 - 6 - 5 . It is A C 5 .
C H A I R P E R S O N : It s t a r ts a t 1 6 5 ?
ADV MAHLAPE SELL O: 165 …
CHAIRPERSON : Oh.
10

ADV MAHLAPE SELL O: And it is Annexure AC5.
CHAIRPERSON: Oh.
A D V M A H L A P E S E L L O : I t i s b e fo r e t h e d i v id e r C h a ir.
CHAIRPERSON :

W h y d id I t h in k I w a s h e a r i n g p a g e 8 5 ?

A

memorandum at page 85.
A D V M A H L A P E S E L L O : I a p o lo g i s e . I - I …
C H A I R P E R S O N : O k a y. 1 6 5 g o i n g u p to …
ADV MAHLAPE SELLO:

The

C h a ir

c o n fir m s

that

that

is

the

m e m o r a n d u m . I t i s - i t is o n a Tr a n s n e t l e t t e r h e a d .
C H A I R P E R S O N : Ye s .
20

A D V M A H L A P E S E L L O : Th a t d o c u m e n t r u n s u p t o p a g e 1 - 8 - 2 .
C H A I R P E R S O N : O k a y. T h a n k y o u .
ADV MAHLAPE SELLO:

T h a n k y o u a n d I a m ju s t p o i n ti n g o u t t h a t a t

p a g e 1 - 0 - 2 th a t i t is s i g n e d b y t h e G r o u p - th e th e n G r o u p C h ie f
Fi n a n c i a l O ffi c e r o f Tr a n s n e t . I t i s r e c o m m e n d e d b y h i m . F o l lo w e d b y
t h e T F R C h ie f E x e c u t iv e a n d T F R w o u l d b e Tr a n s n e t Fr e i g h t a n d th e

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04 DECEMBER 2019 – DAY 196
G r o u p C h i e f E x e c u t iv e a n d i t is s i g n e d b y t h e th r e e o f t h e m b e t w e e n
t h e p e r i o d 2 1 M a y a n d th e l a s t s i g n a t u r e is 2 3 M a y 2 0 1 4 .
CHAIRPERSON :

I w a s w o n d e r in g w h y a ll t h e p e o p l e w h o s i g n e d o n

p a g e 1 8 2 w e r e r e c o m m e n d in g a n d t h e r e w a s n o b o d y a p p r o v in g , b u t th a t
is b e c a u s e i t w a s a d d r e s s e d t o t h e B o a r d t o a p p r o v e .
A D V M A H L A P E S E L L O : I n d e e d C h a ir.
CHAIRPERSON : Ja.
A D V M A H L A P E S E L L O : Ye s . In d e e d .
C H A I R P E R S O N : O k a y.
10

ADV MAHLAPE SELLO:

W e h a v e e n c o u n t e r e d t h is m e m o r a n d u m

b e f o r e i n - w i th o th e r w i t n e s s e s C h a ir, b u t w e d id n o t d e a l w i th t h e
fi g u r e s s e t o u t t h e r e in a n d j u s t t o - t o r e m i n d o u r s e lv e s a s - a s
M r C h a b i h a s p o i n t e d o u t t h e 3 8 . 6 b il li o n w a s a p p r o v e d b y t h e Tr a n s n e t
B o a r d i n A p r il 2 0 1 3 .

Fr o m th e n t h e r e w e r e b i d s a n d th e r e w e r e t h e

e v a l u a t i o n s a n d y o u k n o w a l l th e n e c e s s a r y s t e p s t h a t g o w i th p u b l ic
p r o c u r e m e n t a n d i n M a y 2 0 1 4 th is m e m o r a n d u m is g e n e r a te d a n d
p r e s e n t e d t o th e B o a r d .
T h e p u r p o s e o f w h ic h w a s t o s e e k B o a r d a p p r o v a l to in c r e a s e
t h e 3 8 . 6 b ill i o n E T C to 5 4 . 9 b il li o n . M r C h a b i - 5 0 - 5 4 . 5 . I a lw a y s g e t
20

t h e f ig u r e s w r o n g . T h a n k y o u M r C h a b i . M r C h a b i ’s ta s k h e r e w a s t o
t e s t t h e v a li d i ty o f t h a t i n c r e a s e a n d a s h is s ta t e m e n t in d ic a te s h e d o e s
s o w i th r e f e r e n c e t o t h e s a m e m e m o r a n d u m , b e c a u s e t h e m e m o r a n d u m
s e ts o u t t h e b a s i s o n w h ic h t h a t - t h a t in c r e a s e is j u s t if i e d .
H e th e n lo o k s a t t h e v a r i o u s f a c t o r s a d v a n c e d i n s u p p o r t o f
t h a t i n c r e a s e a n d th e n e x p r e s s e s a v i e w o n t h e m a n d t h e b a s is f o r w h y

Page 24 of 168

04 DECEMBER 2019 – DAY 196
h is v i e w i s d i ffe r e n t w h e r e it is d i ff e r e n t.

S o t h a t is w h a t w e w i ll b e

d e a li n g w i t h . A m I c o r r e c tl y s u m m a r is in g w h a t y o u a r e a b o u t t o d o ?
M R C H A B I: T h a t is c o r r e c t .
A D V M A H L A P E S E L L O : Th a n k y o u .
CHAIRPERSON :

And of course what would be important is to see

w h e t h e r t h e i n f o r m a ti o n a n d m o ti v a t io n t h a t w a s p l a c e d b e f o r e t h e
B o a r d is c o r r e c t in f o r m a t io n a n d t h e m o ti v a ti o n w h e t h e r i t is s o u n d a n d
t h e r e w a s n o m is l e a d i n g i n f o r m a ti o n p l a c e d b e f o r e t h e B o a r d .

Th a t -

t h a t w o u ld a ls o b e i m p o r t a n t q u it e a p a r t fr o m a n y i n fo r m a ti o n o r
10

m o t iv a t i o n t h a t m i g h t b e w r o n g b u t b o n a fi d e .
S o o n e w o u ld l o o k f o r w r o n g i n f o r m a ti o n t h a t m ig h t b e p l a c e d
b e f o r e t h e B o a r d w h i c h is n o t b o n a f i d e , b u t m a y b e p l a c e d b e fo r e t h e
B o a r d t o a c h i e v e a n a p p r o v a l in c i r c u ms t a n c e s w h e r e t h e r e s h o u l d b e
n o a p p r o v a l . O k a y.
A D V M A H L A P E S E L L O : Th a n k y o u C h a ir.
CHAIRPERSON: Hm.
ADV MAHLAPE SELLO:

I - I s e e m to r e c a ll t h a t p r e v i o u s ly la s t

W e d n e s d a y y o u h a d t h a t s u m m a r y - t h e t a b l e 1 - t h e e x e c u tiv e
summary as appears at page 1 of that memorandum on - on a screen.
20

Do - was I - was I correct? Am I correct or I have looked at it so often
t h a t I - s o m e t i m e s I a s s u m e t h a t i t i s o n y o u r s c r e e n . W h e n in f a c t i t i s
o n ly i n h a r d c o p y.
M R C H A B I: Is th a t w h a t y o u a r e r e f e r r i n g t o ?
A D V M A H L A P E S E L L O : Ye s . Ye s . Yo u r s li d e 2 4 . C o r r e c t .
M R C H A B I: O k a y.

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A D V M A H L A P E S E L L O : Th a n k y o u .
M R C H A B I: O k a y.
ADV MAHLAPE SELLO:

A n d - a n d w e d i d to u c h o n t h is la s t w e e k

W e d n e s d a y a n d y o u s a i d w h a t w e h a v e o n - o n s l id e 2 4 is b a s ic a ll y
d ir e c t ly e x tr a c te d fr o m p a g e 1 6 5 o f t h e m e m o r a n d u m u n d e r e x e c u t iv e
s u m m a r y.
M R C H A B I: C o r r e c t. T h a n k s a d v o c a t e .
A D V M A H L A P E S E L L O : I f y o u m a y th e n t a k e u s t h r o u g h i t .
M R C H A B I: O k a y. I t h i n k b e f o r e I j u m p in t o t h e ta b le w h ic h is o n p a g e
10

1 o f th e m e m o r a n d u m .
A D V M A H L A P E S E L L O : Ye s .
M R C H A B I:

Th e r e c o m m e n d a ti o n to t h e B o a r d to i n c r e a s e th e E T C

fr o m 3 8 . 6 b i ll io n t o 5 4 .5 b i ll i o n is o n t h e b a s is a n d i n t h is i n s t a n c e I
q u o t e d ir e c tly fr o m p a g e 1 - 8 - 2 o f th e m e m o r a n d u m t h a t :
“ T h e c o s t o f 3 8 . 6 b ill i o n - 0 . 6 b ill i o n - p r e s e n te d t o
t h e B o a r d e x c l u d e d th e c o s t o f h e d g i n g f o r f o r e ig n
exchange movements.

T h e c o s t o f fu t u r e in f la t io n

e s c a l a t io n fo r f o r e i g n e x c h a n g e .”
O h s o r r y.
20

“On

price.

Th e

cost of additional scope

Tr a n s n e t E n g in e e r i n g .

for

The cost of changes in

e c o n o m ic c o n d it i o n s a n d in t h is in s t a n c e f o r e x a n d
in fl a ti o n b e tw e e n t h e a p p r o v a l o f th e b u s i n e s s c a s e
a n d a w a r d o f t h e c o n tr a c t .”
Approval

of

th e

business

case

Page 26 of 168

in

t h is

instance

being

04 DECEMBER 2019 – DAY 196
A p r il 2 0 1 3 a n d a w a r d o f t h e c o n tr a c t b e in g M a r c h 2 0 1 4 .

The point of

t h e e x e r c is e d o n e i n i ti a lly w a s t o s h o w t h a t t h e 3 8 . 6 b il li o n a l lo w e d f o r
a l l o f t h o s e f a c t o r s e x c e p t fo r t h e c o s t o f a d d i ti o n a l T E s c o p e .
w e b r o k e t h e 3 8 .6 b ill i o n .

When

Nowhere in there did we speak about

a d d it i o n a l T E s c o p e .
W e s p o k e a b o u t a l o c a l - l o c a l is a ti o n ( in d is ti n c t) o f tw o
percent.

H o w e v e r w e w e r e i n f o r m e d t h a t t h a t d i d n o t r e la t e t o th e

Tr a n s n e t E n g in e e r i n g s c o p e .
A D V M A H L A P E S E L L O : ( I n d i s t i n c t) .
10

M R C H A B I: S o - s o r r y.
ADV MAHLAPE SELLO:

S o r r y.

B e f o r e w e g o in t o t h a t - s o r r y.

My

a p o lo g i e s . B e f o r e w e g o i n to t h a t d e t a i l l e t u s ta k e i t a s t e p a t a t i m e .
S o r r y. Yo u - y o u s u m m a r is e w h a t t h e m e m o r a n d u m p u ts fo r w a r d a s t o
t h e r a t io n a l e f o r th e in c r e a s e a n d y o u - y o u p o i n t o u t t h a t o n e o f t h e
r a ti o n a le p u t f o r w a r d is t h a t th e 3 8 .6 b i lli o n d i d n o t - d i d n o t p r o v i d e f o r
forex hedging?
M R C H A B I: C o r r e c t.
ADV MAHLAPE SELLO:

O k a y.

Now before we move on.

Can you

e x p r e s s a v i e w o n th a t ?
20

M R C H A B I: I t - i t a ll o w e d fo r f o r e i g n c u r r e n c y.
A D V M A H L A P E S E L L O : Th e 3 8 . 6 ?
M R C H A B I: T h e h e d g in g c o s ts .
A D V M A H L A P E S E L L O : O k a y.
C H A I R P E R S O N : N o w a r e y o u a b l e to s a y h o w t h e y c o u l d s a y i t d i d n o t
a l lo w f o r f o r e x w h e n i t a c t u a l ly - i t d i d ? H o w m u c h r o o m i s th e r e t h a t

Page 27 of 168

04 DECEMBER 2019 – DAY 196
t h e y w e r e ju s t g e n u in e l y m i s ta k e n i n s a y i n g t h a t ?

How much room is

t h e r e t h a t th is w a s d e l i b e r a t e m is l e a d i n g o f th e B o a r d ?
M R C H A B I: O k a y. S o I c a n n o t s a y w h y t h a t r e a s o n w a s a d v a n c e d o r
that view was advanced. However I can put forward a view and I think
w e t o u c h e d o n t h is i n t h e p r e s e n ta t io n la s t w e e k .

I t is r e a s o n a b le t o

q u e s t io n w h e t h e r w h a t w a s a l lo w e d fo r i n t e r m s o f fo r e x w a s f o r e i g n
e x c h a n g e h e d g in g c o s ts o r j u s t a v ie w o n th e e x c h a n g e r a te g o i n g
forward.
I n o th e r w o r d s f o r e c a s t e d r a t e s .
10

I think any reasonable

person would have said well maybe what you saw in the business case
w a s n o t i n r e l a t i o n to h e d g i n g c o s ts , b u t i t w a s ju s t a v i e w o n t h e
exchange rate going forward.

I n t h e s u b m is s io n la s t w e e k - th e

s t a te m e n t l a s t w e e k w e s h o w t h a t t h e c u r v e t h a t w a s u s e d i n m o d e ll in g
t h e E T C w a s a c tu a l ly a f o r w a r d e x c h a n g e c u r v e .
H o w d o w e v e r i fy t h a t?
seven year period.

W e t o o k t h e c a s h fl o w s o v e r th e

A p p r o a c h e d m a r k e t p la y e r s a n d a s k e d t h e m to

p r o v i d e u s w i th a c u r v e a s a t 1 8 A p r il 2 0 1 3 g o i n g fo r w a r d s e v e n y e a r s .
T h a t w a s d o n e a l lo w i n g fo r t w o o f t h e m a j o r b a n k s - t w o m a j o r - w e l l
t w o o f t h e m a j o r b a n k s S o u t h A f r i c a ’s c o s t s t o f a c il i ta t e th e tr a n s a c t i o n .
20

S o t h e c u r v e th a t w e s h o w e d i n r e l a ti o n t o w h a t w a s a p p l ie d
w i t h i n t h e b u s i n e s s c a s e w e r e p r e t ty m u c h in l in e . I th in k t h e r e w e r e
s li g h t d i ffe r e n c e s o f a b o u t 0 .0 3 p e r c e n t t h e r e , b u t y o u w o u l d e x p e c t
t h a t b a s e d o n t h e p r o v id e r o f t h e c o n tr a c t .
ADV MAHLAPE SELLO:

A n d th a t C h a ir w h a t M r - Mr C h a b i h a s j u s t

e x p l a i n e d t o u s is r e fl e c t e d a t s li d e 1 4 w h e n l a s t w e e k h e d i d a

Page 28 of 168

04 DECEMBER 2019 – DAY 196
c o m p a r is o n b e t w e e n t h e r a t e s u s e d b y Tr a n s n e t a n d t h e b u s i n e s s c a s e
f o r 3 8 . 6 b il li o n a n d t o t e s t w h e t h e r t h o s e w e r e a c tu a l fo r e ig n c u r r e n c y
f o r w a r d r a te s .
H e o b ta i n e d th e s a m e r a t e s f o r th a t p e r i o d fr o m B l o o m b e r g
a n d - a n d h e - h e c o m p a r e s th e m a t p a g e 1 4 - a t - a t s li d e 1 4 w h ic h
c u r r e n tly is o n y o u r s c r e e n a n d t h e C h a i r w i ll s e e th a t th e r e is n o t m u c h
d i ff e r e n c e , b u t I g u e s s m o s t i m p o r t a n t ly to t h e C h a ir ’s q u e s ti o n i f I m a y
n o w s e e k M r C h a b i’s c o n f ir m a ti o n .
W o u l d I b e c o r r e c t M r C h a b i a n d - a n d c o n c l u d i n g fr o m y o u r
10

e v i d e n c e o r i f t h e - th e C h a ir w e r e t o p o s e t h a t q u e s t i o n to m e . I s a y I
k n o w t h a t t h e y a r e - th e 3 8 . 6 b il li o n i n c l u d e d f o r e x h e d g i n g , b e c a u s e
t h e fi n a n c i a l m o d e l t e l ls m e s o . W o u ld I b e c o r r e c t i n s a y i n g t h a t?
M R C H A B I: C o r r e c t. Ye s .
ADV MAHLAPE SELLO:

T h e fi n a n c i a l m o d e l o n w h i c h t h e b u s i n e s s

c a s e i s p r e d i c a t e d . I t t e lls m e s o .
M R C H A B I: I t - i t t e lls y o u i t in c l u d e s s o m e s o r t - s o m e fo r m o f fo r e ig n
e x c h a n g e a l l o w a n c e , b u t i t d o e s n o t te ll y o u d ir e c t ly w h e th e r i t w a s a
hedging cost or not.
ADV MAHLAPE SELLO: Oh.
20

M R C H A B I: H e n c e th e c o m p a r i s o n .
ADV MAHLAPE SELLO:

I t is t h e - i t is t h e e x e r c is e t h e r e a ft e r th a t

le a d s u s t o th e c o n c lu s i o n t h a t it is a c tu a l h e d g i n g c o s ts ?
M R C H A B I: C o r r e c t.
ADV MAHLAPE SELLO: And - and …
CHAIRPERSON :

B u t ju s t b e f o r e th a t .

That exercise that you do in

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04 DECEMBER 2019 – DAY 196
o r d e r t o a r r i v e a t t h a t c o n c l u s i o n t h a t i t is in c l u d e d .

Would it be

e x p e c te d - w o u l d it n o t b e e x p e c t e d t h a t a n y b o d y w i t h th e r i g h t
k n o w l e d g e o f t h e s e th i n g s w o u ld d o t h a t e x e r c is e b e fo r e a r r i v i n g a t a a t - a t a n y c o n c l u s i o n t h a t i t w a s n o t in c l u d e d ?
M R C H A B I: I t w o u l d b e e x p e c t e d .
C H A I R P E R S O N : It w o u l d b e e x p e c t e d ?
M R C H A B I: I t w o u l d b e .
C H A I R P E R S O N : A n d i f s u c h a p e r s o n d i d n o t d o th a t e x e r c i s e . W h a t
w o u ld th a t s a y t o y o u a b o u t t h a t p e r s o n e i t h e r in te r ms o f c o m p e t e n c e 10

in c o m p e t e n c e o r l a c k o f d il ig e n c e o r p u r s u i n g a c e r ta i n a g e n d a ?

Yo u

s e e . I - I d o n o t t h e k n o w le d g e t h a t y o u h a v e , b u t y o u h a v e . I f y o u - i f
a l a w y e r g iv e s a n o p i n i o n - a l e g a l o p in i o n a n d I l o o k a t t h e o p i n i o n .
I a m a b le s o m e t i m e t o s a y n o , b u t th is p e r s o n p a r ti c u l a r l y i f
y o u k n o w a b o u t h is o r h e r e x p e r i e n c e i n p r a c t ic e o r t h e fi e l d - r e l e v a n t
fi e l d a n d s o o n . Yo u s a y, b u t t h e r e is n o w a y h e c o u ld h a v e b e l i e v e d
that this opinion is correct.

T h e r e m u s t b e s o m e o th e r a g e n d a a b o u t

t h is o p i n i o n a n d t h e n s o m e b o d y e ls e c o u l d g iv e y o u t h e s a m e o p i n i o n ,
b u t b e c a u s e o f m a y b e li m i t e d e x p e r i e n c e a n d p r a c ti c e .
M a y b e b e c a u s e o f h i s o r h e r u n fa m i li a r i ty w i th th e b r a n c h o f
20

t h e la w y o u m i g h t s a y n o . I t i s j u s t - h e o r s h e i s w r o n g , b u t th e r e is n o
a g e n d a . I t i s b o n a fi d e . Yo u k n o w. S o I a m j u s t m a k i n g th is e x a m p l e s
t o g i v e y o u a n i d e a o f w h a t I a m l o o k i n g f o r. Is i t a s i t u a t io n w h e r e o n e
c o u l d s a y it i s j u s t i n c o m p e te n c e ? Is i t a s i t u a t io n w h e r e y o u s a y n o ,
b u t t h is c a n n o t b e in c o m p e t e n c e ?
W h e n i t i s d o n e b y s o a n d s o w i th s o m u c h e x p e r i e n c e i n

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04 DECEMBER 2019 – DAY 196
t h e s e ty p e o f t h i n g s , b u t o f c o u r s e y o u m i g h t n o t k n o w c e r ta i n
in f o r m a ti o n a b o u t t h e p e o p l e w h o g a v e t h a t o p in io n .

So that - that

m i g h t b e n o t h i n g , b u t I j u s t w a n t t o g iv e y o u a n i d e a o f w h a t I a m
lo o k in g fo r.
M R C H A B I: O k a y.
CHAIRPERSON :

S o i f - i f t h e p e r s o n d i d n o t d o th a t e x e r c i s e w h a t -

what would it tell you about that person?
M R C H A B I:

O k a y.

S o I w o u ld n o t w a n t t o s p e a k t o th e c h a r a c t e r o f

in d i v i d u a ls I s u p p o s e , b e c a u s e I d o n o t k n o w t h e s e i n d iv i d u a ls .
10

C H A I R P E R S O N : Ye s .
M R C H A B I:

I g u e s s y o u w o u l d r e q u ir e a lo t m o r e th a n j u s t t h is

fi n a n c i a l in v e s ti g a t io n …
C H A I R P E R S O N : Ye s .
M R C H A B I: A n d I th i n k i t w o u l d h a v e t o f a ll i n to w h a t M N S …
C H A I R P E R S O N : Ye s .
M R C H A B I: H a s u n e a r t h e d .
C H A I R P E R S O N : Ye s .
M R C H A B I: F o u n d o u t w h o c o m e a t a …
CHAIRPERSON : Hm.
20

M R C H A B I:

A r e a s o n a b l e v ie w a b o u t th e i n d iv i d u a l s , b u t a n y o f t h e

r e a s o n s y o u h a v e a d v a n c e d a r e q u i te p o s s i b l e .
n e g li g e n c e .
CHAIRPERSON : Ja.
M R C H A B I: I t c o u ld b e l a c k o f c o m p e t e n c e …
C H A I R P E R S O N : J a . O k a y. Yo u …

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S o i t c o u ld b e

04 DECEMBER 2019 – DAY 196
M R C H A B I: O r it c o u l d b e …
CHAIRPERSON : Hm.
M R C H A B I: W il f u l d e s ir e to m is l e a d …
C H A I R P E R S O N : H m . O k a y.
ADV MAHLAPE SELLO:
M R C H A B I: B u t w h ic h o f th e th r e e i t i s .
C H A I R P E R S O N : Ye s .
M R C H A B I: I c a n n o t w it h …
C H A I R P E R S O N : Yo u m ig h t n o t h a v e e n o u g h in f o r m a t io n to …
10

M R C H A B I: I d o n o t .
C H A I R P E R S O N : G o b e y o n d t h a t . J a . O k a y.
A D V M A H L A P E S E L L O : I f I m a y c o m p l ic a t e y o u r l if e f u r t h e r M r C h a b i .
I n y o u r f il e y o u h a v e A n n e x u r e A C 4 a t p a g e 1 - 6 - 3 w h ic h i s a w o r k s h e e t
fr o m th e - t h e b u s in e s s - fr o m th e fi n a n c i a l m o d e l ti tl e d p r o p o s e d l o c o s
p u r c h a s e p r ic e - p u r c h a s e p r i c e . N o w i f - i f o n e w e r e to a p p r e c i a t e th a t
t h e b u s i n e s s c a s e is p r e d i c a t e d o n t h e f i n a n c i a l m o d e l .

T h e n i n - in

s o r t o f t e s t in g th e a c c u r a c y o f 3 8 . 6 b i ll io n y o u g o to t h e f in a n c ia l
model. Correct?
M R C H A B I: C o r r e c t.
20

A D V M A H L A P E S E L L O : A n d i f y o u g o t o t h e fi n a n c i a l m o d e l y o u c o m e
across this worksheet at page 163.
M R C H A B I: C o r r e c t.
ADV MAHLAPE SELLO:

P o i n t o n e t o b e p r e c is e .

1 - 6 - 3 .1 f o r t h e

r e c o r d a n d w h e n I l o o k a t th a t e x c e l s p r e a d s h e e t a n d I r e a d fr o m th e
e x tr e m e le f t a t e n t r y - e n tr y t h r e e i t h a s g o t f o r e x s h i f t a n d i f I w o r k -

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04 DECEMBER 2019 – DAY 196
w o r k m y w a y a c r o s s t h e e n t ir e d o c u m e n t o v e r to 2 0 2 3 .

There are

c e r t a i n r a t e s a p p e a r i n g th e r e p e r a n n u m w h ic h i f I u n d e r s to o d y o u r
e v i d e n c e c o r r e c tl y l a s t w e e k r e fl e c t e d th e f o r e i g n e x c h a n g e r a t e s g o i n g
f o r w a r d . Wa s I c o r r e c t ?
M R C H A B I: T h a t is c o r r e c t . G l o b a l i n s ig h t r o l e .
A D V M A H L A P E S E L L O : Ye s .
M R C H A B I: T h e r o le t it l e d g l o b a l i n s ig h t .
A D V M A H L A P E S E L L O : Ye s . Ti t l e d g l o b a l in s i g h t .
M R C H A B I: C o r r e c t.
10

A D V M A H L A P E S E L L O : S o t h e r e is - w e ll I a m n o t s a y i n g f o r a la w y e r,
b u t w o u l d i t b e r e a s o n a b l e to e x p e c t it t o b e a s i m p l e e x e r c i s e f o r a n
a c c o u n t a n t - t h e m o s t ju n io r a c c o u n t a n t?

O k a y.

For an accountant

period.
M R C H A B I: I w o u l d s a y i t i s .
A D V M A H L A P E S E L L O : O k a y.
C H A I R P E R S O N : D o e s - d o e s th e v i e w t h a t - i t is t h e fo r e ig n - f o r e i g n
e x c h a n g e h e d g i n g - w h a t w a s - t h a t w a s n o t - t h a t t h e o p i n i o n w a s th a t
it w a s n o t i n c lu d e … ( in t e r v e n e s ) .
M R C H A B I: I t is f o r e i g n h e d g i n g c o s ts .
20

C H A I R P E R S O N : J a . W h e n y o u s e e - w h e n y o u s a w th a t v i e w h a v i n g
regard to what was placed before the Board and maybe what the person
h a d a c c e s s t o in f o r m i n g t h a t v i e w. W h a t t h e y w o u ld h a v e h a d to l o o k
a t i n f o r m i n g t h a t v i e w.

D o e s - w a s y o u r r e a c t io n t h i s is s h o c k i n g ?

H o w c o u l d th e y s a y th a t o r w a s i t - i t i s w r o n g , b u t o k a y o r n o n e o f t h e
above?

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04 DECEMBER 2019 – DAY 196
M R C H A B I: I g u e s s - n o t a g u e s s . T h e ( i n d is ti n c t ) w a s a b it s h o c k i n g .
C H A I R P E R S O N : It w a s s h o c k in g .
M R C H A B I: I w o u l d s u g g e s t i t w a s .
C H A I R P E R S O N : Ye s . O k a y. T h a t h e l p s m e . T h a n k y o u .
A D V M A H L A P E S E L L O : O k a y. T h e n i f - i f w e - s o n o w y o u - y o u h a v e
e x p r e s s e d a n o p in i o n o n w h e t h e r o r n o t t h e f o r e x h e d g i n g w a s
in c l u d e d .

G o in g b a c k w h ic h is a f e w m in u te s b a c k .

Yo u a ls o s a i d t o

t h e C h a ir t h a t t h e m e m o r a n d u m s u g g e s t e d th a t i n fl a ti o n w a s a ls o n o t
c a t e r e d f o r i n 3 8 .6 b i ll i o n ?
10

M R C H A B I: C o r r e c t.
ADV MAHLAPE SELLO:

O k a y. N o w w h a t - w h a t - c a n y o u e x p r e s s a

v ie w o n t h a t c l a i m i n t h e m e m o r a n d u m ?
M R C H A B I:
e x e r c is e s .

W e ll t h e v e r i fic a ti o n s a r e in my v ie w v e r y s i m p le
F o r fi n a n c i a l p e o p l e i t is n o t a v e r y c o m p l e x th in g to d o .

E x c e l is a v e r y b a s ic p l a tf o r m f o r m o d e l li n g .
A D V M A H L A P E S E L L O : Ye s .
M R C H A B I: Yo u w i ll n o t e x p e c t it t o p o s e a n y c h a l le n g e t o a n y b o d y i n
t h e f i n a n c ia l s e r v ic e s i n d u s t r y. S o i t w a s e q u a lly s h o c k i n g t o s e e th e
n o t e a b o u t e s c a la t io n n o t h a v i n g b e e n in c l u d e d e s p e c i a ll y g iv e n t h a t w e
20

h a v e a p o li c y in p l a c e t h a t r e q u ir e s y o u to a p p r o p r i a t e ly a ll o w f o r t h e s e
c o s ts b e fo r e b u d g e t in g .
A D V M A H L A P E S E L L O : A n d - a n d a g a i n I a m h a v i n g r e g a r d to y o u r t h e e x c e l s p r e a d s h e e t - t h e w o r k s h e e t . A t p a g e 1 - 6 - 3 . 1 w h ic h is th e t h e s p r e a d s h e e t w e l o o k e d a t j u s t a s h o r t w h il e a g o w h e n tr y i n g t o
determine

whether

or

not forex

hedging

Page 34 of 168

costs

were

ta k e n

i n to

04 DECEMBER 2019 – DAY 196
c o n s i d e r a ti o n a n d t h e la s t e n tr y o n t h a t v e r y s a m e p a g e t e lls m e a b o u t
S A P P I a n d U S in f la t io n .
M R C H A B I: C o r r e c t.
A D V M A H L A P E S E L L O : I s t h a t n o t t h e e s c a l a ti o n r a t e s ?
M R C H A B I: T h a t is - th o s e a r e t h e e s c a l a t io n r a t e s .
ADV MAHLAPE SELLO:

S o t h e o n e d o c u m e n t w o u ld h a v e t o l d m e

a b o u t f o r e x a n d t o l d m e a b o u t i n fl a ti o n . W h e t h e r o r n o t i t w a s p a r t o f
t h e 3 8 . 6 b i lli o n ?
M R C H A B I: C o r r e c t.
10

A D V M A H L A P E S E L L O : O k a y. T h e n i f - i f y o u c o u ld ta k e u s t h e n t o t o y o u r t a b l e o n th e s c r e e n .

T h a t w e h a d o n t h e s c r e e n p r e v io u s ly

b e f o r e w e d e a l t w i t h th is d e t a il .

Ye s .

T h is o n e .

N o w th a t t a b le j u s t

s u m m a r i s e s t h e g l o b u la r f ig u r e s th a t h a v e b e e n i n tr o d u c e d a n d w h ic h
fi g u r e s it is c l a i m e d a r e r e s p o n s i b l e f o r t h e i n c r e a s e o f 1 5 .9 b il li o n i n
ETC. Correct?
M R C H A B I: C o r r e c t.
A D V M A H L A P E S E L L O : C a n y o u q u i c k ly t a k e u s t h r o u g h t h e m ? S o w e
u n d e r s t a n d w h a t i s h a p p e n i n g t h e r e . L e t u s d e a l w i th t h e f ir s t .
M R C H A B I:
20

O k a y.

S o t h e r e a s o n s a d v a n c e d f o r t h e in c r e a s e i n E T C

fr o m 3 8 . 6 b i ll io n t o 5 4 b i ll i o n h o w i t i s s h o w n o v e r h e a d .

S t a r t i n g o ff

w i t h a n u p d a t e o f b u s in e s s c a s e fo r u p d a t e d e c o n o m ic f a c to r s . T h e s e
a r e e s s e n t ia ll y b a c k w a r d lo o k in g a d j u s t m e n t c o s t s .

So because the

p r i c e is p r o v i d e d a s a t A p r il 2 0 1 3 b y t h e s e O E M s a n d th e n e g o ti a ti o n s
w e r e t a k i n g p l a c e - p la c e a s a t M a r c h 2 0 1 4 .
T h e r e w a s a n e e d t o a d ju s t t h o s e p r ic e s t o r e f le c t t h e v a l u e

Page 35 of 168

04 DECEMBER 2019 – DAY 196
a s a t t h e n e g o t ia t io n s t a g e . S o y o u h a d t o e s c a l a t e b y i n fl a ti o n . Yo u
h a d to a l l o w f o r e x c h a n g e r a t e f l u c t u a t io n s o v e r t h e s a m e p e r io d j u s t t o
b r i n g t h e v a l u e t o p r e s e n t t e r m s a n d p r e s e n t i n t h is i n s t a n c e b e i n g
M a r c h 2 0 1 4 . S o t h o s e a r e t h e f a c to r s r e fe r r e d t o t h e r e a s a n u p d a te .
ADV MAHLAPE SELLO:

S o b a s i c a ll y w h e r e - 3 8 .6 b i ll io n w a s a s a t

A p r il 2 0 1 8 ? A g - 2 0 1 3 ?
M R C H A B I: 2 0 1 3 . C o r r e c t .
A D V M A H L A P E S E L L O : My a p o l o g i e s . I d o n o t k n o w w h e r e I g e t 1 8 .
The memorandum there dated May 2014 says:
10

“ Yo u c a n n o t l o o k a t t h e e c o n o m ic f a c t o r s a s t h e y
w e r e in A p r il 2 0 1 3 .

We must bring them forward

t o d a y.”
A n d th a t 3 8 . 6 b i lli o n o u g h t t o b e a m e n d e d t o t a k e in t o c o n s i d e r a t i o n t h e
c h a n g e d e c o n o m i c c i r c u ms t a n c e s . A m I c o r r e c t ?
M R C H A B I: C o r r e c t.
ADV MAHLAPE SELLO:

So

b a s i c a ll y

it

is

-

it

is

e c o n o m ic

c ir c u m s ta n c e s o v e r a p e r i o d o f o n e y e a r ?
M R C H A B I: T h a t is c o r r e c t .
A D V M A H L A P E S E L L O : Th a n k y o u . Yo u m a y p r o c e e d .
20

M R C H A B I:

O k a y.

S o th a t c o s t a m o u n t e d t o 5 .4 b il li o n a s p e r t h e

m e m o r a n d u m . T h e … ( i n te r v e n e s ) .
ADV MAHLAPE SELLO:

B e f o r e y o u g o f u r th e r w h a t - w h a t w o u l d -

w h a t g o e s in t o t h e e c o n o m ic fa c to r s ?
M R C H A B I: S o y o u h a v e …
A D V M A H L A P E S E L L O : Th a t w e s h o u l d c o n s i d e r h e r e .

Page 36 of 168

04 DECEMBER 2019 – DAY 196
M R C H A B I: B a s ic a l ly i t i s j u s t e x c h a n g e r a te fl u c t u a t i o n s .
A D V M A H L A P E S E L L O : E x c h a n g e r a t e fl u c t u a t i o n s a n d w h a t ?
M R C H A B I: A n d e s c a la t io n - p r i c e e s c a la t io n /i n fl a ti o n .
ADV MAHLAPE SELLO:

T h e n w o u ld I b e c o r r e c t w h e n I l o o k a t y o u r

u p d a te o f b u s i n e s s c a s e fo r u p d a t e d e c o n o m ic f a c t o r s a t 5 . 4 b i ll i o n t o
in t e r p r e t th a t t o m e a n s i n c e A p r il 2 0 1 3 t o M a y 2 0 1 4 t h e r e a r e c e r t a i n
f a c to r s w e s h o u l d t a k e i n to c o n s i d e r a ti o n . T h a t t h e 3 8 . 6 b i lli o n d i d n o t
a n d th e - t h e c o s t o f t h a t is 5 .4 b i ll io n ?
M R C H A B I: T h a t is c o r r e c t .
10

ADV MAHLAPE SELLO:

S o t h e c o s t fo r f o r e x h e d g in g i n fa c t w a s o r

t h e - t h e n w o u ld b e t h e c h a n g e i n f o r e x f l u c t u a t io n a n d t h e e s c a la t io n
h a v e a d d e d a c o s t o f 5 . 4 b il li o n . W o u l d t h a t b e a c o r r e c t s u m m a t i o n ?
M R C H A B I: S o r r y. I th in k I ju s t m i s s e d t h e p o i n t a d v o c a t e .
A D V M A H L A P E S E L L O : T h e p o i n t i s I r e a d t h a t - w o u l d I - w o u ld w e
b e c o r r e c t i n i n t e r p r e t in g th a t t o m e a n t h e m e m o r a n d u m s u g g e s t s t h a t
s in c e A p r il 2 0 1 3 to d a t e b e in g M a y 2 0 1 4 …
M R C H A B I: M a r c h 2 0 1 4 .
ADV MAHLAPE SELL O: March 2014.
M R C H A B I: A p r i l 2 0 1 3 t o M a r c h 2 0 1 4 .
20

A D V M A H L A P E S E L L O : M a r c h 2 0 1 4 . O k a y.
M R C H A B I: 1 7 M a r c h 2 0 1 4 t h e r e a b o u t.
A D V M A H L A P E S E L L O : B u t t h e m e m o r a n d u m a s in M a y 2 0 1 4 s u g g e s t
…
M R C H A B I: O k a y.
A D V M A H L A P E S E L L O : Th is is w h a t h a d h a p p e n e d o v e r t h a t p e r io d o f

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04 DECEMBER 2019 – DAY 196
ti m e w h i c h is t h a t t h e r e w a s c e r t a in - I w il l c a l l t h e m c e r t a i n - c u r r e n c y
fl u c t u a t i o n s …
M R C H A B I: J a .
ADV MAHLAPE SELLO:

W h ic h y o u m u s t a d d to t h e - a n d t h e r e w a s

e s c a l a t io n …
M R C H A B I: T h a t is c o r r e c t . Ye s .
A D V M A H L A P E S E L L O : C o s ts .
M R C H A B I: C o r r e c t.
A D V M A H L A P E S E L L O : A n d th o s e c o s ts c o m b in e d o v e r a p e r i o d o f a
10

y e a r a r e 5 .4 b i ll i o n ?
M R C H A B I: T h a t is c o r r e c t .
A D V M A H L A P E S E L L O : O k a y. W e - w e u n d e r s t a n d y o u .
M R C H A B I:
m i ti g a ti o n .

A n d th e m e m o r a n d u m t h e n a d v a n c e s a c o s t fo r r is k
It is b a s ic a l ly th e s a m e v a r ia b l e s .

Yo u l o o k a t e s c a l a ti o n

c o s ts g o in g f o r w a r d fr o m M a r c h 2 0 1 4 t o t h e e n d o f t h e d e li v e r y
schedule.

I t i s i m p o r t a n t t o n o te th a t t h e d e li v e r y s c h e d u l e i n t h i s

in s t a n c e c h a n g e d fr o m s e v e n y e a r s t o t h r e e t o f o u r y e a r s . O k a y. W i t h
t h e la s t d e l iv e r y I t h in k e x p e c t e d in F e b r u a r y 2 0 1 8 . A t t h e t i m e .
A D V M A H L A P E S E L L O : O k a y.
20

M R C H A B I: S o it w a s a m a x i m u m d e li v e r y p e r io d o f fo u r y e a r s . S o th e
d e li v e r y s c h e d u le w a s s h r u n k . S o t h o s e c o s ts - s o t h e n y o u w o u l d h a v e
h e d g i n g c o s ts fr o m M a r c h 2 0 1 4 a ll t h e w a y to t h e l a s t d e li v e r y - o f
lo c o m o t i v e d e li v e r y a n d y o u w o u l d a ls o h a v e in f la t io n c o s ts a l l t h e w a y
t o th a t la s t l o c o m o ti v e d e liv e r y. T h o s e c o s ts a s p e r t h e m e m o r a n d u m
a m o u n t e d t o 9 . 5 - 9 . 5 b i ll io n . 9 . 4 5 t o b e e x a c t . J a .

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04 DECEMBER 2019 – DAY 196
ADV MAHLAPE SELLO:

S o i t w o u l d b e 9 . 5 b il li o n o v e r a fo u r y e a r

period?
M R C H A B I: T h a t is c o r r e c t .
A D V M A H L A P E S E L L O : O k a y. W h e r e a s t h e f o r e x a n d e s c a l a ti o n c o s t
in t h e 3 8 . 6 b i lli o n w a s o v e r a s e v e n y e a r p e r i o d ?
M R C H A B I: T h a t is c o r r e c t .
A D V M A H L A P E S E L L O : R i g h t. T h e n th e r e is a n e x t f a c t o r w h ic h is T E
scope.
M R C H A B I:
10

T h a t c a m e i n a t 2 . 6 b il li o n a n d t h a t i n c l u d e d t h e o r ig i n a l

T E s c o p e a n d t h e a d d i t io n a l T E s c o p e .

I t h i n k w e w il l l o o k a t t h a t

b r e a k d o w n w h e n w e g e t t o t a b l e t w o w h e r e t h e b u il d u p to 4 . 5 b il li o n i s
la id o u t .
ADV MAHLAPE SELLO:

S o t h is e x tr a T E s c o p e is a s fu r t h e r c o s t o f

2 .5 9 b il li o n o r is th a t th e c o s t o f t h e T E s c o p e i t s e l f?
M R C H A B I: I m is s e d t h e q u e s ti o n a d v o c a t e .
A D V M A H L A P E S E L L O : I s a id t h e y T E s c o p e c o s t e d t h e r e a t tw o …
M R C H A B I: 2 . 6 b i ll io n .
ADV MAHLAPE SELLO:

2 .6 b i lli o n .

Is t h a t a d d i t io n a l T E s c o p e n o r

g e n e r a l ly a ll t h e T E s c o p e ?
20

M R C H A B I: I t is t h e c o m b in a ti o n o f t h e o r i g i n a l T E s c o p e a n d …
A D V M A H L A P E S E L L O : Th e a d d i t io n a l .
M R C H A B I: T h e a d d i ti o n a l T E s c o p e .
A D V M A H L A P E S E L L O : A lr ig h t . T h e n w e g e t t o c o n ti n g e n c i e s …
M R C H A B I: C o r r e c t a n d …
ADV MAHLAPE SELLO:

A n d t h a t a s w e u n d e r s t a n d it is ju s t a - a n

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04 DECEMBER 2019 – DAY 196
a r i t h m e ti c e x e r c i s e ?
M R C H A B I:

Correct.

I t w a s 1 0 p e r c e n t o f t h e o v e r a l l c o s ts o f 4 9 .5

b i ll io n .
A D V M A H L A P E S E L L O : W e t h e n h a v e a n e g a tiv e fi g u r e o f 6 . 5 b i lli o n
on that table.
M R C H A B I: A n d t h a t is …
A D V M A H L A P E S E L L O : C a n y o u e x p l a in t o th e C h a ir w h a t - w h a t t h a t
is s u p p o s e d t o b e ?
M R C H A B I: W e ll …
10

A D V M A H L A P E S E L L O : L e t u s f ir s t r e a d w h a t i t s a y s …
M R C H A B I: C o r r e c t.
ADV MAHLAPE SELL O: On the table.
M R C H A B I:

S o t h e m e m o r a n d u m a t tr i b u t e s a R 6 .5 b il li o n s a v i n g t o

lo w e r c a p it a l a c q u is i ti o n c o s ts o f t h e l o c o m o t iv e o b t a i n e d t h r o u g h a
c o m p e ti t iv e t e n d e r a n d n e g o t ia t io n p r o c e s s .

I t a c t u a ll y s a y s le s s t h e

b e n c h p r i c i n g a d j u s t m e n t o f 2 .7 b i ll io n .
ADV MAHLAPE SELLO: Hm.
C H A I R P E R S O N : I a m s o r r y. I s t h a t l in e s u p p o s e d t o s a y t h e fa c t t h a t
t h e r e w a s a t e n d e r p r o c e s s i n v o l v i n g d i ff e r e n t le a d e r s a n d t h e
20

n e g o ti a ti o n p r o c e s s t h a t c a m e a ft e r t h a t r e s u l t e d in Tr a n s n e t s a v i n g
t h a t a m o u n t ? Is t h a t w h a t th a t li n e is s u p p o s e d to s a y ? Is th a t w h a t it
means?
M R C H A B I: T h a t is h o w w e in t e r p r e t i t.
C H A I R P E R S O N : Ye s . O k a y.
A D V M A H L A P E S E L L O : I t s e e m s t o b e w r it t e n i n a f a ir l y c o m p l e x w a y

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04 DECEMBER 2019 – DAY 196
a n d I’ m g o i n g t o t r y a n d in t e r p r e t i t, a t l e a s t f o r my s e l f a n d I w a n t t o
t e s t w h e th e r y o u g e t th e s a m e r e s u l t . I t w o u ld a p p e a r to s u g g e s t t h a t
t h e r e w a s a n o v e r R 9 b i lli o n s a v i n g s a c h i e v e d t o w h i c h m u s t t h e n b e
d e d u c t e d , t h e n e w c o s t c a l le d b a tc h p r i c in g o f R 2 .7 b i ll i o n , is th a t a
c o r r e c t in t e r p r e t a ti o n ?
MR CHABI:

I would say it is yes.

ADV MAHLAPE SELLO:

S o t h e n e t e ff e c t o f th e s a v in g b e c o m e s

R 6 . 5 b i ll io n ?
MR CHABI:
10

Correct.

ADV MAHLAPE SELLO:

Which would suggest had it not been

n e c e s s a r y t o a d d t h e b a t c h p r ic in g a t R 2 . 7 b i ll io n t h e a c tu a l s a v i n g
w o u ld b e o v e r R 9 b il li o n ?
MR CHABI:

W e l l if y o u a c c o u n t f o r b a tc h p r i c i n g th e a c t u a l s a v i n g is

R 9 . 2 b i ll io n .
ADV MAHLAPE SELLO:
MR CHABI:

R 9 . 2 b i ll io n ?

Correct.

ADV MAHLAPE SELLO:
CHAIRPERSON :

O k a y, a l r i g h t .

S o I m a y h a v e m is s e d s o m e t h i n g a n d i t ’s b e e n – w e

h a v e b e e n l is t e n in g to t h i s in p i e c e m e a l, i f y o u s a y t h e r e w a s a s a v i n g
20

of

R 6 .5 b il li o n

that

s u g g e s ts

th a t

th e r e

had

p r e v i o u s ly

been

a

d e t e r m i n a t io n o r e s ti m a t io n th a t w a s h ig h e r fo r t h e p r o je c t o r f o r t h e
p a r t ic u l a r it e m b u t s o m e th in g h a s h a p p e n e d a n d a s a r e s u l t o f t h a t th e
a m o u n t h a s g o n e lo w s o y o u ’r e n o lo n g e r g o i n g t o s p e n d a s m u c h a s
y o u h a d a n ti c i p a t e d , is m y u n d e r s ta n d i n g c o r r e c t ?
MR CHABI:

T h a t is c o r r e c t C h a ir.

Page 41 of 168

04 DECEMBER 2019 – DAY 196
CHAIRPERSON :

B u t h o w w o u ld t h a t i n it i a l d e te r m i n a ti o n o r e s ti m a t io n

b e m a d e f o r it t o r e s u l t i n s a y i n g a s a v i n g b e c a u s e o f t h e c o m p e ti ti v e
t e n d e r p r o c e s s . M a y b e t h e n e g o ti a ti o n s , I c a n u n d e r s t a n d b e c a u s e t h e
c o m p e ti t iv e t e n d e r p r o c e s s w o u l d i n v o lv e ju s t d i ff e r e n t b id d e r s p u tt i n g
in t h e ir b i d s n o t k n o w i n g w h a t th e o th e r o n e ’s p r ic e s a r e , d o y o u
understand that part?
MR CHABI:

I d o n o t C h a ir.

CHAIRPERSON :

J a , I m e a n i f – w i t h r e g a r d to n e g o ti a ti o n , i f y o u h a d

m a d e a c e r t a i n d e t e r m i n a ti o n o r e s ti m a t i o n a n d y o u n e g o ti a t e d , y o u
10

b r i n g th e p e o p l e d o w n th a t p a r t I c a n I c a n [ in d is ti n c t ] te n d e r e ff e c t –
p r o c e s s e ffe c t t h a t I ’ m n o t s u r e i f I u n d e r s t a n d , a r e y o u a b le t o a s s i s t .
M R C H A B I : Ye s , I s a y y e s C h a ir a n d I’ ll d o s o in p a r t w i t h r e f e r e n c e t o
t h e e v id e n c e t h a t h a s a l r e a d y b e e n d e d u c e d a n d t h e n I a s k e d Mr C h a b i,
b a s e d o n t h e w o r k h e ’s d o n e t o c o m m e n t .
CHAIRPERSON :

Mmm.

ADV MAHLAPE SELLO:

W e k n o w th a t t h e b id s w e r e s u b m i tt e d a n d

e a c h b i d h a d a p r ic e – h a d a l o c o m o t iv e p r ic e a n d la s t w e e k th e y C h a ir,
I t h i n k , e n q u i r e d o f M r C h a b i i f th e y w e r e o n t h e s h e lv e s , t h e s e
lo c o m o t iv e s a n d w h e r e t o b e b o u g h t t h a t d a y w h a t w o u l d th e p r ic e b e
20

a n d t h a t ’s w h a t , y o u k n o w, w e ’ d c a ll t h e p r ic e a s a t t h a t d a y. S o e a c h
o f t h e d i d i n d ic a ti n g th e l o c o m o t iv e p r i c e s e p a r a t e fr o m a l l o t h e r
a d j u s t m e n t s t h a t m u s t b e e ff e c te d .

S o t h a t w a s o n t h e b i d s a n d th e

fir s t q u a r t e r o f 2 0 1 4 , n e g o t i a t i o n s b e g a n w it h s u c c e s s f u l b i d d e r s a n d i n
t h e c o u r s e o f – b e fo r e t h e n e g o ti a ti o n s th e y w e r e r e q u e s t e d – b e c a u s e
w e ’r e a l m o s t a y e a r l a te r to s u b m i t t h e ir r e s p e c tiv e b e s t a n d f in a l

Page 42 of 168

04 DECEMBER 2019 – DAY 196
o ffe r s .

S o l e t ’s s a y w h e n t h e b i d s c a m e i n t h e y c a m e a t a c e r t a i n

fi g u r e o f 3 0 a n d th e ir b e s t a n d fi n a l o ffe r t h e n it m i g h t b e 2 9 . T h e n t h e
n e g o ti a ti o n s ta r t s a n d t h e r e ’s h a g g li n g o v e r th e p r i c e a n d t h e n
e v e n t u a l ly Tr a n s n e t a n d e a c h p a r t y r e a c h a n a g r e e m e n t a s to p r ic e a n d
m a y b e th a t’s 2 5 . S o t h a t ’s t h e e v id e n c e t h a t w e ’v e u n d e r s t o o d to h a v e
b e e n le d .

C o m p a r e d t o t h a t w o u ld b e w h a t t h e b u s i n e s s c a s e

a n t ic i p a te d t h e lo c o m o t iv e p r ic e to b e , s o fo r b u d g e ti n g p u r p o s e s a n d
d e t e r m i n i n g w h e th e r o r n o t w e a r e u n d e r t a k e n t h i s p r o je c t, w h a t d o w e
e x p e c t th a t p r ic e t o b e a n d I ju s t w a n t t o c h e c k t h a t I a m c o r r e c t w i t h ,
10

y o u k n o w, M r C h a b i .
MR CHABI:

I agree.

ADV MAHLAPE SELLO:

T h e n i f y o u c o u l d t a k e u s t o y o u r s li d e 2 1

b e c a u s e t h e s li d e 2 1 i s g o i n g t o h e l p u s u n d e r s t a n d , h o p e f u l ly, w h e r e
e x a c tl y i t is w e o b ta i n e d th e s a v in g o f R 6 . 5 b il li o n , g o o n s ti ll , y e s th is
o n e . T h e C h a ir w i ll s e e a t th e t o p r o w o f t h a t s l id e it s l o c o m o t iv e p r ic e
it i n d ic a te s w h a t t h e b u s in e s s c a s e p r ic e w a s w h ic h is ju s t s l i g h t ly o v e r
R 3 0 b i ll io n a n d i t s a y s t h e m e m o p o i n te d t o a t R 2 9 .3 5 5 b il li o n a n d t h e
a s s e s s e d v a l u e , a s s e s s e d v a l u e b e i n g w h a t Mr C h a b i a s s e s s e d .
MR CHABI:
20

C o r r e c t i t w a s o r i g in a l ly R 2 9 . 5 3 b il li o n b a s e d o n t h e

J a n u a r y 2 0 1 4 [i n d i s t i n c t ].
ADV MAHLAPE SELLO:

S o w e ta k e t h e R 3 0 b i ll io n , t h a t is w h a t t h e

b u s i n e s s c a s e to l d u s t o e x p e c t o r t h e b a s is o n w h ic h w e a r e g o i n g t o
g o i n to t h i s p r o j e c t , b e t w e e n th a t a n d M a y 2 0 1 4 w e s h o u ld p u t i n t h e
b e s t a n d fi n a l o ff e r, w e h a v e a b e t t e r s l i d e th a t s h o w s th a t a n d t h a t
t e ll s u s w h a t th e i r b e s t a n d f in a l o ffe r s w e r e a n d t h e n f o ll o w e d b y t h e

Page 43 of 168

04 DECEMBER 2019 – DAY 196
n e g o ti a te d 2 3 I’ m t o ld . N o w th a t ’s th e b e s t a n d f i n a l o ff e r I’ m s o r r y, w e
w i ll fi n d w h e r e th e c o m p a r i s o n is m a d e b u t t h e ta k e o u t C h a ir is – t h e
b u s i n e s s c a s e a n tic i p a t e d R 3 4 .6 b il li o n , t h e c o n tr a c t e d f o r p r ic e w a s
R 2 9 . 3 3 5 b i ll io n , t h o s e a r e t h e t w o e x t r e m e s .

In between the best and

fi n a l o ffe r s c a m e t o a r o u n d R 2 9 . 5 b i ll io n . N o w w e k n o w t h a t t h e m e m o
t e ll s u s t h a t a lo w e r c a p it a l a c q u is i ti o n c o s t o f th e l o c o m o ti v e o b t a i n e d
is R 6 . 5 b i ll io n . N o w I ’ m g o in g t o t e s t t h i s w it h Mr C h a b i , i f I r e a d t h a t
s t a te m e n t t h a t t h e l o w e r c a p i ta l a c q u is i t io n c o s t o f th e lo c o m o t iv e s
o b t a i n e d is R 6 .5 b ill i o n , w o u ld I b e c o r r e c t in e x p e c ti n g a p r ic e
10

d i ff e r e n c e i n th e a c t u a l l o c o m o t iv e p r ic e . T h e r e s h o u ld b e s o m e p r i c e ,
I k n o w w e c o n tr a c t e d a t R 2 9 . 3 b i ll io n , t h e r e m u s t b e s o m e p r ic e t h a t
a d d s R 6 . 5 b i ll io n w h ic h w o u l d h a v e b e e n t h e o r i g i n a l p r ic e b e c a u s e th a t
is w h a t I s h o u l d h a v e n e g o t i a t e d a w a y, w o u l d I b e c o r r e c t ?
MR CHABI:

Ye s s o y o u w o u ld h a v e e x p e c te d th e p r ic e o f a b o u t

R 3 5 . 9 b il li o n .
ADV MAHLAPE SELLO:
MR CHABI:

W e s h o u l d h a v e e x p e c te d a R 3 5 . 9 b i ll io n ?

Correct.

ADV MAHLAPE SELLO:

B u t w e k n o w w e n e v e r g o t t o R 3 5 . 9 b i ll io n ,

n o t in t h e b u s i n e s s c a s e , n o t i n t h e b e s t a n d f in a l o ff e r ?
20

MR CHABI:

Correct.

ADV MAHLAPE SELLO:

S o w h e r e w o u l d t h a t R 3 5 b il li o n y o u c a ll i t,

w h e r e w o u l d i t c o m e fr o m ?
MR CHABI:

I s u p p o s e m y g u e s s is a s g o o d a s y o u r s A d v o c a te .

ADV MAHLAPE SELLO:
CHAIRPERSON :

O k a y.

I’m sorry what was that answer?

Page 44 of 168

04 DECEMBER 2019 – DAY 196
MR CHABI:

I have no idea.

CHAIRPERSON :

Hmm.

ADV MAHLAPE SELLO:

S o to t a k e th is f o r w a r d , i n y o u r s t a te m e n t y o u

d e a l w i t h t a b l e t w o o f t h a t v e r y m e m o , o k a y a n d t h a t is a t p a g e 1 6 9 .
C h a ir la s t w e e k w e g a v e y o u a l e g i b l e c o p y o f 1 6 9 a n d y o u s u g g e s t e d i t
be numbered 169.1.
CHAIRPERSON :

1 6 9 . 1 o k a y – w e ll t h e r e ’s a 1 6 9 .1 t h a t I s e e , it m u s t

be the one.
ADV MAHLAPE SELLO:
10

Ye s i t’s a m u c h b e t te r c o p y t h a n w h a t

appears at 169.
CHAIRPERSON :

J a o k a y I ’v e g o t 1 6 9 . 1 .

ADV MAHLAPE SELLO:

O k a y, n o w f ir s tl y Mr C h a b i , ju s t b r i e f ly

e x p l a i n w h a t is t h i s d o c u m e n t, w h a t is th is t a b le a b o u t ?
MR CHABI:

S o t h e t a b l e , b a s ic a lly is a b u il d u p o f th e c o s t s l e a d in g

u p t o t h e R 5 4 .5 b i ll i o n s t a r ti n g w i th t h e b a s e p r ic e o f t h e lo c o m o tiv e o f
R 2 9 . 3 6 b ill i o n s o i t l o o k s a t y o u r b a c k w a r d l o o k i n g e s c a l a ti o n , i t l o o k s
a t y o u r b a c k w a r d lo o k i n g F o r e x , it l o o k s a t y o u r T E , y o u r b a tc h p r ic e
adjustment

and

your

forward

r is k

m it ig a ti o n

factors

and

your

c o n ti n g e n c ie s a n d i t a r r iv e s a t R 5 4 .5 b i ll i o n .
20

ADV MAHLAPE SELLO:

S o – b e c a u s e w e h a v e w o r k e d t h r o u g h t h is

m e m o i t w o u l d n o t b e m is le a d i n g t o th e C h a i r i f w e s u g g e s t e d t h e
s u m m a r y a t p a r a g r a p h t w o o f t h e m e m o g iv i n g th e g lo b u l a r f i g u r e s o f
t h e in c r e a s e s , t h e d e t a il o f t h a t is to b e f o u n d i n ta b le t w o ?
MR CHABI:

T h a t ’s c o r r e c t .

ADV MAHLAPE SELLO:

S o t a b l e t w o i s a m o r e , y o u k n o w, g r a n u l a r

Page 45 of 168

04 DECEMBER 2019 – DAY 196
c a l c u l a ti o n .
MR CHABI:

Correct, should I provide…[intervenes].

ADV MAHLAPE SELLO:

Ye s j u s t , l ik e fo r in s ta n c e g i v e u s R 5 . 4 b il li o n

a n d r e l a t e t h a t t o ta b l e tw o a n d s e e h o w e x a c t ly i t ’s a r r iv e d a t.
MR CHABI:

O k a y s o t h e R 5 . 4 b i lli o n l o o k s a t t h a t – i t ’s a n u p d a t e o f

e c o n o m ic c o n d it i o n s , s o it ’s b a c k w a r d l o o k in g a n d i f y o u l o o k a t t a b le
t w o t h a t’s it e m A a n d i t e m C . T h e s u m o f i te m A a t R 2 .3 6 2 b i ll io n a n d
it e m C a t R 3 .0 3 b i ll io n g i v e s y o u R 5 . 4 b i ll io n .

T h e R 9 . 5 b i ll io n is

e s s e n ti a l ly a f o r w a r d lo o k i n g , y o u r r is k m i ti g a ti o n c o s ts a n d t h a t w o u l d
10

b e i te m E a n d F, i t e m E b e i n g y o u r e s c a la ti o n c o s ts a t R 6 .7 2 5 b il li o n
a n d y o u r F o r e x h e d g i n g c o s ts a t R 2 . 7 2 9 b ill i o n , s o t h e c o m b i n a t i o n o f
t h o s e g i v e s t h e R 9 .5 b il li o n .
ADV MAHLAPE SELLO:

A n d y o u h a v e c a p t u r e d t h e n a ll t h is in y o u r

s li d e 2 1 a n d a t th e s a m e ti m e y o u e x p r e s s a v i e w o n e a c h o n e o f t h o s e
it e m s ?
MR CHABI:

Correct.

ADV MAHLAPE SELLO:

T h e s l i d e s t h a t p r e c e d e th is o n e w o u l d

e x p l a i n , t h e r e a r e s o m e i te m s i n r e d a n d s o m e it e m s i n b la c k , j u s t
e x p l a i n to t h e C h a ir w h y t h a t is ?
20

MR CHABI:

O k a y s o th e i t e m s i n r e d a r e t h e li n e i t e ms w e to o k is s u e

w i t h a n d t h e i te m s in b lu e a r e th e li n e i t e m s w e a c c e p t e d , a l t h o u g h i t ’s
s o m e ju s t i fic a ti o n a r o u n d w h y w e a c c e p te d th e m .
ADV MAHLAPE SELLO:

A lr i g h t t h e n g o i n g b a c k t o s li d e 2 1 a n d

f o ll o w i n g o n t h e d i s c u s s i o n w e h a d w e k n o w t h e b u s i n e s s c a s e
a n t ic i p a te d R 3 0 b i ll io n f o r th e l o c o m o t iv e p r i c e t h e m e m o i n d ic a t e d t h e

Page 46 of 168

04 DECEMBER 2019 – DAY 196
n e g o ti a te d e n d p r ic e w a s R 2 9 .3 b i ll i o n .
MR CHABI:

Correct.

ADV MAHLAPE SELLO:

A n d w h a t y o u h a v e u n d e r a s s e s s e d v a l u e is

C h a b i ’s w o r k , r i g h t?
MR CHABI:

Correct.

ADV MAHLAPE SELLO:

A n d a s f a r a s t h e l o c o m o ti v e p r ic e i s

c o n c e r n e d y o u a g r e e d t o a p r i c e o f R 2 9 .3 b i ll i o n , th a t is w h a t w a s
n e g o ti a te d , th a t is w h a t w a s o ff e r e d .
MR CHABI:
10

I t w a s n ’ t h ig h e r th a n w h a t w e s a w a t t h e b e s t a n d f in a l

o ffe r s t a g e s s o w e h a d r e a s o n t o b e l ie v e t h a t t h e n e g o ti a ti o n i n t h i s
in s t a n c e w o r k e d to Tr a n s n e t ’s a d v a n t a g e .
ADV MAHLAPE SELLO:

S o t h e r e – a n d i t w a s n ’t h ig h e r th a n th e

b u s i n e s s c a s e y o u s ti ll c a m e i n l e s s a t th e b u s i n e s s c a s e .
MR CHABI:

T h a t is c o r r e c t .

A D V M A H LA P E S E L L O :

M y v e r y d a n g e r o u s m a t h e m a ti c s w o u l d g iv e

m e a d i ffe r e n c e o f a b o u t R 7 0 0 mi ll i o n .
MR

CHABI:

Yo u

mean

fr o m

the

b u s in e s s

case

or

fr o m

t h e … [ i n te r v e n e s ] .
ADV MAHLAPE SELLO:
20

MR CHABI:

Fr o m t h e b u s in e s s c a s e .

C o r r e c t , r o u g h l y R 7 0 0 m i ll i o n .

ADV MAHLAPE SELLO:

N o w i f i t i s R 7 0 0 m il li o n , w i th r e f e r e n c e t o t h e

b u s i n e s s c a s e t h a t’s t h e b e s t I c a n s a y t h e s a v i n g a m o u n t e d t o .

If I

s a y t o t h e B o a r d y o u a n t ic i p a te d t o s p e n d R 3 0 b i ll io n b u t I’v e n e g o t ia t e d
a p r ic e fo r R 2 3 . 3 b i ll io n .
MR CHABI:

R 2 9 .4 .

Page 47 of 168

04 DECEMBER 2019 – DAY 196
ADV MAHLAPE SELLO:

J a R 2 9 .4 s o t h a t is a s a v i n g w i t h r e fe r e n c e t o

t h e b u s i n e s s c a s e o f R 7 0 0 m i ll io n .
MR CHABI:

T h a t ’s c o r r e c t .

ADV MAHLAPE SELLO:
was

R 2 9 .5 b i ll i o n

B u t t o t e l l y o u t h a t th e ir b e s t a n d f i n a l o ff e r

during

n e g o t ia t io n

I

squeeze

th e m

further

to

R 2 9 . 3 b il li o n t h a t w o u l d b e a s a v i n g o f R 1 7 7 m il li o n ?
MR CHABI:

T h a t ’s c o r r e c t .

ADV MAHLAPE SELLO:
MR CHABI:
10

T h a t’s a f a r c r y f r o m R 6 . 5 b i ll io n .

Sorry?

ADV MAHLAPE SELLO:

T h a t’s a f a r c r y i n t h a t f i g u r e f r o m

R 6 . 5 b i ll io n .
M R C H A B I : I t is .
ADV MAHLAPE SELLO:

O k a y y o u t h e n d e a l w i t h b a c k w a r d e s c a la t io n ,

n o w j u s t b r ie f ly r e m in d u s w h a t t h a t i n v o lv e s a n d w h y i t is y o u t a k e
is s u e w it h i t ?
MR CHABI:

O k a y s o b a c k w a r d s e s c a l a ti o n e s s e n ti a l ly lo o k s a t th e

c h a n g e in p r ic e o v e r th e y e a r, A p r il 2 0 1 3 t o M a r c h 2 0 1 4 a g o o d
in d i c a t o r i n th is in s t a n c e w o u l d h a v e b e e n t h e P P I i n d e x , w e s a w t h a t i n
t h e b u s i n e s s c a s e , lo c a ll y a n d a b r o a d .
20

The number comes up to a

fi g u r e o f 2 .3 6 2 b a s e d o n w h a t w a s o b s e r v e d o v e r t h e p e r io d i n t e r m s o f
in fl a ti o n w e c o m e t o a fi g u r e o f 1 . 3 9 2 .
ADV MAHLAPE SELLO:

Now how would you do that, we know that

t h e r e w a s a p r o j e c t e d fi g u r e i n A p r il 2 0 1 3 fo r in f la t io n , o u r m o d e l , th e
b u s i n e s s c a s e h a d p r o j e c te d a p a r ti c u l a r i n fl a ti o n ?
MR CHABI:

Correct.

Page 48 of 168

04 DECEMBER 2019 – DAY 196
ADV MAHLAPE SELLO:
MR CHABI:

A n d t h a t [ in d is ti n c t ] a s p e c if ic a m o u n t t o i t .

Correct.

A D V M A H LA P E S E L L O :

So now we are in March or May 2014, what

w a s a o n e - y e a r p r o j e c t io n i n 2 0 1 3 fo r e s c a l a t io n h a s n o w b e c o m e
t o d a y ’s r e a l it y ?
MR CHABI:

Correct.

ADV MAHLAPE SELLO:

S o w h a t t h e n w o u ld h a p p e n is , I t a k e t h e

p r i c e a s i t w a s i n 2 0 1 3 a n d I a p p ly w h a t t h e i n fl a ti o n a c t u a ll y b e c a m e ,
is t h a t c o r r e c t?
10

MR CHABI:

W h a t y o u e x p e r ie n c e d y e s .

ADV MAHLAPE SELLO:

Ye s , a n d th a t i s t h e e x e r c is e y o u c o n d u c t e d

t o a r r iv e a t R 1 . 3 b i ll io n ?
MR CHABI:

T h a t ’s c o r r e c t .

ADV MAHLAPE SELLO:

T h e y a r r iv e d a t R 2 . 6 b i ll io n , d o y o u h a v e a n

id e a , a n u n d e r s t a n d i n g

of how

–

th a t ’s a l m o s t d o u b l e o f y o u r

c a l c u l a ti o n d o y o u k n o w h o w t h e y a r r iv e d a t th a t?
MR CHABI:

W e l l l o o k i n g a t ta b l e tw o t h a t is a n 8 % i n c r e a s e o v e r t h e

p e r i o d , th e a v e r a g e r a t e w e c a m e u p t o w a s a b o u t fo u r o d d a n d ju s t t o
e x p l a i n , lo o k i n g a t w h a t l o c a l i n fl a ti o n w a s o v e r th e p e r io d , A p r il 2 0 1 3
20

t o M a r c h 2 0 1 4 I t h i n k i t w a s a m o v e fr o m a b o u t 1 0 4 to 11 2 , t h a t w a s
b o u t 7 . 7 % o n t h e lo c a l h a n d , s o in f l a ti o n o v e r t h a t p e r i o d P P I
[i n d is t in c t] in d ic e s c h a n g e d b y 7 . 7 4 % o v e r t h a t p e r io d a n d t h a t’s t h e
o v e r a l l Pr o d u c e r Pr ic e In d e x .

D i g g i n g d e e p e r i n t o t h e i n d e x tr y i n g t o

fi n d t h e m o r e a p p r o p r ia t e i n d e x , in t h is i n s t a n c e r e la t in g to m e t a l s ,
m a c h in e r y a n d w h a t n o t , s o m e t h in g t h a t r e l a t e s p r e t t y c lo s e b e c a u s e

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04 DECEMBER 2019 – DAY 196
r e m e m b e r t h e o v e r a l l i n d e x in c l u d e s a v a r i e ty o f p r o d u c e r g o o d s , f o o d s ,
t e x ti le s , c h e m ic a ls a n d s o f o r th , lo o k in g p u r e ly a t t h e tr a n s p o r t i n d e x
t h a t w e n t u p b y a b o u t 7 .3 % o v e r th e p e r i o d , w e h o w e v e r c h o s e t o a p p ly
t h e 7 . 4 % t h e o v e r a l l in d e x a s a p p o s e d to 7 . 3 3 % g iv in g t h e m e m o t h e
b e n e fi t o f t h e d o u b t b u t t h a t ’s j u s t o n th e lo c a l a n d it ’s i m p o r t a n t t o
h i g h l ig h t a g a i n h e r e th a t th e l o c o m o t iv e h a d a fo r e ig n c o m p o n e n t a n d
h a d a l o c a l c o m p o n e n t.

I t w o u l d h a v e b e e n u n ju s t, i n c o r r e c t t o a p p ly

lo c a l i n f l a t i o n i n d i c e s o n b o t h t h e l o c a l c o m p o n e n t a n d t h e f o r e i g n
c o m p o n e n t . W e w e n t o n t o l o o k a t w h a t f o r e i g n in f la t io n w a s o v e r t h e
10

p e r i o d i n t h e E U i t w a s e x tr e m e ly lo w I t h in k i t w a s b e l o w 1 % o v e r t h e
p e r i o d , t h e o n e - y e a r p e r io d . I n t h e U n i te d S t a t e s i t w a s 1 – m o s t o f t h e
p r i c e s w e r e q u o t e d i n U S D o l la r s h e n c e t h e r e f e r e n c e t o t h e U n it e d
S t a te s in D o ll a r s i n t h is i n s ta n c e , i t w a s 1 .6 5 % o n t h e P P I a n d i n t h e
U n i te d S t a t e s , i t w a s 1 .8 3 % o n t h e C P I a n d in t h e U n it e d S t a te s , w e
ju s t a p p li e d 2 % o v e r t h e p e r io d , w e s t il l … [ in t e r v e n e s ] .
ADV MAHLAPE SELLO:

I f I m a y t h e n – a n d w e h a v e d e a l t w i th t h i s

c o n c e p t th a t t h e p r o d u c t io n o f t h e lo c o m o t iv e w a s s p li t l o c a l ly a n d
f o r e i g n s o i f w e a r e g o i n g t o a d j u s t th e p r i c e t o r e f le c t e s c a l a t i o n I m u s t
d o t h a t s p li t a g a i n . I m u s t u n d e r s ta n d w h i c h c o m p o n e n t i s f o r e ig n a n d
20

w h ic h c o m p o n e n t is lo c a l .
MR CHABI:

T h a t ’s c o r r e c t .

ADV MAHLAPE SELLO:

A n d t h e c o m p o n e n t t h a t is l o c a l w il l b e

s u b j e c t e d t o t h e in f la t io n r a t e a s a p p li c a b l e in S o u th A f r i c a a t t h a t
ti m e ?
MR CHABI:

Correct.

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04 DECEMBER 2019 – DAY 196
ADV MAHLAPE SELL O:
MR CHABI:

A n d y o u s a y, o ffi c ia ll y i t w a s 7 . 7 4 % .

The overall index yes.

ADV MAHLAPE SELLO:

T h e o v e r a ll i n d e x a n d is t h a t th e r a t e I w o u l d

a p p ly to t h e S o u t h A fr ic a n c o m p o n e n t ?
MR CHABI:

Correct.

ADV MAHLAPE SELLO:

T h e o t h e r f o r e ig n c o m p o n e n t I th e n w o u l d

h a v e t o u s e t h e U S P P I o r C P I b e c a u s e t h e ir b u s i n e s s c a s e w a s b a s e d
o n C P I b u t h a v i n g s a i d t h a t , t h e t w o w e r e – th e r e w a s n o t m u c h
d i ff e r e n c e b e t w e e n t h e t w o , n o t h in g m u c h t u r n s o n t h a t .
10

MR CHABI:

In t h e b u s i n e s s c a s e y e s .

A D V M A H LA P E S E L L O :

A n d n o w y o u ’r e t e l li n g t h e C h a ir t h a t w h e n

o n e h a s r e g a r d t o t h e U S P P I a r o u n d t h a t ti m e a n d C P I t h e y w e r e
s o m e w h e r e in t h e r a n g e o f 1 . 6 8 % .
MR CHABI:

1 . 6 to 1 .8 % y e s .

A D V M A H LA P E S E L L O :

S o w h a t o u g h t t o h a v e h a p p e n e d is y o u

in fl a t e t h e S o u t h A f r i c a n 6 0 % c o m p o n e n t .
MR CHABI:

If i t is 6 0 .

ADV MAHLAPE SELLO:

I f it is 6 0 o f c o u r s e b y th e a p p lic a b l e r a te a n d

y o u i n fl a te t h e f o r e i g n b y t h e a p p li c a b l e U S P P I r a t e ?
20

MR CHABI:

Correct.

ADV MAHLAPE SELLO:

Yo u s a i d t h a t a t R 2 . 3 b i ll io n it w o u l d a p p e a r

t h a t th e fu ll l o c o m o t iv e p r ic e w a s i n fl a te d b y t h e h i g h e r S o u t h A f r ic a n
in fl a ti o n r a t e ?
MR CHABI:

E ig h t p e r c e n t .

ADV MAHLAPE SELLO:

Eight percent?

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04 DECEMBER 2019 – DAY 196
MR CHABI:

Ye s .

A D V M A H LA P E S E L L O :

O k a y, n o w w h e n y o u d o t h e m a t h e m a t ic

e x e r c is e y o u ta k e t h a t p r i c e y o u i n fl a te i t b y 8 % a n d y o u c o m e t o
R2.262.
MR CHABI:

B il li o n c o r r e c t .

ADV MAHLAPE SELLO:

Wa s i t a c o r r e c t a p p r o a c h to c a lc u l a ti n g th e

b a c k w a r d e s c a la t io n ?
MR CHABI:

W e ll i t ’s n o t t o s a y t h a t t h e y a c t u a l ly a p p li e d e ig h t lo c a ll y

a n d e ig h t a b r o a d , I t h i n k t h e r e a r e i n fi n i t e ly m a n y s o lu t io n s t o t h e
10

r a ti o s , t o th e r a t e s a p p li e d th e r e a n d t h e r a t e s a p p li e d h e r e t h a t y o u
c o u l d c o m e u p w i t h g iv e n t h e w e ig h ti n g s , I m e a n , lo o k i n g a t C N R , t h e ir
foreign component was about – sorry their local component was about
3 7 to 3 8 % I t h i n k a t th e t i m e o n l y G E m a tc h e d t h e lo c a l c o n t e n t
r e q u ir e m e n t o f 5 5 , a ll t h e o th e r t h r e e fe ll b e l o w th e D T I r e q u ir e m e n t s o f
lo c a l c o n t e n t . I t w a s 4 6 f o r B o m b a r d i e r i t w a s 4 9 . 6 % f o r C S R s o
a p p ly i n g t h o s e r e l a tiv e s p l i ts to t h e in d i c e s I’ v e ju s t m e n t io n e d 7 . 7 4
a n d 2 % th e f i g u r e is m u c h l o w e r.

It c o u ld h a v e b e e n a 1 0 , 2 % c a s e

t h e r e w a s a p p l ie d 1 0 l o c a lly 2 % a b r o a d , n o b o d y k n o w s w h a t r a te w a s
a p p li e d lo c a ll y a n d w h a t it w a s a p p l ie d a b r o a d , h o w e v e r t h e w e i g h e d
20

a v e r a g e o f t h o s e r a t e s c o m e s t o 8 % w h i c h is e q u i v a l e n t t o a p p ly i n g 8 %
lo c a lly a n d 8 % a b r o a d .
ADV MAHLAPE SELLO:

A n d i f t h a t ’s y o u r th e o r y w h e n y o u te s t th e

t h e o r y a n d a p p ly th e 8 % t o b o t h y o u c o m e t o 2 . 3 6 2 ?
MR CHABI:

Correct.

ADV MAHLAPE SELLO:

Yo u t h e n d e a l o n t h e t a b le w i t h o r i g i n a l T E

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04 DECEMBER 2019 – DAY 196
s c o p e , j u s t v e r y b r i e f ly C h a ir, t h i s i n v o lv e d – p e r h a p s y o u e x p l a in i t
b e c a u s e y o u d o n ’ t t a k e is s u e w i t h i t , w h a t d i d y o u u n d e r s t a n d t h e T E
scope to be and why don’t you take issue with it?
MR CHABI:

O k a y s o a t t h e ti m e o f p r o d u c in g th e r e p o r t a n d I s u p p o s e

w r i t in g th is s t a te m e n t b e c a u s e n o a d d i ti o n a l w o r k w a s c a r r i e d o n T E
s c o p e b e t w e e n t h e w r i ti n g o f t h e r e p o r t a n d th e p r o d u c t io n o f t h e
s t a te m e n t w e w e r e n o t t o o s u r e w h a t T E s c o p e r e l a t e d t o .

The

n u m e r o u s i n te r v i e w s w i th M N S a n d Tr a n s n e t o ff ic i a ls d i d n o t s h e d a n y
li g h t o n w h a t th a t T E s c o p e w a s .
10

S o m e q u e s t io n s w e c o n t e n d e d w i t h

w a s i f T E h a d a r o l e , a p a r t t o p la y i n t h e p r o d u c t io n o f t h e lo c o m o t iv e s
s h o u l d w e n o t h a v e s e e n a r e d u c t i o n i n t h e b a s e p r i c e o f l o c o m o t iv e ,
g iv e n t h a t t h e y p r o d u c in g a p a r t o f it , i f n o t t h e n m a y b e i t ’s j u s t a
p r e m iu m t o r e f l e c t t h a t T E is i n v o lv e d i n t h e l o c o m o ti v e m a n u f a c t u r i n g
p r o c e s s a n d b e c a u s e w e ’ r e u s i n g a l o c a l e n ti ty, a g a i n lik e t h e
lo c a lis a ti o n p r e m i u m i n t h e b u s in e s s c a s e t h e r e ’s a p r e m i u m t o b e
added on to the price…[intervenes].
ADV MAHLAPE SELLO:

J u s t s o r r y t o r e m i n d o u r s e lv e s , T E s t a n d s fo r

Tr a n s n e t E n g in e e r i n g a d i v i s i o n o f Tr a n s n e t ?
MR CHABI:
20

Correct.

ADV MAHLAPE SELLO:

S o t h is is a p r o v i s i o n f o r th e s c o p e o f w o r k

a n t ic i p a te d t o b e d o n e b y Tr a n s n e t E n g i n e e r i n g ?
MR CHABI:

C o r r e c t a n d th a t i n c l u d e d th i n g s l ik e a s s e m b li n g t h e b o g i e

– b a s ic a l ly a s s e m b ly o f t h e lo c o m o t iv e .
ADV MAHLAPE SELLO:

S o y o u a r e s a y in g y o u w e r e n e v e r a b le t o

d e t e r m i n e w h e t h e r o r n o t t h e p r o j e c t a n tic ip a t e d th e T E s c o p e a s

Page 53 of 168

04 DECEMBER 2019 – DAY 196
d e f in e d ?
MR

C H A B I:

When

you

say

the

project,

y o u ’r e

r e f e r r in g

to

t h e … [ i n te r v e n e s ] .
ADV MAHLAPE SELLO:
MR CHABI:

N o w e c o u l d n o t ti e th e 2 % l o c a l is a ti o n t o T E .

ADV MAHLAPE SELLO:
MR CHABI:

The business case.

Ye s .

Ye s , o u r u n d e r s ta n d i n g w a s t h e y d id n o t r e la t e to T E .

ADV MAHLAPE SELLO:

A n d w h e n w e lo o k a t th e o r ig i n a l R 3 6 . 8 b il li o n

E T C , i s t h e r e a n y r e fe r e n c e to T E s c o p e in th a t R 3 8 .6 b il li o n ?
10

MR CHABI:

N o i t is j u s t r e fe r r e d to a s a l o c a l is a ti o n p r e m iu m .

ADV MAHLAPE SELLO:
MR CHABI:

Of 2% ?

Of 2% .

ADV MAHLAPE SELLO:

A n d m a t h e m a tic a l ly R 1 . 7 b i ll io n d o e s n o t

r e fl e c t 2 % ?
MR CHABI:

W e ll I t h in k i f y o u t a k e t h e c o m b i n e d v a lu e o f – ju s t a

s e c o n d , o f 2 . 5 w h ic h is t h e o r i g in a l a n d t h e a d d e d I t h i n k y o u ’r e l o o k in g
at about nine.
A D V M A H LA P E S E L L O :

S o w h a t y o u ’r e s a y i n g t o t h e C h a ir i s t h a t

c o u l d b e t h e 2 % - t h a t c o u ld h a v e , a s p a r t o f i t , t h e 2 % lo c a li s a t io n
20

p r e m iu m p l u s s o m e t h in g e l s e b u t y o u a r e n o t i n a p o s i ti o n t o s a y
e x a c tl y w h a t g o e s i n to t h e T E s c o p e ?
MR CHABI:

Correct.

A D V M A H LA P E S E L L O :

N o w y o u r e fl e c t e d a s a n a c c e p t e d fi g u r e o f

1 .7 y o u h a v e s ta r r e d th a t , i t d o e s n ’ t – y o u h a v e p u t a n a s t e r ix a g a i n s t
t h a t n u m b e r i t d o e s n ’ t a p p e a r i n th e s li d e , c a n y o u ju s t e x p la in t o th e

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04 DECEMBER 2019 – DAY 196
C h a ir i t’s – y o u i n d ic a te i n y o u r s t a t e m e n t t h a t i t ’s a l m o s t li k e a
c o n d i ti o n a l a c c e p t a n c e o f t h a t f ig u r e , w h a t is t h e b a s is – w h a t is t h e
c o n d i ti o n a n d t h e b a s is th e r e o f ?
MR CHABI:

S o w e h a d n o b a s is t o r e fu t e th e c o s t o f R 1 7 b il li n f o r t h e

o r i g in a l T E s c o p e s o w e j u s t a c c e p te d i t a s i t w a s th e r e .

A g a in th e

w h o le e x e r c i s e is t o d e te r m i n e t h e r e a s o n a b il i ty o f t h e E T C , i n c r e a s in g
E T C n o t s o m u c h t h e a c c u r a c y o f t h e in c r e a s e b u t h e r e a s o n a b il i ty a n d
in d o i n g t h a t w e d i d a s m u c h a s p o s s ib l e t o g iv e t h e m e m o t h e b e n e fi t
of the doubt.
10

ADV MAHLAPE SELLO:

S o i n y o u r – it ’s a p p a r e n t fr o m y o u r

s t a te m e n t t h a t M N S is s t il l in v o lv e d in fu r t h e r i n v e s t ig a ti o n o f t h is T E ,
Tr a n s n e t E n g i n e e r in g in v o lv e m e n t a n d i f i t w e r e d e te r m i n e d th a t th e r e
w a s n o e x tr a c o s t a t ta c h in g to T E ’s in v o lv e m e n t th e n y o u w il l – t h a t
R 1 . 7 0 7 b ill i o n y o u h a v e a c c e p te d , y o u w i ll r e j e c t ?
MR CHABI:

I f t h e r e ’s n o e x tr a c o s t o r i f th e l o c o m o t iv e p r ic e c o m e s

d o w n to r e fl e c t T E ’s i n v o lv e m e n t y e s w e w i ll a d ju s t a c c o r d in g ly.
ADV MAHLAPE SELLO:
MR CHABI:

Correct so.

A D V M A H LA P E S E L L O :
20

Yo u t h e n d e a l w i t h F o r e x a d j u s t m e n t.

A n d t h e m e m o s u g g e s ts R 3 b i ll i o n y o u a s s e s s

t h e v a lu e a ls o a t R 3 b il li o n , s o y o u d o n ’ t ta k e i s s u e ?
MR CHABI:

W e c a m e t o a s li g h t ly h i g h e r fi g u r e b u t o f c o u r s e a l l w e

h a d t o w o r k w i t h w a s th e b a ffl e p r ic e w h i c h is a b o u t R 1 7 7 mi ll i o n h i g h e r
s o y o u w o u l d e x p e c t u s t o c o m e t o a h ig h e r f ig u r e in t h is in s ta n c e . W e
a c c e p te d t h e 3 . 0 3 , w e c a m e t o a b o u t R 3 . 1 b i ll io n s o w e t o o k t h e 3 . 0 3 t o
b e a r e a s o n a b le n u m b e r in t h a t i n s t a n c e . H a d i t b e e n t o o f a r o ff le t ’s

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04 DECEMBER 2019 – DAY 196
s a y 5 % o ff t h e n w e w o u ld h a v e q u e s ti o n e d … [ i n t e r v e n e s ] .
ADV MAHLAPE SELLO:

T h is i s r e d n o w is t h e b a t c h p r ic e a d ju s t m e n t

ju s t t o r e m in d o u r s e lv e s a n d t o g iv e y o u a h e a d s u p , b o t h Mr C a l la r d
a n d Mr S e d u m e d i t e s ti f ie d a t l e n g t h r e g a r d i n g t h e b a t c h p r i c i n g .

Mr

S e d u m e d i ’s l e g a l v i e w, b e i n g a l a w y e r w a s t h a t a n a d j u s t m e n t, a b a tc h
p r i c e a d j u s t m e n t w a s n o t j u s ti f ia b le o n t h e b a s is o f t h e R F P i t w a s n o t
a c o u r s e th a t w a s a n ti c i p a t e d i n t h e R F P i t h a s g o t n o b a s is i n t h e b id
a s a c o n c e p t t h a t s e e m s t o h a v e a r is e n d u r in g th e c o u r s e o f
n e g o ti a ti o n , t h a t is th e b a c k g r o u n d .
10

M R C H A B I:

O k a y.

ADV MAHLAPE SELLO:

N o w I s e e y o u ’v e g o t b a tc h p r i c i n g i n r e d ,

w h a t a r e y o u tr y in g to e x p r e s s w i t h th a t ?
MR CHABI:

S o w e a c c e p t t h e v i e w t h a t b a tc h p r i c i n g w a s n o t – t h e

b a t c h p r ic i n g c o s t w a s n o t a c o s t a n t ic i p a t e d i n t h e r e q u e s t fo r
p r o p o s a l s b y Tr a n s n e t , w e t r i e d t o c o m p u te th is R 2 . 7 b il li o n d e r i v e it
a n d th e o n ly s c h e d u l e t h a t g a v e u s a c o s t o f R 2 . 7 b i ll io n w a s t h e b r e a k
p o i n t p r i c i n g s c h e d u l e w h i c h w a s a n t i c ip a t e d i n th e r e q u e s t f o r
p r o p o s a l . I t w a s t h e o n ly t a b l e w i th c o s ts , l a c k fo r a b e tt e r w o r d , t h a t
a l lo w e d u s t o a r r iv e a t R 2 . 7 b il li o n . W h e n y o u l o o k a t w h a t t h e O E M ’s
20

p r o v i d e d i n t h e R F P, in th e b r e a k p r ic in g s c h e d u l e , c o n s id e r in g t h a t
t h e r e w a s a 5 0 / 5 0 s p l i t o n th e d ie s e l a n d 2 3 3 d ie s e ls t o G E , 2 3 2 to
C N R a n d a 6 0 / 4 0 o n t h e e le c t r ic a n d 3 5 9 t o C S R a n d 2 4 0 to
B o m b a r d i e r, w e c o m e to a c o s t o f a b o u t R 2 . 7 b il li o n .

We then

c o n c l u d e d th a t , o k a y th is m u s t h a v e b e e n c o m p u t e d u s i n g t h e b r e a k
p r i c i n g , b r e a k p o i n t p r ic i n g s c h e d u l e , th a t o f c o u r s e c a n n o t b e p r o v e n

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04 DECEMBER 2019 – DAY 196
o n o u r h a n d , h o w e v e r li k e I s a y w h e n y o u t a k e t h e t a b l e a n d y o u d o t h e
c o m p u ta t io n y o u g e t to R 2 .7 b il li o n . T h e R F P i n s e c ti o n 2 . 3 . 1 i f I r e c a ll
r ig h t c l e a r ly s ta t e s t h a t Tr a n s n e t r e q u ir e s th e o p ti o n to c h a n g e
q u a n ti ti e s a n d d o e s n o t e x p e c t t o p a y a p r i c e p r e m i u m f o r it . N o w w h e n
w e l o o k a t t h e n e g o t ia t io n s h e e t s I t h in k p r e s e n t e d b y Mr S e d u m e d i I
t h i n k e v e n i n th e n e g o ti a ti o n s t a g e s i t w a s p r e t ty c l e a r t h a t t h a t p r i c i n g
w a s n o t a n ti c i p a te d – t h e n e g o t ia t io n i n t h e R F P s o r r y a n d s h o u l d n o t
h a v e b e e n a c o s t t h a t w o u l d b e a ffe c t e d .

A n d o u r u n d e r s t a n d in g o f

b r e a k p o in t p r i c i n g i s i t i s a p r e m a t u r e te r m i n a t io n o f th e c o n tr a c t b u t i t
10

o c c u r s i n c o n tr a c t . I t a s s u m e s l o s s o f e c o n o m i e s o f s c a le i n a d d i ti o n to
t h a t s e t u p c o s ts .
s e t ti n g y o u r s e l f u p

So there are costs you would have incurred in
for

a

certain

number

o f l o c o m o t iv e s

to be

m a n u f a c t u r e d t o h a v e th a t th e n s u b s e q u e n tl y c u t m e a n s th a t y o u
c a n n o t r e c o u p t h o s e c o s ts b e c a u s e th e y a r e s u n k c o s t s .

And that

Tr a n s n e t w a s p r e p a r e d t o p a y a p e n a l ty f o r.
A D V M A H L A P E S E L L O : J u s t i f I m a y ? S o y o u w h a t y o u s u g g e s ti n g is
w h a t e v e r I u n d e r s t a n d – u n d e r s ta n d i n g o f w h a t o f b a tc h p r ic in g is it
s h o u l d n o t b e c o n f la t e d w i t h b r e a k p o i n t p r i c i n g ?

These are two

d i ff e r e n t c o n c e p t s .
20

M R C H A B I : T h e y a r e tw o d i ff e r e n t c o n c e p ts a n d I t h in k j u s t to a d d a
f u r th e r n o t e a n d h o p e f u l ly n o t t o c o n fu s e i n th is in s ta n c e . E v e n i f a n d
t h is is n o t s a y i t w a s b a tc h p r ic in g w a s c o n te m p l a t e d i t s h o u l d n o t h a v e
b e e n to t h e t u n e o f 2 .7 b i ll io n b e c a u s e b r e a k p o in t p r ic i n g a ll o w s f o r
c o s t t h a t w o u l d n o t h a v e i n c u r r e d p r i o r t o t h e c o n tr a c t b e i n g s i g n e d . I t
is u n d e r s t a n d a b l e o n a l o s s o f e c o n o m i e s s c a l e b a s is b u t n o t o n a

Page 57 of 168

04 DECEMBER 2019 – DAY 196
s e t u p o f p r o d u c ti o n l i n e s a n d a ll o f t h o s e o th e r f a c t o r s r a is e d in th e
memorandum.

N o c o n t r a c t w a s a g r e e d u p o n n o n e o f t h e O E M ’s h a d

r e a s o n to g o a n d s e tu p p r o d u c ti o n li n e s o n t h e b a s is t h a t th e y h a v e
a lr e a d y b e e n a w a r d e d t h e c o n tr a c t s o s u c h c o s ts s h o u ld n o t h a v e b e e n
le v i e d o n t o Tr a n s n e t.

H o w e v e r j u s t to r e i t e r a t e b a tc h p r ic in g w a s n o t

c o n te m p l a t e d f o r i n th e R F P. A n d i n s t a n c e s li k e th a t d o a r i s e w h e r e a s
a s u p p li e r y o u a r e to ld y o u – i t is u n c e r t a i n h o w m u c h a f te r c o n tr a c t
y o u a r e g o i n g t o b e g iv e n p r ic e th e p r e m iu m i n to y o u r p r i c e , a ll o w f o r it
in y o u r p r i c e a n d g iv e u s a p r ic e b u t d o n o t c h a r g e u s a p e n a l ty i f w h a t
10

y o u g e t is n o t w h a t y o u e x p e c te d . I t is n o t u n i m a g i n a b le t o t h i n k t h a t
t h e t e m p ta t io n i s q u i t e h i g h t o p r ic e a t 4 6 5 b e c a u s e i t m a k e s y o u
c o m p e ti t iv e .

S o t h e r e m i g h t h a v e b e e n a t e m p t a t i o n to p r i c e a t t h e

h i g h e s t p o s s ib l e n u m b e r j u s t to b e a b l e t o g e t in it is j u s t a v i e w.
ADV MAHLAPE SELLO:

S o w h a t y o u a r e s u g g e s ti n g t o u s a s r e g a r d

b a t c h p r ic i n g a s y o u r e j e c t e d i t b e c a u s e t h e R F P d i d n o t p r o v i d e f o r
batch pricing.
M R C H A B I : C o r r e c t.
ADV MAHLAPE SELLO : And if you were to be kind and read that as a
b r e a k p o i n t p r ic i n g y o u w o u l d s ti ll r e j e c t t h e c o s t o f 2 . 7 b i ll io n ?
20

M R C H A B I : C o r r e c t.
A D V M A H L A P E S E L L O : O k a y. Yo u t h e n d e a l w i th a d d i ti o n a l T E s c o p e
a n d a m I c o r r e c t t o i n t e r p r e t t h a t to m e a n it r e l a t e s t o w h a t w e c a ll t h e
o r i g in a l T E s c o p e a b o v e a n d i t i s a l l a b o u t t h e p a r t ic i p a ti o n o f Tr a n s n e t
E n g i n e e r i n g in t h e d e l iv e r y o f t h e l o c o m o ti v e s ?
M R C H A B I : T h a t is c o r r e c t .

Page 58 of 168

04 DECEMBER 2019 – DAY 196
A D V M A H L A P E S E L L O : A n d I s e e w i t h t h a t o n e y o u d o n o t t a k e is s u e ?
MR CHABI:

W e t a k e i t a s is b e c a u s e w e g o t n o r e a s o n to r e fu t e t h e

n u m b e r s p u t fo r w a r d .
ADV MAHLAPE SELLO:

Ye s .

We then get to the biggest increase

w h ic h is t h e f o r w a r d e s c a l a ti o n . T h e b u s i n e s s c a s e h a d w o r k e d o n a n
e s c a l a t io n o f 2 . 5 3 b il li o n b u t r e m i n d in g o u r s e l v e s t h a t w a s a s a t A p r il
2 0 1 3 . Yo u I w i ll ju m p y o u r a s s e s s e d v a lu e a s a t M a y 2 0 – A p r il 2 0 1 4 i s
t h a t i n fl a ti o n – fo r w a r d e s c a l a ti o n s h o u l d h a v e b e e n p r o v id e d f o r –
c o s ts s h o u l d h a v e b e e n p r o v i d e d fo r 3 . 4 b i lli o n . C o r r e c t .
10

M R C H A B I : 3 . 4 b i ll io n y e s w e t h o u g h t w a s a r e a s o n a b le fi g u r e .
ADV MAHLAPE SELLO:

B u t t h e m e m o r a n d u m in d i c a t e s t h a t f o r w a r d

e s c a l a t io n is 6 . 7 b i ll io n . W h y s u c h a b i g d i ff e r e n c e b e t w e e n y o u r
c a l c u l a ti o n a n d t h e m e m o r a n d u m .
C H A I R P E R S O N : W e ll t h e r e is a b i g d i ff e r e n c e b e tw e e n t h e c a l c u la t io n
in th e b u s i n e s s c a s e c o m p a r e d to t h e M a y 2 0 1 4 m e m o r a n d u m a n d a b ig
d i ff e r e n c e b e t w e e n th e c a lc u la t io n o n th e M a y 2 0 1 4 m e m o r a n d u m a n d
t h e a s s e s s e d v e r s i o n . T h e y a r e a l l q u i t e – th e g a p s a r e q u i t e b i g .
MR CHABI: Material correct yes.
A D V M A H L A P E S E L L O : Ye s H m ja .
20

CHAIRPERSON : Why is that?
MR CHABI:

O k a y s o – I w il l f ir s t a d d r e s s th e d i ffe r e n c e b e tw e e n th e

m e m o r a n d u m a n d t h e r e a s s e s s e d v a l u e a n d th e n to u c h o n t o t h a t i n th e
business case.
ADV MAHLAPE SELLO:

M a y I s u g g e s t t h is ?

C h a ir h o w y o u g e t t o t h e fi g u r e o f 3 . 4 b il li o n ?

Page 59 of 168

Can you explain to the

04 DECEMBER 2019 – DAY 196
M R C H A B I : C o r r e c t.
A D V M A H L A P E S E L L O : Th e n p e r h a p s o n c e w e u n d e r s t a n d t h a t w e w i ll
tr y a n d u n d e r s t a n d p e r h a p s h o w t h e y g o t t o t h e ir f ig u r e o f 6 .
CHAIRPERSON : Ys.
ADV MAHLAPE SELL O : If you can explain.
CHAIRPERSON :

I t h in k t h a t is t h e b e s t w a y.

Yo u e x p l a in y o u r o w n

assessment.
M R C H A B I : As s e s s m e n t.
CHAIRPERSON : And then maybe you might then be able to say what
10

y o u t h i n k t h e o th e r s d id w r o n g th a t l e d t h e m to t h e f ig u r e s th a t d o n o t
a g r e e w i t h y o u r fi g u r e .
A D V M A H L A P E S E L L O : Ye s C h a ir.
M R C H A B I : O k a y.
ADV MAHLAPE SELLO:

Yo u d o n o t h a v e to b e v e r y h a r s h o n t h e

p e r c e n t a g e s a n d – j u s t w e n e e d th e c o n c e p t t o a p p l y.
MR CHABI:

A lr i g h t .

t h e 3 . 4 b i ll io n .

O k a y s o w h a t i s th e a p p r o a c h u s e d t o a r r iv e a t

I th i n k ju s t to g iv e y o u t h e a s s u m p ti o n s u p fr o n t .

We

t o o k a fl a t 6 % l o c a lly a n d 2 % a b r o a d .
A D V M A H L A P E S E L L O : A n d t h e n j u s t t o r e m i n d – s o r r y o u r s e lv e s t h a t
20

y o u – w h y s p e c i fi c a ll y 6 a n d 2 ?
MR CHABI:

O k a y s o a g a in i n k e e p in g w it h t h e b a s i s in th e

m e m o r a n d u m t h a t is o n e a s p e c t a n d s e c o n d ly a s s e s s i n g t h a t b a s e t o
see if it was reasonable. The memorandum speaks about 6% being a
r e a s o n a b l e n u m b e r t o c o m p a r e t h e i n fl a ti o n fi g u r e t o . D o w e a g r e e w i t h
that?

Ye s w e d o . W h y d o w e a g r e e w i t h it ?

Page 60 of 168

Again for the reasons

04 DECEMBER 2019 – DAY 196
o u t li n e d b e f o r e if y o u lo o k a t h is t o r y i n fl a t io n r a t e s w e r e b e l o w 6 % . I f
you look at rates implied b y the market going forward over a ten year
p e r i o d w e a r e l o o k i n g a t a b o u t 6 . 3 % t h a t is t h e a v e r a g e p ic k e d u p o r
between – over the period of March.
A D V M A H L A P E S E L L O : Ye s .
MR CHABI:

A n d i f w e a v e r a g e th a t fr o m M a r c h 1 t o M a r c h 3 1 i t is

a b o u t 6 5 t h e r e a b o u t . T h a t is w h a t t h e m a r k e t fo c u s s e d i n f l a t i o n t o b e
g o i n g fo r w a r d o v e r a te n y e a r p e r io d . A g a i n m o s t i m p o r t a n tl y i s w h a t
o u r o w n m o n e ta r y p o l ic y c o m m i t t e e t a r g e ts .
10

Th e j o b o f th e m o n e t a r y

p o li c y c o m m i t t e e is to e n s u r e p r ic e s ta b il i ty. K e e p i n fl a ti o n a s l o w a s
p o s s i b le a n d a ls o s t a b l e . T h a t is o n e o f t h e t a r g e ts a m id s t e n s u r i n g
h i g h a n d s ta b le e c o n o m ic g r o w th a n d l o w u n e m p l o y m e n t a n d s o f o r t h .
I t i s t h e ir r o l e t o b e s u r e a n d h o w d o t h e y d o t h a t ?

T h e y c h a n g e th e

p o li c y r a te s – in t e r e s t r a te s u p o r d o w n t o i n fl u e n c e i n f l a t i o n . S o o v e r
t h e l o n g t e r m y o u c a n e x p e c t t h e i n fl a ti o n y o u e x p e r i e n c e t o b e th a t
e n v is a g e d b y t h e m o n e t a r y p o lic y c o m m i t te e .

C u s to m i s e d b a c k t o

M a r c h 2 0 1 4 t h e R e s e r v e B a n k G o v e r n o r a t th e ti m e h a d s p o k e n a b o u t
in c r e a s i n g i n t e r e s t r a t e s to l o w e r in f la t i o n w h ic h p o i n ts t o in f la t io n
lik e l y f a l li n g o v e r t h e t h r e e / f o u r y e a r p e r io d .
20

So 6% for us was a

r e a s o n a b l e n u m b e r t o a s s i g n . J a to a s s u m e f o r in f la t io n g o in g fo r w a r d .
A D V M A H L A P E S E L L O : Th a n k y o u .
MR CHABI:

The memorandum seems to sup port that as well.

a d o p t t h e s a m e p h i lo s o p h y a b r o a d . A b r o a d th e y t a r g e t 2 % .

Yo u
The

F e d e r a l O p e n M a r k e t C o m m i t t e e i n t h e U n i te d S t a te s t a r g e ts a –
t a r g e ts 2 % i n fl a ti o n .

T h e E U t h e M o n e t a r y P o li c y i n t h e E U h a s t h e

Page 61 of 168

04 DECEMBER 2019 – DAY 196
s a m e t a r g e t o f 2 % w i th t h e s a m e a b r o a d o b j e c ti v e s a s w e w o u l d e x p e c t
h e r e . P r ic e s t a b il i ty, e c o n o m ic g r o w t h , l o w u n e m p l o y m e n t a n d s o f o r th .
S o 2 % a g a i n o n t h e f o r e i g n a n d m a d e s e n s e t o u s a s a n a s s u m p t io n
g o i n g fo r w a r d .

W e i g h i n g t h a t b e t w e e n lo c a l a n d f o r e i g n r o u g h

e s ti m a t i n g 5 0 / 5 0 y o u l o o k i n g a t a b o u t 4 % . I t h i n k w h a t w e h a v e h e r e i s
way in excess of percent.

I th i n k w h e n w e r e a d – i f my r e c o l l e c ti o n

s e r v e s m e r i g h t it m u s t b e p a r a g r a p h 8 0 I t h i n k .
ADV MAHLAPE SELL O : Of the memorandum?
M R C H A B I : O f th e m e m o r a n d u m .
10

C H A I R P E R S O N : W h a t p a g e is t h e m e m o r a n d u m a g a in ?
A D V M A H L A P E S E L L O : I t s t a r ts a t p a g e 1 6 5 .
CHAIRPERSON : 165.
A D V M A H L A P E S E L L O : C h a ir.
M R C H A B I : Ac t u a ll y I t h i n k it is p a r a g r a p h 5 6 .
A D V M A H L A P E S E L L O : Th a t i s t h e M P V a t 8 0 .
M R C H A B I : S o I w il l r e a d t h a t .
A D V M A H L A P E S E L L O : Tr y p a g e 1 7 1 .
M R C H A B I : O h s o r r y 1 7 5 I th in k i n my p a c k .
A D V M A H L A P E S E L L O : Yo u a t 1 7 5 ?

20

M R C H A B I : Ye s . I n m y b u n d le . P a r a g r a p h 5 6 .
A D V M A H L A P E S E L L O : O k a y. P a r a g r a p h 5 8 ?
M R C H A B I : W e ll w e w i ll s t a r t o n 5 6 I s u p p o s e .
A D V M A H L A P E S E L L O : O k a y.
M R C H A B I : A n d t h e n 5 8 . 5 6 s p e a k s t o t h e l o c a l c o n te n t . S o i t s a y s :
“ T h e h i g h le v e l o f l o c a l c o n t e n t b e in g 6 0 % ma k e s

Page 62 of 168

04 DECEMBER 2019 – DAY 196
lo c a l in d ic e s m o r e a p p lic a b l e t o a s s e s s t h e c o s t o f
e s c a l a t io n g o in g fo r w a r d .”
T h a t o f c o u r s e p r e s e n ts w i th a c h a l le n g e s i tt i n g o n t h e T r a n s n e t e n d
b e c a u s e th is s e r v e s to i n c r e a s e t h e c o s t a n d n o t r e d u c e th e c o s t . Yo u
h a v e – e v e n i f i t w a s 9 0 % l o c a l c o n t e n t i t w i ll s til l tr y t o r e d u c e t h e c o s t
b y e n s u r in g t h a t th e r e m a i n i n g 1 0 % h a s a l o w e r i n fl a ti o n r a te a p p l i e d to
it a n d n o t a p p ly t h e l o c a l in d ic e s a c r o s s t h e 1 0 0 % j u s t b e c a u s e y o u g o t
a h i g h lo c a l c o n t e n t. S o t h a t is o u r i n t e r p r e ta t io n o f 5 6 i n th is in s t a n c e .
N o t o n ly th a t n o t a l l l o c o m o ti v e s u p p li e r s , O E M ’s m e t t h e D G I
10

r e q u ir e m e n t s .
ADV MAHLAPE SELLO:

S o w h a t a r e – I t a k e o u t fr o m 5 6 is t h a t th e

m e m o r a n d u m a p p r e c i a te s th a t t h e m a n u f a c t u r e o f t h e l o c o m o ti v e s h a s
got a local and foreign component.
M R C H A B I : C o r r e c t.
ADV MAHLAPE SELLO:

A n d it w o r k s o n t h e b a s i s t h a t t h e lo c a l

c o m p o n e n t d is r e g a r d in g t h e s p e c i fic s o f w h a t th e O E M ’s h a d c o n t r a c t e d
f o r t h e y s h a l l w o r k o n th e b a s i s t h a t c o n s t it u t e s 6 0 % ? T h e lo c a l o f t h e
c o m p o n e n t o f a l l t h e lo c o m o t iv e s e q u a l 6 0 % t h a t i s w h a t t h e y a r e
s u g g e s t in g .
20

M R C H A B I : Ye s .
A D V M A H L A P E S E L L O : T h e d e t a il o f w h e t h e r o r n o t th e y a r e w r o n g o r
r ig h t i s n e i th e r h e r e n o r t h e r e b u t th is is t h e b a s i s o n w h i c h t h e y th e n
d o a c o m p u t a t i o n – th e y m u s t d o a c o m p u t a t i o n . A p p r e c i a ti n g t h e 6 0 %
lo c a l c o m p o n e n t . T h a t is o n ly 6 0 % i s l o c a l c o m p o n e n t .
M R C H A B I : C o r r e c t.

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04 DECEMBER 2019 – DAY 196
A D V M A H L A P E S E L L O : Yo u th e n w h e r e I th i n k l e a d i n g t o 5 8 w h ic h i s
n o t w i t h s t a n d in g w h a t is s e t o u t i n 5 6 a p p r e c i a ti n g t h a t 6 0 % c o n s t i tu t e s
lo c a l c o m p o n e n t w h a t th e m e m o r a n d u m a c t u a ll y d o e s in i n fl a te – in
c a l c u l a ti n g in f la t io n g o i n g f o r w a r d .
MR CHABI: Should I read that?
ADV MAHLAPE SELL O : Please do.
M R C H A B I: O k a y s o it s a y s :
“ H e n c e a C P I o f 6 % e s c a l a t e d f o r 3 5 m o n t h s w h ic h is
r o u g h l y t h r e e y e a r s o n a c o m p o u n d b a s is e x c lu d in g a
10

p r e m iu m f o r r is k r e s u lt s i n 1 8 . 5

–

a n 1 8 .5 4 %

in c r e a s e . T h a t i s t h e n e t t 1 6 . 8 % a s p e r E in t a b l e 2
a b o v e is r e a s o n a b l e . T h a t is b e c a u s e t h e 6 . 7 b il li o n
r e p r e s e n ts a 1 6 . 8 % i n c r e a s e .”
T h e p r o b le m w it h th a t is i t a s s u m e s t h a t a l l y o u r l o c o m o ti v e s a r e
p u r c h a s e d i n t h e 3 5 t h m o n t h . W e k n o w h o w e v e r th a t th e y a r e s p r e a d o u t
o v e r t h e d e l iv e r y p e r i o d o f th r e e t o fo u r y e a r s . S o t o h a v e t o c o m p a r e
1 8 . 6 – 1 6 .8 t o 1 8 o d d % is in c o r r e c t.
A D V M A H LA P E S E L L O :

O k a y. A n d – s o w h a t y o u a r e s u g g e s ti n g t o

t h e C h a ir is y o u t a k e is s u e w i t h th e m e th o d o f c o m p u t a ti o n o f th e
20

e s c a l a t io n g o i n g f o r w a r d .

I t is h o w i t w a s c a lc u l a te d t h a t y o u h a v e a

d i ff ic u l ty w i t h .
M R C H A B I : S o I ta k e is s u e w i th p o in t 5 8 w h i c h s e e ms to s u g g e s t t h a t
a l l l o c o m o tiv e s a r e a c q u ir e d in t h e la s t m o n th
A D V M A H L A P E S E L L O : Ye s .
M R C H A B I : I a ls o ta k e is s u e w i th p o i n t 5 6 w h ic h s e e m s t o s u g g e s t th a t

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a p p ly i n g l o c a l in f la t io n r a te s a c r o s s th e e n tir e b a tc h – a c r o s s th e l o c a l
a n d f o r e i g n c o m p o n e n t is t h e r i g h t w a y to g o a b o u t i t . W e k n o w t h a t i f
w e h a v e t o l o o k a t a 6 a n d 2 % - 6 lo c a l a n d 2 % a b r o a d th e d i ff e r e n t ia l
is 4 % i t is q u it e a s i g n i f ic a n t d i ff e r e n c e .
A D V M A H L A P E S E L L O : S o fo r y o u t o a r r i v e a t – a t 3 . 4 y o u a p p li e d t h e
S o u th A f r ic a n i n fl a ti o n r a te g o i n g fo r w a r d t o t h e 6 0 % o f t h e lo c o m o t iv e
price.
M R C H A B I : To t h e r e s p e c ti v e .
A D V M A H L A P E S E L L O : To e a c h .
10

MR CHABI:

C o r r e c t e a c h l o c o m o t iv e s u p p l i e r ’s r e s p e c tiv e l o c a l

c o n te n t d e c l a r a ti o n .

B e c a u s e t h e y d e c l a r e d i t in n e g o t ia t io n s t a g e s

w h a t th e ir f o r e i g n c o m p o n e n ts w o u l d b e in t h e t o t a l l o c o m o tiv e p r i c e .
A D V M A H L A P E S E L L O : T h e l e t u s l o o k a t w h a t is th e – w h a t r a n g e s
were they in?

What was the lowest of our – of local component and

w h a t w a s t h e h ig h e s t o ff e r a m o n g t h e O E M ’s ?
MR CHABI: The lowest was 36.7.
A D V M A H L A P E S E L L O : Ye s .
MR CHABI: And the highest I think was 49.6.
ADV MAHLAPE SELLO: 9?
20

M R C H A B I : .6 .
A D V M A H L A P E S E L L O : . 6 . S o y o u r 3 . 4 b i ll io n f o r f o r w a r d e s c a la t io n
is it b a s e d o n t h e a v e r a g e o f t h a t r a n g e o r is i t b a s e d o n t h e h ig h e s t o f
4 9 o r o n t h e lo w e s t o f 3 6 .
MR CHABI:

T h e r e s p e c ti v e .

S o w e c r e a t e d a n in d e x f o r th e l o c a l

in fl a ti o n .

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04 DECEMBER 2019 – DAY 196
A D V M A H L A P E S E L L O : Ye s .
M R C H A B I : As s u m p t io n a n d i n d e x f o r t h e fo r e ig n i n fl a ti o n a s s u m p t i o n .
Fr o m t h e r e w e t h e n w e n t o n to c r e a t in g a n i n d e x f o r e a c h O E M b a s e d o n
t h e ir l o c a l a n d f o r e i g n c o n t e n t d e c l a r a t io n s a n d t h a t w e a p p li e d t o t h e
p r i c e a n d t h e d e l iv e r y s c h e d u le .
ADV MAHLAPE SELLO:
b i ll io n ?

N o w d i d y o u tr y a n d r e a c h th e f i g u r e o f 6 . 7

D i d y o u d o a n y c a l c u l a t i o n t o s e e h o w t h e y a r r iv e d a t 6 . 7

b i ll io n ?
M R C H A B I : I d i d . S o t h e n u m b e r – th e w e i g h t e d a v e r a g e n u m b e r th a t
10

g iv e s u s 6 .7 b i ll i o n is a b o u t 7 .3 5 % .
A D V M A H L A P E S E L L O : O k a y. 7 .3 5 ?
MR CHABI: % yes.
A D V M A H L A P E S E L L O : O k a y. S o i n l a y m a n ’s te r m s d o w e t a k e i t th a t
t h e y a p p l i e d – w o u l d I b e c o r r e c t i f I s a y t h e y a p p li e d 6 % a c r o s s t h e
b o a r d o r is it 8 % a c r o s s t h e b o a r d ?
M R C H A B I : N o , n o s o n o t 6 b u t th e ir a p p r o a c h w a s e q u iv a le n t t o th e m
a p p ly i n g .
A D V M A H L A P E S E L L O : Ye s .
M R C H A B I : 7 . 3 5 % a c r o s s th e b o a r d .

20

A D V M A H L A P E S E L L O : O k a y.
M R C H A B I : I t is n o t t o s a y t h a t t h e y a p p li e d 7 .3 5 % l o c a lly.
ADV MAHLAPE SELL O : I am with you.
M R C H A B I : A n d 7 – i t c o u l d h a v e b e e n a n y c o m b i n a t i o n h o w e v e r th e
w e i g h t e d a v e r a g e o f t h a t w a s 7 .3 5 % .
A D V M A H L A P E S E L L O : A n d y o u s a y e q u iv a l e n t b e c a u s e w h e n y o u d o

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04 DECEMBER 2019 – DAY 196
t h a t e x e r c is e a t 7 . 3 5 % y o u t o o g e t t h e f ig u r e o f 6 .7 b i ll io n ?
M R C H A B I : C o r r e c t.
A D V M A H L A P E S E L L O : Is th a t – o k a y. N o w a r e y o u a b l e to e x p r e s s
a n o p i n i o n a s to t h e r e a s o n a b il i ty o r o t h e r w is e o f s u c h a n a p p r o a c h
u n d e r s t a n d in g th e i n tr ic a c i e s o f th is l o c o m o tiv e s a c q u is i ti o n p r o c e s s ?
M R C H A B I : In a n e g o t ia t io n p r o c e s s I g u e s s o n t h e s i d e o f Tr a n s n e t I
w i ll t r y a s m u c h a s p o s s i b le to r e d u c e t h e c o s t .

On the side of the

O E M ’s a s m u c h a s p o s s i b l e t o i n c r e a s e th e c o s t . H o w w e a r r iv e a t 7 %
a s a w e i g h te d a v e r a g e o n b o t h e n d s I d o n o t k n o w.
10

A D V M A H L A P E S E L L O : B u t i t is n o t o p e n f o r m e o r a Tr a n s n e t o ffi c i a l
t o d e c i d e t h a t I l ik e 7 % m o r e s o I a m g o i n g t o a p p ly 7 % a c r o s s t h e
b o a r d . Th e y a r e r e q u ir e d to c o m p ly w i t h t h e a p p li c a b l e i n fl a ti o n p o lic y.
M R C H A B I : C o r r e c t.
A D V M A H L A P E S E L L O : W h e t h e r i t is S o u th A fr ic a o r w h e t h e r i t is t h e
US?
M R C H A B I : C o r r e c t.
ADV MAHLAPE SELLO:

I d o n o t s e e m u c h o f t h a t h a p p e n i n g i n t h is

c a l c u l a ti o n . W o u l d I b e w r o n g i n c o n c l u d i n g t h a t?
M R C H A B I : I d o n o t s e e i t e i th e r.
20

A D V M A H LA P E S E L L O :

I d o n o t s e e a n a p p r e c i a ti o n o f a p p ly in g t h e

c o r r e c t in f la t io n p o lic y ?
MR CHABI: Oh yes. I agree with you.
A D V M A H L A P E S E L L O : A lr ig h t . W e t h e n d e a l w it h t h e n e x t i te m w h ic h
is f o r e x h e d g i n g a n d w e h a v e d is c u s s e d f o r e x h e d g i n g b e f o r e . T h is is
t h e f o r e x g o in g fo r w a r d r i g h t?

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04 DECEMBER 2019 – DAY 196
C H A I R P E R S O N : B e fo r e y o u p r o c e e d M s S e l lo .
A D V M A H L A P E S E L L O : Ye s C h a ir.
C H A I R P E R S O N : I k n o w w e h a v e t o d o j u s t ic e to M r C h a b i ’s e v id e n c e
w h ic h i s q u i t e i m p o r t a n t b u t w e m u s t k e e p a n e y e o n o u r t i m e
a l lo c a t io n . I w a n t t o c h e c k h o w w e a r e d o i n g ?
A D V M A H L A P E S E L L O : W e a r e d o in g v e r y w e l l C h a ir.
C H A I R P E R S O N : W e d o in g v e r y w e l l?
A D V M A H L A P E S E L L O : Ve r y, v e r y w e l l . T h a n k y o u C h a ir.
C H A I R P E R S O N : O u r t a r g e t w a s w h a t ti m e ?
10

ADV MAHLAPE SELL O : It was – we had three hours.
CHAIRPERSON : Hm.
ADV MAHLAPE SELLO:

W e w e r e b u d g e t e d t h r e e h o u r s w h ic h w o u l d

t a k e u s t o m id d a y b u t w e s a id w e w il l tr y a n d b r in g i t i n t w o a n d a h a l f .
C H A I R P E R S O N : J a I a m lo o k i n g a t t h e l a s t o n e n o t t h e fi r s t o n e .
A D V M A H L A P E S E L L O : Th a t w a s …
CHAIRPERSON :

I th in k y o u i n i ti a lly t o ld a b o u t tw e l v e o ’c l o c k w e

u l ti m a t e ly i f I r e m e m b e r c o r r e c tly w e e i t h e r e n d e d u p a t a i m i n g fo r
eleven or half past eleven.
A D V M A H L A P E S E L L O : N o w e a i m in g tw o a n d a h a l f. W e s a i d th a t is
20

w h a t w e w i ll p u s h t o a c h i e v e .
C H A I R P E R S O N : Ye s , n o t h a t is w h a t I a m ta lk in g a b o u t.
M R C H A B I : Ye s t w o a n d a h a l f .
CHAIRPERSON : Ja.
ADV MAHLAPE SELL O : Let us take it at half past eleven.
C H A I R P E R S O N : A n d t w o a n d a h a lf t a k e s u s to ?

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04 DECEMBER 2019 – DAY 196
A D V M A H L A P E S E L L O : H a l f p a s t e le v e n .
C H A I R P E R S O N : H a lf p a s t e l e v e n .
A D V M A H L A P E S E L L O : Ye s .
C H A I R P E R S O N : J a I t h i n k t h a t is w h a t is in m y m in d .
A D V M A H L A P E S E L L O : O k a y.
C H A I R P E R S O N : S o y o u s a y i n g w e d o i n g w e ll e v e n w i th t h a t ?
A D V M A H L A P E S E L L O : W e d o i n g o k a y.
C H A I R P E R S O N : O k a y. O k a y I ju s t w a n t t o m a k e s u r e t h a t w e a r e o n
the same page.
10

A D V M A H L A P E S E L L O : N o – b u t w e a r e s t il l a i m in g fo r t h a t t w o a n d a
half.
C H A I R P E R S O N : J a n o th a t i s f in e .
A D V M A H L A P E S E L L O : A n d w e j u s t m i g h t m a k e i t C h a ir.
C H A I R P E R S O N : J a n o th a t i s f in e .
A D V M A H L A P E S E L L O : I f e a r t h e C h a ir s h o u l d n o t h o ld m e s tr i c tly to
t w o a n d a h a l f s o – b u t I – i t i s s ti ll a n o b j e c ti v e o n m y p a r t .
CHAIRPERSON :

W e ll I – i t w o u l d b e I t h i n k i t w o u l d b e n ic e i f t h a t

t a r g e t c a n b e a c h ie v e d .
A D V M A H L A P E S E L L O : I w i ll tr y a n d d o b e tt e r t h a n th e ti m i n g .
20

CHAIRPERSON : Ja.
ADV MAHLAPE SELLO:

T h a n k y o u C h a i r.

T h e n t a lk i n g a b o u t fo r e x

h e d g i n g o n y o u r s l id e . W e d o n o t h a v e – y o u c o m e t o th e s a m e fi g u r e
a s th e m e m o r a n d u m ?
M R C H A B I : Ta k e t h e fi g u r e y e s .
A D V M A H L A P E S E L L O : J a th a t i s w h a t i s r e fl e c t e d t h e r e w h i c h m e a n s

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04 DECEMBER 2019 – DAY 196
y o u d o n o t ta k e is s u e w i th 2 .7 b i ll i o n ?
M R C H A B I : N o t – w e d o n o t t a k e is s u e w i t h t h a t y e s .
ADV MAHLAPE SELLO:

B u t th e r e is a n i s s u e w i t h t h a t.

P le a s e te ll

t h e C h a ir a b o u t it .
MR CHABI:

S o b a s e d o n t h e d e li v e r y s c h e d u l e p e r O E M u s i n g t h e

M a r c h – th e A p r i l 2 0 1 3 c u r v e w e g e t to a f i g u r e o f a b o u t 3 . 4 b i ll io n .
B e c a u s e w e a r e tr y i n g a s m u c h a s p o s s i b l e t o g e t t o t h is 2 . 7 b i lli o n .
W e c o u ld n o t u n d e r s t a n d h o w t h e y g o t t o i t .

Th e M a r c h – th e A p r il

2 0 1 3 C u r v e s h o w e v e r a r e n o t th e r i g h t c u r v e s to a p p ly i n t h is i n s t a n c e
10

s o w e t h o u g h t c o u l d t h e y h a v e a p p li e d a s li g h t p r e m i u m o n t o t h e c u r v e
to get them to 2.7?

W e t r i e d t o t e s t t h a t a n d t h a t is r o u g h l y 1 2 . 5 %

p r e m iu m t h a t y o u w o u ld h a v e t o a p p l y t o g e t t h a t c o n s i d e r in g th a t th e
U S D o l la r – th e r a n d d e p r e c ia t e d b y 1 8 % a g a in s t th e D o l la r a n d b y
a b o u t 2 4 % a g a i n s t t h e E u r o o v e r th a t p e r i o d .

We then went onto

s o u r c e t h e M a r c h 2 0 1 4 c u r v e s b e c a u s e t h o s e w o u ld b e t h e c o r r e c t
c u r v e s t o a p p ly o n t h a t a n d w e g o t to a f ig u r e o f R 3 .9 b il li o n . S o w e
c o u l d n o t m a k e s e n s e o f t h e R 2 . 7 b il li o n a p p li e d .

We thought okay

m a y b e it w a s a b e n e f it o f t h e n e g o ti a ti o n h o w e v e r i t i s n o t u n t h in k a b le
t o t h i n k t h a t t h e h e d g i n g c o s t s to h a v e t h e h e d g i n g c o s ts c o m e in lo w e r
20

t h a n w h a t i t w o u l d c o s t Tr a n s n e t t o h e d g e th e tr a n s a c t i o n s o n t h e
market.

R e a s o n b e in g e a c h O E M h a s i ts o w n c o s t s tr u c t u r e s .

If one

O E M d e c i d e s t o ta k e t h e r i s k o n h is b a l a n c e s h e e t t h e n h e c a n a ff o r d to
r e d u c e t h e c o s t to Tr a n s n e t. F o r e x a m p le if o n e O E M h a s a n o p e r a t io n
in S o u t h A f r ic a i t d o e s n o t n e e d to h a v e th e r a n d s c o n v e r t e d t o E u r o o r
t o U n i te d S t a t e s D o l la r s a n d b r o u g h t b a c k in t o t h a t c o r p o r a ti o n . I t is

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04 DECEMBER 2019 – DAY 196
u n n e c e s s a r y tr a n s a c ti o n c o s ts .

Th a t m e a n s it d o e s n o t c a r r y a n y

f o r e i g n c u r r e n c y r is k o n t h a t p o r ti o n o f r e v e n u e t h a t i t w i s h e s t o
a l lo c a t e to i ts s e c o n d a r y o p e r a ti o n w it h in t h e c o u n tr y.

If t h a t is t h e

c a s e w e c a n a ff o r d to l o w e r it s e ff e c ts h e d g i n g c o s t s . S o w e t o o k t h e
2 .7 a s i s a s o p p o s e d to t h e 3 .9 b i ll i o n t h a t w e g o t.
A D V M A H L A P E S E L L O : S o y o u r c a l c u la t i o n – a p r o p e r c a lc u l a ti o n f o r
f o r e x h e d g i n g c o s t g o i n g f o r w a r d w a s o v e r 3 b il li o n ?
M R C H A B I : I t w a s j u s t o v e r 3 b il li o n y e s .
A D V M A H LA P E S E L L O : T h e m e m o r a n d u m t e l ls y o u th a t i t is g o i n g t o
10

c o m e in a t 2 . 7 b il li o n .
M R C H A B I : C o r r e c t.
A D V M A H LA P E S E L L O : Yo u a c c e p t t h a t o n t w o b a s i s . Fir s t ly th a t i t is
lo w e r t h a n y o u r 3 b il li o n c a lc u l a ti o n .
M R C H A B I : Ye s .
A D V M A H L A P E S E L L O : O k a y a n d s e c o n d ly t h a t t h i s i s a c t u a l ly a r i s k
assumed by the OEM?
M R C H A B I : Ye s .
A D V M A H LA P E S E L L O :

S o i f t h e O E M is – m a d e a mi s ta k e a n d

n e g o ti a te d o n a w r o n g f o r e x h e d g i n g c o s t t h a t m is t a k e w i ll n o t – s h o u l d
20

n o t b y r ig h t i m p a c t Tr a n s n e t .
M R C H A B I : N o it s h o u l d n o t .
A D V M A H L A P E S E L L O : B e c a u s e t h a t i s w h a t t h e O E M o ff e r e d ?
MR CHABI:

A g r e e d to y e s .

T h a t is w h a t y o u s i g n e d o ff o n t h e

c o n tr a c t. A n d I t h i n k j u s t t o a d d t h e r e w a s r e a s o n w h y t h e fo r e x c u r v e
a c t u a ll y – w h y t h e c o s t s w e r e th a t h ig h . W e h a d a d e p r e c i a ti o n in th e

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04 DECEMBER 2019 – DAY 196
r a n d a n d n o t o n ly t h a t in t e r e s t r a t e s lo c a ll y w e n t u p a b r o a d w e n t d o w n
s o th a t i n c r e a s e d t h e h e d g in g c o s ts .
A D V M A H LA P E S E L L O :

O k a y.

N o w I d o n o t k n o w w h e t h e r i t is

t h r o u g h y o u r c o n tr o l o r th e t e c h n ic a l p e o p l e .

I d o n o t s e e th a t t h i s

m e m o r a n d u m – a g – t h e s l id e w e t a l k i n g a b o u t I d o n o t s e e i t o n t h e
s c r e e n . I f w e m a y b e c a u s e n o w w e a r e g e t ti n g to t h e e n d o f t h is e n t ir e
e x e r c is e . Yo u – t h e l a s t i t e m y o u d e a l w i t h is c o n ti n g e n c y a n d b y v ir tu e
o f i t b e i n g r e a d y o u t a k e is s u e w i t h i t ?
MR CHABI:
10

It i s a g a in a s w e m e n t io n e d e a r l ie r s i m p ly a a r i th m e t ic

e x e r c is e .
ADV MAHLAPE SELLO : Ja.
MR CHABI:

B u t o v e r a n d a b o v e th a t th e m e m o r a n d u m m a k e s c l e a r

w h a t t h e c o n t in g e n c i e s a r e f o r. I t is in r e s p e c t o f o p ti o n s , v a r i a ti o n s ,
spare

parts,

c a p i ta l

spares

in

g e n e r a l.

So

these

are

I

guess

c o m p o n e n ts r e l a ti n g to th e l o c o m o ti v e th a t m a y n e e d r e p l a c e m e n t in
f u t u r e I s u p p o s e . W h e n w e g o b a c k t o th e b u ff e r l e t t e r s w e c o m e t o a
t o t a lly d i ffe r e n t fi g u r e .

W e c o m e t o a b o u t 6 0 0 m il li o n w h e n w e t o ta l

t h o s e o p t io n s , s p a r e s , v a r i a t i o n a c r o s s a l l 1 0 6 4 b e c a u s e t h e O E M ’s
p r o v i d e u s w i t h i n fo r m a t i o n o n t h o s e . S o w e s i m p ly t o o k th e 2 . 2 b il li o n
20

fr o m t h e b u s i n e s s c a s e a n d ju s t a d d e d t h e s p a r e s w h ic h c o u l d h a v e
b e e n a d u p lic a ti o n o f c o s ts b u t n o n e th e le s s w e t h o u g h t 2 . 8 w o u l d h a v e
b e e n a m o r e r e a s o n a b l e n u m b e r a s a c o n ti n g e n c y a s o p p o s e d t o 4 . 9
b i ll io n . Th e 4 . 9 b il li o n is 1 0 % a c r o s s t h e e n t ir e li n e i te m s th a t y o u s e e
in t h e m e m o r a n d u m . C o n ti n g e n c y c o s ts u s u a ll y w i th in t h e r e g io n o f 5
t o 1 0 % o n p r o je c t s . 1 0 % f o r h ig h l y r is k y p r o j e c ts a n d 5 % f o r p r o j e c t s

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04 DECEMBER 2019 – DAY 196
w i t h i n a n a c c e p t a b l e le v e l o f r is k . T h a t 2 . 8 r e p r e s e n t s a b o u t 7 % o f t h e
c a p i t a l c o s t o f b a s e lo c o m o t iv e p r i c e . S o w e a ls o t h o u g h t 7 % is n o t a
b a d fi g u r e it s i ts i n w e l l b e t w e e n 5 a n d 1 0 % . To h a v e to t a k e i n t h i s
in s t a n c e o n p r o j e c t w h e r e y o u h a v e y o u a r e p r e t t y c e r t a i n a b o u t y o u r
r is k y o u h a v e m i t ig a t e d th e m w e ll .

Yo u h a v e tr a n s f e r r e d t h e i n fl a ti o n

r is k t o y o u r O E M . Yo u h a v e tr a n s f e r r e d t h e c u r r e n c y r i s k t o y o u r O E M .
Yo u h a v e a d ju s te d f o r e c o n o m i c c o n d i ti o n s u p t o M a r c h 2 0 1 4 . To t h e n
t a k e a n a d d i ti o n a l 1 0 % o n t h o s e e s c a l a ti o n c o s t s a n d t h o s e fo r e x c o s t s
in o u r v i e w w a s u n n e c e s s a r y. I t i s s i m il a r t o y o u p u r c h a s i n g i n s u r a n c e
10

o n y o u r m o t o r v e h ic l e a n d t h e n s e t t in g a s i d e a r e s e r v e d [i n d i s t i n c t ] fo r
t h e s a m e r i s k b u t y o u h a v e tr a n s f e r r e d t h e r is k t o t h e i n s u r e r s o t h e r e
is n o n e e d f o r y o u t o a g a i n s e t a s i d e p r e m iu m s e v e r y m o n th fo r t h e
s a m e r is k w h ic h is e s s e n t i a ll y w h a t w e s e e m to b e o b s e r v i n g h e r e . I f
1 2 0 % i f ta k e n o ff t h e e s c a l a ti o n a n d o ff …
ADV MAHLAPE SELLO:

S o t h e c o n ti n g e n c y is a p r o v is i o n f o r s o m e

r is k s th a t m a y a r is e i n t h e fu t u r e th a t is n o t c a t e r e d f o r i n th e
c a l c u l a ti o n y o u k n o w b u t y o u a r e s a y i n g t h a t i n s o fa r a s f o r e x a n d
e s c a l a t io n g o i n g f o r w a r d a r e c o n c e r n e d Tr a n s n e t c a n n o t f a c e a r is k o n
t h a t b e c a u s e th o s e a r e tr a n s f e r r e d t o t h e m a n u f a c t u r e r s ?
20

M R C H A B I : C o r r e c t.
ADV MAHLAPE SELLO:

S o i t s h o u l d n o t b e – t h e c o s t a s s o c ia t e d

t h e r e w i t h s h o u l d n o t b e t a k e n in t o c o n s i d e r a t i o n w h e n w e a r e tr y in g t o
d e t e r m i n e t h e c o n ti n g e n c y w h ic h m u s t p r o v id e f o r i n t h is ?
MR CHABI:

A n d t h e c o n ti n g e n c y a l s o in c l u d e s 1 0 % o f y o u r b a tc h

p r i c i n g a d j u s t m e n t w h ic h is a p e n a l ty t h a t h a s b e e n l e v i e d o n t o

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04 DECEMBER 2019 – DAY 196
Tr a n s n e t. S o t h e r e is n o r e a s o n …
A D V M A H L A P E S E L L O : A n d y o u s t il l t a k e a c o n ti n g e n c y f o r i t?
MR CHABI: On it.
ADV MAHLAPE SELLO:

O k a y.

Yo u t h e n d r a w c o n c lu s i o n s .

Yo u

c o m p a r e t h e p r ic e , t h e b u s i n e s s c a s e p r i c e w h i c h is 3 8 . 6 b i ll io n a f te r
a l l t h i s e x e r c is e a n d y o u s a y t h e b u s i n e s s c a s e a r r i v e d a t 3 8 . 6 , y o u
a r r iv e d a t 4 5 .3 b i ll i o n a n d t h e m e m o r a n d u m a r r iv e d a t 5 4 . 5 b il li o n .
M R C H A B I : C o r r e c t.
ADV MAHLAPE SELLO:
10

A n d a t t h e b o t t o m th e r e y o u in d ic a te w i t h a

g r e e n a m o u n t o f 6 .8 b il li o n . T h a t is a d i ff e r e n c e b e tw e e n y o u r
c a l c u l a ti o n – t h e i n c r e a s e fr o m t h e b u s i n e s s – t h e 3 8 . 6 b i ll io n o f th e
b u s i n e s s c a s e to y o u r w o r k e d o u t f ig u r e ?
M R C H A B I : C o r r e c t.
A D V M A H LA P E S E L L O :

And then you compare in red the business

case and the memorandum.

S o y o u a r r iv e a t 6 . 8 t h e m e m o r a n d u m

a r r iv e s a t 1 5 . 9 b il li o n .
M R C H A B I : C o r r e c t.
ADV MAHLAPE SELLO:
memorandum.
20

A n d t h is i s a s u m m a r y i n p a r t o f t h e

Yo u r e m e m b e r w e s t a r t e d t h is c o n v e r s a t i o n w it h a 6 .5

b i ll io n s a v in g ?
M R C H A B I : C o r r e c t.
ADV MAHLAPE SELLO:

S h o u ld i t n o t b e r e fl e c t e d s o m e w h e r e a n d I

s a y i f m y to t a l is 4 . 5 b il li o n I s h o u ld r e d u c e i t b y 6 . 5 b il li o n a s a s a v i n g
o r h o w w o u ld I w o r k w it h t h a t ?

Where do I see a saving?

We

u n d e r s t o o d t h e m i d d l e c o l u m n t o r e fl e c t f ig u r e s ta k e n fr o m ta b le 2 a t

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04 DECEMBER 2019 – DAY 196
p a g e 1 6 9 .1 – 1 6 9 .1 . Yo u r e m e m b e r ? Ta b l e 2 .
M R C H A B I : C o r r e c t.
ADV MAHLAPE SELLO:

O k a y.

s e e t h e s a v in g o f 6 . 5 b i ll io n .

N o w I lo o k a t t a b l e t w o .

I - I do not

W h a t is - I d o n o t s e e a li n e i t e m th a t

e v e n c a ll s a s a v in g .
M R C H A B I:

Correct.

U n l e s s t h e ta b le t w o is t h e r e s u l t a f t e r t h e

s a v in g .
A D V M A H L A P E S E L L O : S o b y t h e ti m e t a b l e t w o y o u a r e s u g g e s ti n g is
c r e a te d t h e s a v i n g h a s b e e n a c h i e v e d ?
10

M R C H A B I: T h a t is a s y o u …
A D V M A H L A P E S E L L O : W h e r e w o u l d i t b e p la c e d ? Th e s a v i n g .
M R C H A B I: I g u e s s th e q u e s ti o n t h e n w o u l d b e in w h ic h li n e it e m w a s
the saving achieved.
A D V M A H L A P E S E L L O : Ye s .
M R C H A B I: W o u l d i t h a v e b e e n i n …
A D V M A H L A P E S E L L O : O k a y.
M R C H A B I: T h e T E s c o p e .
A D V M A H L A P E S E L L O : A p p r o a c h i n g it th a t w a y t h e n . Ar e y o u a b le to
p o i n t u s t o a l i n e i te m ?

20

M R C H A B I: I a m n o t .
A D V M A H L A P E S E L L O : O k a y a n d in y o u r s li d e s o v e r l e a f a t 2 3 - a t 2 2 .
N o . Yo u w o u l d b e 2 3 . I d o n o t k n o w w h y o u r n u m b e r in g is d i ff e r e n t.
Yo u s a y a n o p in i o n o n a r e a s o n a b l e E T C , b u t y o u - y o u q u a l i fy w i t h o u t
T E c o s ts .

T h e C h a ir w i ll r e c a l l th a t y o u h a d a c c e p te d th e T E c o s ts -

t h e a d d i t io n a l T E c o s t s o f e ig h t - 8 0 0 m il li o n . R ig h t a n d t h e o r i g in a l T E

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04 DECEMBER 2019 – DAY 196
c o s t o f 1 . 7 b il li o n …
M R C H A B I: C o r r e c t.
A D V M A H L A P E S E L L O : A n d t h a t is w h a t le d y o u i n th e p r e v i o u s s li d e
t o a to t a l o f 4 5 . 3 b il li o n a s a n E T C ?
M R C H A B I: T h a t is c o r r e c t .
A D V M A H L A P E S E L L O : O n t h is li n e a l l y o u a r e d o i n g is b e c a u s e y o u r
a c c e p ta n c e o f th o s e c o s t s i s c o n d i ti o n a l u p o n t h e r e s u l ts o f t h e
in v e s t i g a t io n

c u r r e n tl y

being

undertaken

by

MNS.

Should

the

in v e s t i g a t io n s r e s u lt d e m o n s tr a t e t h a t T E c o s ts w h e t h e r th e o r i g in a l o r
10

a d d it i o n a l s h o u ld n o t f o r m p a r t o f th e E T C ? W h a t y o u a r e d o i n g h e r e is
taking them out.
M R C H A B I: C o r r e c t a n d …
A D V M A H L A P E S E L L O : A n d y o u s a y in t h a t c a s e t h e n m y E T C w o u ld
d r o p fr o m 4 5 t o 4 2 b i ll io n ?
M R C H A B I: C o r r e c t.
ADV MAHLAPE SELLO:

A n d w h e r e a s p r e v io u s ly th e r e w a s a - t h e

in c r e a s e fr o m t h e 3 8 .6 b i ll io n t a k i n g i n to c o n s id e r a ti o n T E c o s t s
r e l a ti v e t o y o u r c a lc u la t io n w a s 6 . 8 b il li o n . W h e n y o u t a k e o u t t h e T E
r e l a t e d c o s t s t h e - t h e e s c a l a ti o n d r o p s d o w n t o 4 . 2 b il li o n ?
20

M R C H A B I: T h a t is c o r r e c t .
ADV MAHLAPE SELLO:

B u t w e k n o w t h a t th e - t h e a c t u a l e s c a la t io n

e ffe c t e d w a s 1 5 .9 b i ll io n ?
M R C H A B I: T h a t is c o r r e c t .
ADV MAHLAPE SELLO:

C h a ir I t h i n k t h a t b r i n g s u s a c t u a l ly to -

a r o u n d i n a s li g h t ly d i ff e r e n t w a y.

W e h a v e w o r k e d th r o u g h t h e

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04 DECEMBER 2019 – DAY 196
s t a te m e n t .
CHAIRPERSON : Ja.
ADV MAHLAPE SELLO: Hm.
C H A I R P E R S O N : O k a y.
ADV MAHLAPE SELLO:

A n d j u s t a q u e s ti o n .

Is t h e r e a n y t h i n g e ls e

y o u w o u l d li k e t o b r in g to t h e C h a ir ’s a t te n ti o n ? H e h a s g o t y o u r - y o u r
s t a te m e n t a n d y o u r p r e s e n ta t io n a n d y o u r tr a n s c r i p t a lr e a d y. I s t h e r e
a n y th in g i n p a r ti c u l a r y o u w o u l d li k e t o b r i n g t o h i s a t te n ti o n a s r e g a r d s
t h is 1 0 6 4 t r a n s a c t io n a n d t h e m a n d a t e y o u h a d t h a t p e r h a p s w e h a v e 10

y o u - y o u f e e l w e h a v e n o t c o v e r e d i n s u ffi c ie n t d e t a i l t h a t is i m p o r t a n t?
M R C H A B I:

W e ll I s u p p o s e m a y b e tw o a d d it i o n a l i n c l u s io n s i n t h e

s t a te m e n t .
A D V M A H L A P E S E L L O : Ye s .
M R C H A B I: I g u e s s t h e h u r d l e r a t e a n d N P V c o m p u ta t io n . I t h i n k t h a t
w a s a d d r e s s e d in - a t t h e v e r y h i g h l e v e l i n th e s t a te m e n t .

So the

p r o f i ta b il it y o f th e p r o je c t a f te r t h e c h a n g e in t h e d e li v e r y s c h e d u l e
fr o m s e v e n t o t h r e e to f o u r y e a r s .
A D V M A H L A P E S E L L O : O k a y. Yo u a r e q u i t e c o r r e c t a n d t h a n k y o u f o r
b r i n g i n g th a t t o m y a t t e n t i o n .
20

Let me just recap then you - you can

e x p l a i n to t h e C h a ir w h a t i t is y o u a r e ta l k in g a b o u t. C h a ir w il l r e c a ll
t h a t th e 3 8 . 6 b il li o n - E T C p r o d u c e d a N P V. A p r o f i t o f 2 .7 b i ll io n …
M R C H A B I: C o r r e c t.
ADV MAHLAPE SELLO:

A n d th a t w a s a p p ly in g t h e h u r d l e r a t e a n d

1 8 . 5 6 p e r c e n t. C o r r e c t?
M R C H A B I: T h a t is c o r r e c t .

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04 DECEMBER 2019 – DAY 196
A D V M A H L A P E S E L L O : A n d w e k n o w t h a t w e g e t th e h u r d l e r a t e fr o m
t h e w o r k p o lic y.
M R C H A B I: T h e W o r k a n d H u r d le R a t e P o lic y.
A D V M A H L A P E S E L L O : W o r k a n d H u r d le R a t e P o l ic y o f Tr a n s n e t?
M R C H A B I: C o r r e c t.
A D V M A H L A P E S E L L O : T h a t p o l ic y t e l ls u s w h e n y o u a r e d e a li n g w it h
G r e e n f ie l d s Pr o je c t s y o u u s e a h u r d l e r a t e o f 1 8 .5 6 p e r c e n t ?
M R C H A B I: F o r T F R . Ye s .
A D V M A H L A P E S E L L O : O k a y. S o i t is a b in d in g k i n d o f r e q u ir e m e n t.
10

S o i t w o u l d m a k e s e n s e t h a t in t h e c o m p u t a t i o n o f 3 8 . 6 p e r c e n t - 3 8 . 6
b i ll io n th e y w o u l d u s e th a t h u r d le r a t e ?
M R C H A B I: C o r r e c t.
ADV MAHLAPE SELLO:

N o w w e a r e a d j u s ti n g t h is t o 5 4 .

B il li o n p e r th e m e m o r a n d u m .

O k a y.

T h e r e w e r e c h a n g e s t o t h e r a te - t h e

h u r d le r a te a p p l i e d . Tw o q u e s t io n s . A p p l y in g t h e h u r d l e r a t e o f 1 8 . 5 6
p e r c e n t . W h a t w a s th e - w h a t w a s t h e r e s u l t N P V ? T h a t is t h e f ir s t a n d
s e c o n d , w h a t c h a n g e s - a n d s e c o n d ly w h e t h e r t h is p r o j e c t i n t h e e n d is
p r e s e n t e d t o t h e B o a r d a s a p r o fi t a b l e p r o j e c t a n d t h e b a s i s f o r s u c h
c o n te n ti o n . L e t u s s t a r t w i t h t h e f ir s t .
20

M R C H A B I: O k a y. S o a p p l y i n g t h e r a te o f 1 8 .5 6 a n d t h e m e m o r a n d u m
c le a r ly s t a te s th a t .
lo s s m a k in g .

I t r e s u lt e d i n th e p r o je c t t u r n i n g l o s s - b e c o m in g

S o tu r n in g - t h e N P V t u r n i n g n e g a t iv e a n d I t h i n k it

a tt r i b u t a b l e v a lu e o f R 1 .6 7 b i ll i o n .

The correctness of that was not

v e r i fi e d b e c a u s e t h e m o d e l ( i n d is ti n c t) t h a t w a s n o t p r o v i d e d to u s .
T h e h u r d le r a te th e n h a d t o b e c h a n g e d t o 1 5 . 2 p e r c e n t . S o

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04 DECEMBER 2019 – DAY 196
it s a y s n o t - n o t h a d t o b e c h a n g e d . I t s a y s u s i n g a h u r d le r a t e o f 1 5 . 2
p e r c e n t t h e p r o j e c t b e c o m e s p r o f it a b l e a t R 1 2 b il li o n .
c h a l le n g e h e r e i s w h y a h u r d l e r a t e o f 1 5 .2 p e r c e n t .

I j u s t th e

When the rate

a p p lic a b l e a t t h e t i m e w a s 1 8 .5 6 a n d I s u p p o s e t h a t s ti ll n e e d s t o b e
answered.
W e th e n tr ie d to fi n d p o li c i e s th a t s p o k e t o th e 1 5 .2 h u r d le
r a te .

We could not come across one.

We however came across a

p o li c y th a t r e f e r r e d t o 1 6 . 2 p e r c e n t , b u t t h a t w a s o n l y a p p l ic a b le a f te r
t h e c o n c lu s i o n o f th e tr a n s a c t io n .
10

ADV MAHLAPE SELLO:

I f - if I m a y j u s t p e r h a p s i n t e r j e c t .

In t h e

m e m o r a n d u m s ti ll a t p a g e 1 7 8 p a r a g r a p h s 7 7 a n d 7 8 d e a l w i t h - w i th
t h e s e a s p e c ts .

I t m ig h t b e i m p o r t a n t t o g o t o th a t .

At 77 the

memorandum states that:
“ T h e b u s i n e s s c a s e r e s u l t e d i n a p o s i t iv e N P V ( 2 .7
b i ll io n ) a n d t h e T F R h a d a r a te o f 1 8 . 5 6 p e r c e n t a n d
3 4 . 1 b il li o n a t t h e r a te o f 1 2 . 5 6 .”
O k a y.
M R C H A B I: C o r r e c t.
ADV MAHLAPE SELLO:
20

B u t w e k n o w th a t w e - w e c o u l d n e v e r h a v e

a c h i e v e d a n N P V o f 3 4 . 1 b i ll i o n , b e c a u s e th e p o l ic y r e q u i r e d u s t o
a p p ly 1 8 . 6 - 1 8 .5 6 ?
M R C H A B I: C o r r e c t.
A D V M A H L A P E S E L L O : S o w e c o u ld o n ly g e t 2 . 7 b il li o n . A t 7 9 - a t 7 8
r a th e r. Th e m e m o r a n d u m s t a t e s :
“ T h e Tr a n s n e t H u r d l e R a t e h a s s i n c e b e e n a m e n d e d

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04 DECEMBER 2019 – DAY 196
t o 1 5 .2 p e r c e n t a n d t h e N P V a t t h i s h u r d l e r a t e
u s i n g t h e b u s i n e s s c a s e a s s u m p ti o n s w o u l d b e 1 6 . 2
b i ll io n .”
S o tw o th i n g s h e r e .

7 8 - p a r a g r a p h 7 8 s u g g e s ts t h a t

Tr a n s n e t h a s r e lo o k e d i ts h u r d l e r a t e a n d t h e n e w p o l ic y p r o v id e s f o r a
15.2 percent hurdle rate. Do you agree?

T h a t is w h a t t h e p a r a g r a p h

suggests.
M R C H A B I: C o r r e c t.
ADV MAHLAPE SELLO:
10

H a v e y o u s e e n s u c h a p o li c y r e f le c ti n g a

h u r d le r a t e o f 1 5 . 2 p e r c e n t ?
M R C H A B I: N o .
A D V M A H L A P E S E L L O : H a v e y o u in q u ir e d a s t o w h e th e r it e x is t e d a t
t h e ti m e ?
M R C H A B I: Ye s .
A D V M A H L A P E S E L L O : A n d w h a t r e s p o n s e d id y o u g e t ?
M R C H A B I:

W e g o t p r o v i d e d a ll t h e p o li c ie s t h a t a p p li e d a n d n o n e o f

t h e m m a d e r e fe r e n c e to 1 5 . 2 .
A D V M A H L A P E S E L L O : I w il l a s k a q u e s ti o n p e r h a p s to w h i c h y o u d o
not know the answer?
20

W h e r e d o y o u t h i n k th e 1 5 . 2 p e r c e n t a p p l i e d

h e r e c a m e fr o m ?
M R C H A B I: I h a v e n o id e a .
A D V M A H L A P E S E L L O : C o n j e c t u r e . O k a y. I a m in v i ti n g th a t , b u t t h e n
a c c e p ti n g t h a t t h e y d e c id e d to u s e a 1 5 .2 p e r c e n t h u r d l e r a t e t h e
p r o j e c t a c tu a l ly h a s i m p r o v e d b y - w i th p r o fi t a b il it y, b e c a u s e n o w i t - i t
g iv e s a n N P V o f 1 6 b il li o n .

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M R C H A B I:

W h ic h is i n c o n tr a d ic ti o n t o p a r a g r a p h 7 o f t h e s a m e

m e m o r a n d u m w h ic h s p e a k s to 11 . 6 8 b il li o n , b u t t h a t c o u l d h a v e b e e n a
ty p i n g e r r o r.
ADV MAHLAPE SELLO:

O k a y.

S o t h e - w o u ld I b e c o r r e c t i n

u n d e r s t a n d in g th e m e m o r a n d u m to s u g g e s t t h a t a t 5 0 - a t a c o s t o f 5 4
b i ll io n t h e p r o je c t is m o r e p r o f it a b l e t o Tr a n s n e t t h a n a t a c o s t o f 3 8
b i ll io n , b e c a u s e a t 3 8 b il li o n I k n o w I a m g o i n g t o m a k e N P V o f 2 .7
b i ll io n , b u t a t 5 4 I a m g o i n g t o m a k e a - a N P V o f 1 6 b i ll io n .
M R C H A B I: C o r r e c t.
10

ADV MAHLAPE SELLO:

Can you explain that?

T h e r a t i o n a l e b e h in d

that. I - I do not understa nd.
M R C H A B I: I t w o u l d b e v e r y d i ff ic u l t to e x p l a i n .
A D V M A H L A P E S E L L O : O k a y a n d a ll t h a t i m p r o v e d N P V i s - is a s a is a r e s u l t o f m a n i p u l a t i o n o f t h e a p p l ic a b le h u r d le r a te . Th a t is a ll i t
is .
M R C H A B I: I t c o u ld b e .
ADV MAHLAPE SELLO:

No.

I s a y t h i s o n th e b a s is t h a t i f I a p p l ie d

1 8 . 5 6 p e r c e n t h u r d l e r a t e t h e n I a m i n a lo s s m a k i n g p o s i ti o n .
M R C H A B I: C o r r e c t.
20

ADV MAHLAPE SELLO:

In order to get a profit of 16.02 I must

m a s s a g e th a t h u r d l e r a te a n d b r i n g i t d o w n t o 1 5 . 2 . T h a t is w h a t g iv e s
m e m a t h e m a t ic a l ly a n N P V o f 1 6 b i ll i o n .
M R C H A B I: C o r r e c t.
ADV MAHLAPE SELLO:

O k a y.

O k a y.

I - I th in k t h a t w a s - t h a t w a s

q u i te i m p o r t a n t a n d I o v e r l o o k e d i t i n a b i d t o m e e t m y c o m m i t m e n t t o

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04 DECEMBER 2019 – DAY 196
t h e D C J a n d t h a n k y o u - t o th e C h a ir a n d t h a n k y o u f o r p o in t in g i t o u t .
Is t h e r e s o m e t h i n g e ls e ?
M R C H A B I: W e ll t h e y a ls o p r o v i d e a v i e w o n t h e ( i n d is t in c t ) o f t h e 6 . 5
b i ll io n i n t h e s t a t e m e n t - I t h i n k - f o r t h e C h a ir t o c o n s i d e r w h e n correct.
CHAIRPERSON :

Ja.

W e - y o u c o u l d fi n d t h a t t h e r e a r e r e q u e s ts f o r

c la r i fi c a t io n o f p a r t o f y o u r e v i d e n c e a f t e r I h a v e g o n e t h r o u g h t h e
tr a n s c r ip t a n d e v e r y t h i n g i n d u e c o u r s e .
M R C H A B I: O k a y.
10

C H A I R P E R S O N : O k a y.
A D V M A H L A P E S E L L O : C h a ir a q u ic k o n e . Th e C h a ir w il l r e c a ll w e w h e n w e s t a r t e d w e s a i d w e a r e d e a li n g w i t h t w o t r a n s a c t io n s .
C H A I R P E R S O N : Ye s .
A D V M A H L A P E S E L L O : Th e 1 0 6 4 t r a n s a c ti o n a n d t h e 1 0 0 t r a n s a c t io n .
C H A I R P E R S O N : Ye s .
A D V M A H L A P E S E L L O : Th e s t a te m e n t t o th e 1 0 0 tr a n s a c ti o n a p p e a r s
u n d e r ta b tw o …
C H A I R P E R S O N : Ye s .
ADV MAHLAPE SELLO: Of BB8B2.

20

C H A I R P E R S O N : Ye s .
A D V M A H L A P E S E L L O : Th is i s a m u c h …
C H A I R P E R S O N : U n d e r t a b tw o ?
A D V M A H L A P E S E L L O : Tw o - t a b tw o .
CHAIRPERSON : Ja.
A D V M A H L A P E S E L L O : I t i s a m u c h s m a l le r tr a n s a c ti o n …

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04 DECEMBER 2019 – DAY 196
CHAIRPERSON : Ja.
A D V M A H L A P E S E L L O : A n d - a n d i n t h e i n te r e s t o f ti m e I t h in k I c a n
e x p l a i n t o th e C h a ir t h a t i n s c o p e M r C h a b i’s m a n d a te w a s n a r r o w e r. I f
o n e c o m p a r e s it to t h e 1 0 6 4 tr a n s a c ti o n . H i s m a n d a t e a p p e a r s a t p a g e
6 o f t h a t p a r a g r a p h 2 a n d i t w a s - b e f o r e I s a y th a t . Tr a n s a c t io n 1 0 0
a ls o e x p e r i e n c e d a c h a n g e - a n in c r e a s e in E T C .

It was a movement

fr o m a 3 . 8 b il li o n B o a r d a p p r o v e d E T C t o a 4 . 8 4 b il li o n . A y e a r l a t e r.
S o M r C h a b i ’s m a n d a t e a s s e t o u t i n h is - h i s p a r a g r a p h 2
w a s t o i d e n t i fy th e r e a s o n s f o r th a t m o v e m e n t t o te s t t h e p o s s i b i li ty 10

t h e r e a s o n s p u t f o r w a r d f o r t h a t a n d to g iv e a - a n o p i n i o n a s t o t h e
r e a s o n a b i li ty o f th e i n c r e a s e i n E T C . Th e - t h a t p a r ti c u l a r tr a n s a c ti o n
a s w e ll in A n n e x u r e A O C 1 s ta r t i n g a t 0 - n o .
At page 22 was based on a memorandum to the Board
s e e k i n g a p p r o v a l f o r t h e i n c r e a s e i n th e E T C . S i g n e d a t p a g e 3 6 o v e r a
p e r i o d o f w h a t w o u l d lo o k l ik e t h e 2 2 n d t o 2 3 M a y 2 0 1 4 . M u c h li k e th e
memorandum for the 1064 increase.
C H A I R P E R S O N : I a m s o r r y. I a m - I a m l o o k i n g a t th e w r o n g …
ADV MAHLAPE SELLO:

W e a r e in t h e s t a t e m e n t .

W e a r e i n th e

s e c o n d - b e h i n d t h e s e c o n d t a b . W e a r e i n th e s e c o n d t a b n o w.
20

C H A I R P E R S O N : S a m e - s a m e b u n d l e th a t h a s h is s t a t e m e n t ?
A D V M A H L A P E S E L L O : Th a t h a s h i s s ta t e m e n t .
C H A I R P E R S O N : A n d t h e n ta b 2 ?
A D V M A H L A P E S E L L O : I t is fo ll o w e d b y - n o , n o , n o . W e a r e a t t a b
t w o fi r s t . T h e c a r d b o a r d t a b .
CHAIRPERSON : Ja.

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04 DECEMBER 2019 – DAY 196
ADV MAHLAPE SELLO:

Ye s .

Th e n w e g e t h is s t a t e m e n t a s r e g a r d s

1 0 0 a n d i f y o u g o t o p a g e - t h a t - t h a t s t a te m e n t s t a r ts p a g i n a t i o n a ll
over again.
C H A I R P E R S O N : O k a y. L e t - l e t u s s ta r t a fr e s h .
ADV MAHLAPE SELLO: Ja.
C H A I R P E R S O N : O k a y. T h is is t h e e x h i b it . Th is i s t h e b u n d le t h a t h a s
g o t Mr C h a b i ’s s t a te m e n t . Is t h a t th e c o r r e c t o n e y o u w a n t m e to l o o k
a t?
A D V M A H L A P E S E L L O : M a y I s a y i t c o n t a i n s M r C h a b i ’s s t a t e m e n t .
10

C H A I R P E R S O N : A n d t h e n w e g o t o ta b tw o ?
A D V M A H L A P E S E L L O : Ta b t w o .
C H A I R P E R S O N : R i g h t . W h ic h i s a t p a g e …
A D V M A H L A P E S E L L O : C h a ir. N o , n o , n o . D o n o t . T h e C h a i r s h o u l d
n o t l o o k a t t h e p l a s t ic f l a g s .

T h o s e a r e a n n e x u r e s to M r C h a b i ’s f ir s t

s t a te m e n t . Wa y b e h in d t h e a n n e x u r e s i s a ta b .
C H A I R P E R S O N : Yo u p e o p l e .
ADV MAHLAPE SELL O: Marked two and yes we have taken note that I
c a n n o t s a y t h a t o u r c o lo u r s o f t h e t a b s h o u l d b e d i ffe r e n t. I t s h o u ld b e
t h e s a m e c o lo u r.
20

C H A I R P E R S O N : B u t a ls o t h e - t h e t a b s h o u ld n o t b e o b s c u r e d b y t h e
annexures.
A D V M A H L A P E S E L L O : Ye s . T h e f la g s f o r t h e a n n e x u r e s .
CHAIRPERSON :

Th e - th e t a b s to t h e a n n e x u r e s . T h e - th e d i v i d e r s

m u s t s t a n d o u t.
ADV MAHLAPE SELLO:

W e w il l r e q u e s t l o n g e r d iv i d e r s s o t h a t y o u

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04 DECEMBER 2019 – DAY 196
k n o w t h e e y e w i ll j u s t f a l l o n t h e d iv id e r.
C H A I R P E R S O N : It - i t m a k e s l i fe e a s i e r.
A D V M A H L A P E S E L L O : Th a n k y o u C h a ir. I w il l … ( in t e r v e n e s ) .
C H A I R P E R S O N : Ye s . O k a y.
A D V M A H L A P E S E L L O : S o w e a r e n o w i n ta b tw o a n d …
C H A I R P E R S O N : Ye s .
ADV MAHLAPE SELLO:

Th e C h a ir w il l s e e t h a t i s a s t a t e m e n t i n

r e l a ti o n t o 1 0 0 .
CHAIRPERSON : Ja.
10

A D V M A H L A P E S E L L O : 1 0 0 tr a n s a c ti o n .
CHAIRPERSON : Hm.
A D V M A H L A P E S E L L O : I t is a 2 1 p a g e s t a t e m e n t a n d a t - fr o m p a g e
2 2 is a s in g u l a r a n n e x u r e t h a t M r C h a b i r e l i e s o n .

T h e p o in t I w a s

m a k i n g is i f t h e C h a ir g o e s t o p a g e 3 6 t h a t is a s i g n a t u r e p a g e . I t a l s o
is a m e m o r a n d u m p r e p a r e d b y t h e G r o u p C h i e f F in a n c ia l O ffi c e r. T h e
Tr a n s n e t Fr e i g h t C h i e f E x e c u t iv e a n d t h e G r o u p C h i e f E x e c u ti v e
O ff ic e r.

S i g n e d i t w o u ld a p p e a r s o m e w h e r e i n t h e p e r io d t h e 2 1 s t -

between 21 May …
C H A I R P E R S O N : R e c o m m e n d e d b y t h e s a m e t h r e e o ffic i a ls ?
20

A D V M A H L A P E S E L L O : A s - a s w it h t h e 1 0 6 4 …
CHAIRPERSON : Ja.
ADV MAHLAPE SELLO:

A n d a g a i n i t is - i t is a m e m o r a n d u m t o th e

Board.
CHAIRPERSON : Hm.
A D V M A H L A P E S E L L O : I n j u s t if y i n g t h i s i n c r e a s e …

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04 DECEMBER 2019 – DAY 196
CHAIRPERSON : Hm.
A D V M A H L A P E S E L L O : O f s ix - 9 6 9 m i lli o n .
CHAIRPERSON : Hm.
A D V M A H L A P E S E L L O : S o t h a t is th e b a c k g r o u n d .
CHAIRPERSON: Hm. Hm.
A D V M A H L A P E S E L L O : N o w t h a t is - t h a t is w h a t w e a r e s u p p o s e d to
d e a l w it h …
CHAIRPERSON: Hm.
ADV MAHLAPE SELLO:
10

A n d I a m c o n f id e n t t h a t w e c a n d e a l w it h i t

v e r y b r ie f ly.
C H A I R P E R S O N : Ye s . O k a y.
ADV MAHLAPE SELLO:

T h e r e a r e - t h e is s u e s a r is i n g t h e r e f r o m a r e

s li g h t ly d i ff e r e n t .
CHAIRPERSON : Hm.
ADV MAHLAPE SELLO:

Th e c o n c l u s i o n m a y b e th e s a m e , b u t I t h in k

t h a t tr a n s a c t io n o r t h e c o s t in g fo r t h a t t r a n s a c ti o n w a s s e t - b e s e t w i th
it s o w n p r o b l e m s .
C H A I R P E R S O N : Ye s .
A D V M A H L A P E S E L L O : T h a t M r C h a b i I t h i n k w o u l d b e i n a p o s i t io n t o
20

q u ic k ly t a k e u s t h r o u g h th e m …
C H A I R P E R S O N : Ye s .
ADV MAHLAPE SELLO:

B u t th e r e a d i n g o f t h e s t a t e m e n t m a k e s it

c le a r w h a t t h e i s s u e s i d e n t i fi e d w e r e a n d M r C h a b i ’s c o n c lu s i o n s .
O k a y.
C H A I R P E R S O N : O k a y.

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04 DECEMBER 2019 – DAY 196
A D V M A H L A P E S E L L O : S o I s e e t h a t t h e ti m e is q u a r t e r p a s t .
C H A I R P E R S O N : Ye s . O k a y.
A D V M A H L A P E S E L L O : 1 3 m in u t e s p a s t .
CHAIRPERSON :

L e t u s - w h a t is y o u r e s ti m a t e o f h o w m u c h t i m e w e

n e e d t o fi n is h t h i s p a r t ?
A D V M A H L A P E S E L L O : I w a s g o i n g to s a y t o M r C h a b i to - I p o s e o n e
q u e s t io n a n d h e s h o u l d g iv e a f u ll a n s w e r in 1 5 m i n u te s . A t t h e e n d o f
w h ic h w e a r e d o n e .
CHAIRPERSON : Oh.
10

A D V M A H L A P E S E L L O : T h a t w o u l d h a v e b e e n m y s u g g e s ti o n . I h a v e
n o t c h e c k e d w h e th e r it is d o a b l e .
C H A I R P E R S O N : Ye s . W e ll c h e c k …
A D V M A H L A P E S E L L O : Th is i s a r a c e a g a i n s t ti m e .
C H A I R P E R S O N : L e t u s c h e c k w i t h h i m w h e th e r i t is d o a b l e t h a t w a y.
M R C H A B I: I s u p p o s e i t is .
A D V M A H L A P E S E L L O : I t i s d o a b le ?
M R C H A B I: I s u p p o s e . J a .
ADV MAHLAPE SELLO: Hm.
CHAIRPERSON :

20

Ye s .

M a y b e l e t u s d o t h a t w i t h a v ie w t h a t w e c a n

t a k e t h e te a b r e a k a t h a lf p a s t 11 a n d t h e n w e k n o w w e h a v e d o n e w it h
him.
ADV MAHLAPE SELL O: May I just check something?
CHAIRPERSON : Ja.
A D V M A H L A P E S E L L O : B e c a u s e w e h a d b e e n g iv e n t h r e e h o u r s .
CHAIRPERSON : Ja.

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04 DECEMBER 2019 – DAY 196
A D V M A H L A P E S E L L O : I j u s t w a n t to s e e w h e t h e r t h e n e x t w it n e s s is
r e a d y a n d t h e n e x t e v i d e n c e l e a d e r is r e a d y.
CHAIRPERSON : Well …
ADV MAHLAPE SELL O: Ja. I am - I am told …
CHAIRPERSON : I - I do not but there is no reason why they should not
b e r e a d y.
ADV MAHLAPE SELL O: I am - I am told they are.
CHAIRPERSON : Ja.
A D V M A H L A P E S E L L O : N o . I t is b e c a u s e w e h a d g iv e n t h e m th e h o u r
10

o f 1 2 o ’ c l o c k . N o w th a t w e a r e …
C H A I R P E R S O N : Ye s .
A D V M A H L A P E S E L L O : B u t I a m - I a m a s s u r e d th a t t h e y a r e .
C H A I R P E R S O N : Ye s .
ADV MAHLAPE SELL O: So we can do a run through then.
C H A I R P E R S O N : Ye s .
A D V M A H L A P E S E L L O : H o p e f u l ly to f in is h Mr C h a b i b y h a l f p a s t 11 .
C H A I R P E R S O N : Ye s . N o . T h a t is - t h a t i s fi n e . L e t u s d o t h a t.
A D V M A H L A P E S E L L O : O k a y.
CHAIRPERSON : Ja.

20

A D V M A H L A P E S E L L O : S o Mr C h a b i, I - I tr i e d t o g i v e t h e - t h e C h a i r
a b r i e f b a c k g r o u n d to t h is 1 0 0 tr a n s a c ti o n - 1 0 0 l o c o m o t iv e s a n d j u s t to
r e m i n d y o u M r S e d u m e d i d u r in g h is t e s t i m o n y t o o k th e C h a ir t h r o u g h
t h e v a r io u s tr a n s a c ti o n s a n d - a n d s h o w e d h o w t h e y a l l f it t o g e t h e r. S o
y o u d o n o t h a v e t o w o r r y a b o u t t h e b a c k g r o u n d to t h i s 1 0 0 tr a n s a c ti o n .
T h a t - t h a t o n e h a s b e e n la i d b e fo r e t h e C h a ir.

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04 DECEMBER 2019 – DAY 196
Considering your mandate as you set out in your paragraph
2 .1 j u s t b r i e fl y - w e a c c e p t a n d I d o n o t t h i n k a n y is s u e a r i s e s fr o m
y o u r p a r a g r a p h 3 w h i c h s e t s o u t t h e m e t h o d o lo g y a n d y o u c o n f ir m t h a t
t h e m e t h o d o l o g y i s i n k e e p i n g w i t h t h e s a m e m e t h o d o l o g y y o u fo ll o w e d
for 1064?
M R C H A B I: C o r r e c t.
ADV MAHLAPE SELLO:

O k a y.

S o t h e m e t h o d o l o g y is n o t a n is s u e .

W e a r e c l e a r a s t o w h a t y o u r m a n d a te w a s . C a n y o u t h e n s p e a k t o th e
is s u e s a n d d i ff ic u l ti e s y o u id e n t i fi e d i n t h is tr a n s a c ti o n a n d w h e n y o u
10

a r e d o n e t o t h e n e x p r e s s a n o p in i o n a s - a s r e g a r d s t h e is s u e s y o u
w e r e s u p p o s e d t o e x p r e s s a n o p i n io n o n w h ic h is t h e p o s s ib il i ty o f t h e
r e a s o n s a d v a n c e d fo r a n E T C i n c r e a s e b y 9 6 9 m il li o n a n d y o u
u n d e r t o o k t o th e C h a i r y o u c a n d o a ll t h a t i n 1 5 m in u t e s o r l e s s ?
M R C H A B I: S o r r y. I d o n o t h a v e t h e s l id e i n m y h a n d t o p r o je c t i t.
A D V M A H L A P E S E L L O : O k a y, b u t th e C h a ir h a s t h e s li d e . W h a t y o u
p e r h a p s d o n o t h a v e - C h a ir o n - i f y o u g o t o y o u r s li d e 3 3 .
CHAIRPERSON : What number?
A D V M A H L A P E S E L L O : Th a t i s w h e r e …
CHAIRPERSON : 36?

20

A D V M A H L A P E S E L L O : S l id e 3 - 3 .
CHAIRPERSON : Hm. 3-3?
A D V M A H L A P E S E L L O : J a . 3 3 C h a ir. T h a t is w h e r e 1 0 0 s t a r ts .
C H A I R P E R S O N : Ye s .
ADV MAHLAPE SELLO:

Mr Chabi you had said - so you do have the

s li d e s . W h a t y o u d o n o t h a v e is t h e s l id e s o n t h e c o m p u te r t o p r o j e c t

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04 DECEMBER 2019 – DAY 196
o n t o th e s c r e e n ?
M R C H A B I: C o r r e c t.
ADV MAHLAPE SELLO:

B u t y o u h a v e y o u r o w n w i tn e s s c o p y o f th e

s li d e .
M R C H A B I: I d o .
A D V M A H L A P E S E L L O : O k a y. W e a r e n o w a t t r a n s a c t io n 1 0 0 s t a r t in g
a t p a g e 3 3 a n d - a n d w h a t w o u ld y o u li k e t o d r a w t h e C h a ir ’s a t te n ti o n
t o i n r e s p o n s e t o th e q u e s t io n ?
M R C H A B I: I s u p p o s e i f y o u g o t o s li d e 4 C h a ir …
10

CHAIRPERSON : Huh-uh.
M R C H A B I: W h ic h a r e t h e r e a s o n s p u t fo r w a r d f o r t h e i n c r e a s e i n t h e
memorandum.
CHAIRPERSON : Huh-uh.
M R C H A B I: W e h a v e t h e n u m b e r s in r e d a s p e r t h e m e m o r a n d u m a n d
the numbers in blue as per …
CHAIRPERSON : Huh-uh.
M R C H A B I: T h e r e c a l c u la t i o n s . A g a i n in t h is i n s t a n c e w e h a v e g o t a n
u p d a te o f th e b u s i n e s s c a s e fo r e c o n o m i c fa c to r s a t 4 9 5 m il li o n .
c a m e t o a f i g u r e o f 1 9 4 m il li o n .

20

percent.

We

That is about 40 percent - 40/50

I n t h i s in s ta n c e l ik e t h e 1 0 6 4 w e h a v e a s c o p e c h a n g e ,

b e c a u s e t h is tr a n s a c ti o n w a s a w a r d e d t o C S R .
C S R d i d n o t h a v e th e r i g h t l o c o m o tiv e w h ic h w a s a 1 9 E
lo c o m o t iv e w i th a l e v e l o f tr a c t iv e p o w e r.

S o t h e ir s o l u ti o n w a s t o

c o n v e r t a 2 0 E l o c o m o ti v e t o a 1 9 E l o c o m o ti v e a n d th a t c o n v e r s i o n
r e q u ir e d c e r ta i n c o s t s t o b e e ff e c t e d a n d t h o s e c o s ts c a m e t o 3 4 7

Page 90 of 168

04 DECEMBER 2019 – DAY 196
m il li o n . T h o s e c o s ts w e r e v a li d a s a t M a r c h 2 0 1 4 .
ADV MAHLAPE SELLO:

S o - s o y o u a r e s u g g e s ti n g t h a t C S R w a s

a w a r d e d a t e n d e r f o r l o c o m o t iv e s t h e y d id n o t h a v e a n d t h e y - th e y d id
not at the time have?
M R C H A B I: In t h e ir a r s e n a l . Ye s .
A D V M A H L A P E S E L L O : A n d o f t h e l o c o m o t iv e s it h a d i t h a d t o e ff e c t
c e r t a i n c h a n g e s t o t h e e x is t in g l o c o m o ti v e s i n o r d e r t o c o m p ly w i t h t h e
bid?
M R C H A B I: D e s i g n c h a n g e s a n d m o d if ic a t io n s y e s .
10

ADV MAHLAPE SELLO:

But

a p p r e c ia ti n g

that

because

the

m e m o r a n d u m i s d a t e d M a y 2 0 1 4 . N o n e t h e le s s t h e y w e r e a w a r d e d th e t h e c o n tr a c t?
M R C H A B I: Ye s .
ADV MAHLAPE SELLO:

O k a y a n d , b e c a u s e t h e y d i d n o t h a v e t h a t it

c o s t Tr a n s n e t - Tr a n s n e t a n e x t r a 3 4 7 m i lli o n fo r th e s c o p e c h a n g e ? As
- as …
M R C H A B I: N o t t h a t i t c o s t …
ADV MAHLAPE SELLO:

As regards of course the - the make.

Yo u

spoke of 19E/20E.
20

M R C H A B I: C o r r e c t.
ADV MAHLAPE SELLO:

S o t o b r i n g th e - t h e lo c o m o t iv e to a c t u a l

speck …
M R C H A B I: Ye s . T h a t …
A D V M A H L A P E S E L L O : A t th is b i d . Tr a n s n e t h a d t o f o r k o u t a n o th e r
3 4 7 m il li o n ?

Page 91 of 168

04 DECEMBER 2019 – DAY 196
M R C H A B I: C o r r e c t.
A D V M A H L A P E S E L L O : J a . Ye s .
M R C H A B I:

R is k m i ti g a ti o n c o s t s in t h i s i n s t a n c e a m o u n t e d t o 3 7 1

m il li o n .

W e c a m e to a b o u t 3 0 0 m i lli o n .

m il li o n .

W e c a m e t o 3 7 3 mi ll i o n .

Contingents at about 440

U n l ik e t h e p r e v i o u s c a s e w h e r e w e

a p p li e d a s e v e n p e r c e n t c o n t i n g e n c y.

W e a p p l ie d 1 0 t o t h e e n t ir e

c o n tr a c t h e r e , b e c a u s e t h e r e w e r e ju s t s o m a n y u n c e r t a i n ti e s fr o m t h e
m e m o r a n d u m a n d o n e m a j o r o n e f o r u s w a s i t k e p t r e fe r r i n g t o a
R a n d / Ye n e x c h a n g e r a t e .
10

I n k e e p i n g w i t h t h e m a n d a t e a n d tr y i n g t o r e p r o d u c e t h e c o s t
b a s e d o n t h e - u s i n g t h e b a s is p u t f o r w a r d in t h e - i n th e m e m o r a n d u m .
T h e r e w a s a c o s t o f a b o u t 7 6 5 , b u t I th in k w e w il l g e t t o th a t . It w a s a
p r o b le m f o r u s , b e c a u s e w e t h o u g h t o k a y. I f C S R ’s s u b m is s i o n w e r e in
D o ll a r s w h y is th e m e m o r a n d u m m a k in g r e f e r e n c e t o Ye n . I f y o u l o o k a t
t h e c u r r e n c y m o v e m e n t s b e t w e e n t h e Ye n a n d t h e D o l la r th e y w e r e
q u i te - t h e y w e r e m a t e r i a l ly d i ff e r e n t .
I n c e r t a in in s ta n c e s t h e R a n d a p p r e c i a t e d a g a i n s t t h e - t h e
Ye n . C o u n ti n g a s a b e n e f it t o Tr a n s n e t. H o w e v e r w h e n y o u c o m p a r e i t
t o t h e D o ll a r r i g h t t h r o u g h w e s e e a d e p r e c ia t io n in t h e R a n d . S o th a t

20

w o u ld h a v e m a t e r ia l e ff e c t s o n t h e - w e ll a m a te r i a l i m p a c t . S o r r y. O n
t h e r e s u l ts . I n o th e r w o r d s t h e i n c r e a s e i n E T C t h a t w e p u t fo r w a r d a s
a r e a s o n a b le in c r e a s e in E T C .
T h e m e m o r a n d u m a l s o s p e a k s to a d i s c o u n t n e g o ti a te d o f 2 4 7
m il li o n . I w o u l d lik e t o n o te h e r e t h a t l o o k i n g a t t h e fir s t p a g e o f th e
m e m o r a n d u m w e d id p i c k u p c e r ta i n e r r o r s i n th a t t a b l e .

Page 92 of 168

In fact that

04 DECEMBER 2019 – DAY 196
d is c o u n t s h o u ld h a v e b e e n h i g h e r th a n 2 4 7 m il li o n , b e c a u s e th e c o s t s
o f 3 7 3 m i ll i o n i n t h e e x e c u t iv e s u m m a r y s h o u ld h a v e b e e n 11 0 0 - s o r r y.
8 11 m il li o n . S o t h a t i s u n d e r s ta t e a b o u t 4 0 0 m i ll io n .
A D V M A H L A P E S E L L O : O k a y.
M R C H A B I:

I n tr y i n g to g e t to a n in c r e a s e o f R 9 6 9 m i ll io n in t h is

in s t a n c e . Yo u a r e g o i n g t o g e t a m u c h b i g g e r d is c o u n t t h a n 2 . 4 7 . W e
h o w e v e r d id n o t d is p u t e th a t d i s c o u n t w h ic h m a d e u p fiv e p e r c e n t .
R o u g h ly fiv e .

A c t u a ll y 5 .3 2 p e r c e n t o f t h e l o c o m o t iv e c o s ts .

So we

a p p li e d t h e s a m e p r in c i p l e i n o u r c a l c u l a t i o n a l l o w in g fo r a fiv e p e r c e n t
10

d is c o u n t , b e c a u s e i t i s u n l ik e l y t h a t a t a r e d u c e d f e e Tr a n s n e t w o u l d
h a v e g o t t e n a s i m i la r le v e l o f d is c o u n t .

S o w e a d j u s t t h e d is c o u n t

d o w n w a r d s t o r e f l e c t t h e l a w - a c o n t r a c t p r ic e .
ADV MAHLAPE SELLO:

O k a y.

Th e n I th in k w e c a n t h e n m o v e o n to

y o u r s li d e 3 8 - s l i d e 6 .
M R C H A B I: S li d e 6 .
A D V M A H L A P E S E L L O : C h a ir i t w o u l d b e p a g e 3 8 o f y o u r s l id e p a c k
a n d - a n d th a t s li d e t h a t is w h e r e y o u a l l - y o u p u t i t a ll t o g e t h e r.
M R C H A B I: C o r r e c t.
ADV MAHLAPE SELLO:
20

A s y o u d id p r e v io u s ly w i th th e 1 0 6 4 .

Yo u

m a d e a c o m p a r is o n b e t w e e n y o u r f i g u r e s a n d t h e m e m o r a n d u m ’s
fi g u r e s p e r l i n e i t e m .

T h e o n e t h i n g y o u d o n o t d o a t s li d e 8 is t o

c o n s i d e r th e - t h e b u s i n e s s c a s e i t s e l f.
M R C H A B I:

Correct.

A l t h o u g h in th e s t a te m e n t w e p r o v i d e s o m e

comments on it.
ADV MAHLAPE SELLO:

I t is h e a d e d “ O p in io n o n a R e a s o n a b le E T C ”

Page 93 of 168

04 DECEMBER 2019 – DAY 196
C h a ir.
C H A I R P E R S O N : O k a y. I h a v e f o u n d i t . S li d e 6 p a g e 3 8 .
A D V M A H L A P E S E L L O : P a g e - s li d e 6 p a g e 3 8 C h a ir.
CHAIRPERSON : Ja.
M R C H A B I: C o r r e c t . S o i f I m a y. S o t h a t s li d e g iv e s y o u th e b u il d u p
t o 4 . 8 b il li o n , b e c a u s e t h e i n c r e a s e w a s f r o m 3 . 8 7 1 b i ll io n to 4 . 8 7 - o d d
b i ll io n .

Th a t is a R 9 6 9 m il li o n i n c r e a s e i n t h e E T C .

T h a t s li d e g iv e s

y o u t h e b u il d u p to th e 4 . 8 b il li o n . S i m i la r t o w h a t w e s a w i n 1 0 6 4 . W e
c a n s e e t h e y s t a r t w i th th e p r ic e p e r lo c o m o t iv e a s a t M a y 2 0 1 3 o f
10

34.34.
I t w a s n o t o u r m a n d a t e t o a t t h e ti m e o f p u t ti n g th is r e p o r t
t o g e th e r t o l o o k i n to t h e i n i ti a l E T C o f 3 .8 b i lli o n . H o w e v e r M N S h a d a
s u b s e q u e n t s t a g e t h r o u g h t h e a d v o c a t e ’s r e q u e s t a s k e d t o h a v e a q u i c k
lo o k a t t h e i n i ti a l E T C o f 3 . 8 b i lli o n .

Maybe before I carry on having

lo o k e d a t th a t E T C w e c a m e t o th e v i e w t h a t t h a t E T C s h o u l d h a v e b e e n
a b o u t 4 . 3 b il li o n a s o p p o s e d t o 3 .8 .
A n u m b e r o f e r r o r s w e r e m a d e in t h e c o m p u t a ti o n o f t h e 3 . 8
b i ll io n .

O n e o f th e m b e i n g t h a t o n t h e lo c a l c o n t e n t a n d i n s t e a d o f

a p p ly i n g 6 0 p e r c e n t a s p e r t h e D T I r e q u i r e m e n t.
20

A 4 0 p e r c e n t fi g u r e

w a s a p p l i e d a n d o n t h e fo r e ig n c o m p o n e n t in s t e a d o f a p p ly in g 4 0
p e r c e n t , 5 0 p e r c e n t w a s a p p l ie d . I t h in k w e s p e a k t o t h e e ff e c t o f t h o s e
e r r o r s o n t h e - o n th e E T C .
ADV MAHLAPE SELLO:

S o t h e 4 . 2 y o u - y o u a r r iv e a t a s w h a t th e

E T C o u g h t t o h a v e b e e n in s t e a d o f 3 . 8 .
c o r r e c t in g th e e r r o r s y o u i d e n t if i e d ?

Page 94 of 168

Is a s a f u n c ti o n o f y o u r

04 DECEMBER 2019 – DAY 196
M R C H A B I: C o r r e c t.
ADV MAHLAPE SELL O: Okay and you come to 4.2.
M R C H A B I: I n a d d i t i o n th a t th e r e w a s a t h ir d e r r o r th a t - th e r e w a s a
1 0 p e r c e n t d e p o s i t p a i d i n t h e t h ir d 2 0 1 3 / 2 0 1 4 p e r io d . T h a t w o u ld h a v e
b e e n p a id a s p e r t h e b u s i n e s s c a s e a n d t h e r e s t o f th e c o s t w o u ld h a v e
b e e n in c u r r e d i n 2 0 1 4 /2 0 1 5 .
lo c o m o t iv e s i n 2 0 1 5 .

S o e s s e n t ia ll y 2 0 1 5 /2 0 1 6 .

44 in 2016.

So 56

T h e a p p li c a t io n o f t h e d is c o u n t t o

t h o s e c o s ts w a s - h a d I s u p p o s e s o m e m a t h e m a t ic a l e r r o r s t h a t w e
a d j u s te d f o r …
10

A D V M A H L A P E S E L L O : O k a y.
M R C H A B I: A n d t h a t b r o u g h t u s t o a c o s t o f a b o u t 4 . 3 …
A D V M A H L A P E S E L L O : O k a y.
M R C H A B I: S ix b i lli o n .
ADV MAHLAPE SELLO:

But

you

-

you

are

saying

that

the

m e m o r a n d u m - t h e 2 0 1 4 m e m o r a n d u m d e p a r t e d fr o m t h e p r e m i s e t h a t
t h e 3 .8 b i ll io n w a s c o r r e c t?
M R C H A B I: C o r r e c t.
A D V M A H L A P E S E L L O : A n d i t is t o t h e 3 . 8 b il li o n t h a t t h e 9 6 9 m i ll io n
is a d d e d ?
20

M R C H A B I: C o r r e c t.
A D V M A H L A P E S E L L O : To g iv e a n e w E T C o f 4 . 8 b i ll io n ?
M R C H A B I: C o r r e c t.
ADV MAHLAPE SELLO:

T h a t is w h a t y o u h a v e a t y o u r s li d e 6 .

Yo u

r e c a l c u l a t e d a n d y o u s ta r t o ff w i th a p r ic e o f 3 0 . 9 5 p e r l o c o m o t iv e a n d
n o t 3 4 . 3 4 a s s e t o u t in t h e m e m o r a n d u m .

Page 95 of 168

04 DECEMBER 2019 – DAY 196
M R C H A B I: C o r r e c t.
A D V M A H L A P E S E L L O : W h y - w h y t h e d i ff e r e n c e i n t h a t? W h y d o y o u
a p p ly - d o y o u a r r iv e a t a s li g h t ly l e s s p r ic e p e r l o c o m o t iv e ?
M R C H A B I:

O k a y.

S o th e 3 4 .3 4 is d e r iv e d fr o m a Ye n p r ic e o f R 3 8 4

m il li o n - m i ll io n Ye n . S o r r y a n d t h a t i s o n th e b a s i s th a t t h e E T C w a s
3 0 - 3 . 8 b il li o n . S o t h e 3 4 . 3 4 is w r o n g o n t h e b a s i s t h a t th e - f o r th e
reasons we have just mentioned.

The incorrect local and foreign

c o m p o n e n ts a p p li e d a n d …
A D V M A H L A P E S E L L O : S o a b a s e p r ic e o f 3 4 . 3 4 p lu s w h a t e v e r e r r o r s
10

is w h a t g iv e s u s t o 3 .8 b i ll io n ?
M R C H A B I: C o r r e c t.
A D V M A H L A P E S E L L O : O k a y, b u t y o u a r r iv e d a t 3 0 .9 5 m il li o n ?
M R C H A B I: C o r r e c t.
A D V M A H L A P E S E L L O : Q u ic k ly b r i e fl y t e l l u s h o w a n d w h y ?
M R C H A B I: O k a y. S o C S R i n i t s s u b m is s i o n s p u t f o r w a r d a p r ic e a s a t
A p r il 2 0 1 2 o f 2 8 . 8 6 m ill i o n .
A D V M A H L A P E S E L L O : P e r l o c o m o tiv e ?
M R C H A B I:

P e r l o c o m o ti v e , b u t r e m e m b e r t h a t w a s f o r t h e 2 0 E

lo c o m o t iv e . N o t th e 1 9 E l o c o m o ti v e . W e t h o u g h t i t b e s t t o w o r k f r o m
20

t h a t b a s is .

B u il d i t u p a n d t h e n a l lo w f o r t h e m o d i fic a ti o n c o s ts t o

a r r iv e a t a c o s t f o r a n e q u i v a le n t - w e ll w h a t t h e y t e r m a n e q u iv a l e n t
19E …
ADV MAHLAPE SELLO: Ja.
M R C H A B I: L o c o m o t iv e …
A D V M A H L A P E S E L L O : Ye s .

Page 96 of 168

04 DECEMBER 2019 – DAY 196
M R C H A B I: As a t M a r c h 2 0 1 4 . W e w i ll g e t to t h a t …
A D V M A H L A P E S E L L O : S o y o u - y o u a r r i v e a t 3 0 m i ll i o n .
M R C H A B I: 3 0 . 9 5 .
A D V M A H L A P E S E L L O : M i ll io n …
M R C H A B I: M il li o n .
A D V M A H L A P E S E L L O : P e r l o c o m o tiv e ?
M R C H A B I: As a t M a y 2 0 1 3 …
ADV MAHLAPE SELLO: Ja.
M R C H A B I: B u t th is i s s ti ll o n t h e 2 0 E l o c o m o ti v e .
10

ADV MAHLAPE SELL O: Of course.
M R C H A B I: B e c a u s e t h e y a l lo w e d f o r th e m o d i f ic a ti o n c o s t s .
ADV MAHLAPE SELLO:

B u t t h e n y o u d o f a c to r i n t h e m o d i f ic a t i o n

c o s ts ?
M R C H A B I: H m .
A D V M A H L A P E S E L L O : Th e 3 0 0 - th a t …
M R C H A B I: 3 . 4 7 m il li o n .
A D V M A H L A P E S E L L O : 3 . 4 7 - 3 4 7 f o r a ll 1 0 0 . R i g h t ?
M R C H A B I: C o r r e c t.
ADV MAHLAPE SELLO:
20

So

the

p r ic e

then

would

be

with

th e

m o d i f ic a ti o n c o s ts 3 4 m i ll i o n p e r - p e r lo c o m o t iv e a s a t t h a t d a t e .
Right?
MR CHABI:

At which date sorry?

ADV MAHLAPE SELLO:
MR CHABI:

As at May 201 3.

N o b e c a u s e th e m o d i fi c a t io n c o s ts w i th 3 .4 7 a s a t 2 8 F e b

2 0 1 4 v a l id f o r a m o n t h .

Page 97 of 168

04 DECEMBER 2019 – DAY 196
A D V M A H LA P E S E L L O :

S o it ’s 2 0 1 4 o r 2 0 1 3 ?

Is i t M a y 2 0 1 4 y o u

say?
MR CHABI:

N o , n o s o 3 0 . 9 5 is a s a t M a y 2 0 1 3 .

ADV MAHLAPE SELLO:
MR CHABI:

Ye s .

B u t i t ’s a p r ic e f o r a 2 0 E lo c o m o t iv e a s a t M a y 2 0 1 3 .

A D V M A H LA P E S E L L O :

I’ m w i t h y o u . A n d t h e m e m o s t a r ts f r o m t h e

p r e m is e t h a t t h e p r ic e p e r l o c o m o t iv e w a s 3 4 . 3 4 ?
MR CHABI:

Correct.

ADV MAHLAPE SELLO:
10

And you say that can’t be correct because it

d o e s n o t c o r r e l a t e w i t h t h e b id r e c e iv e d fr o m C S R , th e ir o w n c o s ti n g ?
MR CHABI:

C o r r e c t C S R ’s s u b m is s io n i s in d o ll a r s . . . [i n te r v e n e s ]

ADV MAHLAPE SELLO:
MR CHABI:

T h e y c a m e in 2 8 2 8 .

3 4 . 3 4 i t is a 3 8 5 m il li o n Ye n p r ic e .

ADV MAHLAPE SELLO:

O k a y t h e m e m o t a k e s in t o a c c o u n t t h e

m o d i f ic a ti o n c o s t lik e – w h i c h is w h a t y o u d i d a s w e l l , s o 3 . 4 7 ?
MR CHABI:

Correct.

ADV MAHLAPE SELLO:

S o th e m o d i f ie d l o c o m o t iv e a c c o r d i n g t o th e

m e m o i s 3 4 .3 4 m il li o n p lu s 3 .4 7 th a t b r i n g s m e r o u g h ly i n t o t h e
3 8 m i ll io n m a r k ?
20

M R C H A B I:

Correct.

ADV MAHLAPE SELLO:
MR CHABI:

W h e r e a s y o u a r e a t 3 4 m il li o n ?

Ye s .

ADV MAHLAPE SELLO:

A n d t h e n w e f o ll o w t h a t t a b l e , w e g e t t o y o u r

fi n a l p r ic e p e r l o c o m o ti v e o f 3 7 .2 7 , t h e m e m o c o m e s t o a p r ic e o f
4 4 m i ll io n p e r l o c o m o tiv e 4 4 0 ?

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04 DECEMBER 2019 – DAY 196
MR CHABI:

Correct.

ADV MAHLAPE SELLO:

O k a y th e n t h e r e a r e a d j u s t m e n ts t o a ll o w fo r

t h e c o n t in g e n c i e s a n d t h e i t g e t s t o a f in a l i n c r e a s e n u m b e r. Yo u – t h e
m e m o s u g g e s ts w a s s e e k in g a u t h o r is a ti o n o r a p p r o v a l fo r a n in c r e a s e
b y 9 6 9 m i ll io n a n d y o u r c a l c u l a t i o n o r r e c a lc u la t io n c a n o n ly j u s t i fy a n
in c r e a s e o f 2 2 9 m i ll io n ?
MR CHABI:

Correct.

ADV MAHLAPE SELLO:

A n d t h a t is t h e p r i m a r y d i ff e r e n c e b e t w e e n

y o u r s e l v e s , y o u r c a lc u l a ti o n s a n d t h e m e m o ?
10

MR CHABI:

Correct.

ADV MAHLAPE SELLO:

Yo u h a v e a t th a t s l id e c o m p li c a t io n o f 2 5 % ,

5 .9 % a n d j u s t s o w h e n w e r e a d i t t o m o r r o w w e k n o w e x a c tl y w h a t
y o u ’r e ta lk in g a b o u t, c a n y o u t a l k u s t h r o u g h i t y o u ’v e g o t y o u r
c o n ti n g e n c y a n d ju s t b e lo w y o u ’v e g o t E T C f o r 1 0 0 ; l o c o m o tiv e s p l u s
c o n ti n g e n c y 4 .8 b ill i o n p e r m e m o w h e r e y o u g e t 4 . 1 a n d y o u s a y o r y o u
c o m p a r e w i t h o r i g i n a l E T C t h e n i t w a s 3 . 8 7 1 a n d y o u u s e a ls o 3 .8 7 1 ,
t h e n y o u ’v e g o t a n R O n e x t t o i t , i t i n d ic a te s 2 5 % a s f a r a s t h e
c a l c u l a ti o n is c o n c e r n e d a n d l o o k in g a t y o u r r e c a lc u la t io n i t ’s 5 . 9 %
w h a t d o t h o s e p e r c e n t a g e s r e p r e s e n t?
20

MR CHABI:

B a s i c a ll y w e ’r e s a y in g th a t a n i n c r e a s e o f 6 % o n t h e

r e g i o n a l E T C a s s u m i n g t h e E T C i s c o r r e c t w o u ld h a v e b e e n m o r e
a c c e p ta b l e . .. [ in t e r v e n e s ]
ADV MAHLAPE SELLO:
MR CHABI:

O k a y.

C o m p a r e d t o t h e 2 5 % in c r e a s e i n E T C t h a t th e m e m o p u t

forward.

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04 DECEMBER 2019 – DAY 196
ADV MAHLAPE SELLO:

S o y o u r fi n d i n g is th a t y o u w o u l d p e r m i t o n ly

a n in c r e a s e o f t h e o r i g i n a l E T C b y – i t’s 5 . 9 % .
MR CHABI:

6% .

A D V M A H LA P E S E L L O :

6 % , a p p r o v a l s o u g h t a n d g r a n t e d b y th e

B o a r d w a s t o i n c r e a s e t h a t 3 . 8 b il li o n E T C b y 2 5 % .
M R C H A B I:

Correct.

ADV MAHLAPE SELLO:

I s t h e r e a n y t h i n g e ls e y o u w o u ld l ik e to s a y

o n t h e E T C , o n t h e 1 0 0 l o c o m o tiv e s .
MR CHABI:
10

T h a t ’s it , t h a n k y o u .

ADV MAHLAPE SELLO:
CHAIRPERSON :

C h a ir . .. [ in t e r v e n e s ]

W h e n y o u lo o k a t w h a t t h e B o a r d a p p r o v e d a n d th e

d i ff e r e n c e b e t w e e n t h a t a n d w h a t y o u a r r iv e d a t a n d t h e in f o r m a t io n
p l a c e d b e f o r e th e B o a r d a r e y o u a b l e o r a r e y o u n o t a b l e to s a y
w h e t h e r th e p r o b a b ili t ie s a r e t h a t t h e B o a r d w a s m is le d w h e n y o u h a v e
r e g a r d t o a ll f a c t o r s o r a r e y o u n o t a b le – w h e n I s a y m is le d I m e a n
d e li b e r a t e ly.
MR CHABI:

S o C h a ir I t h i n k t h a t s u b m i s s i o n w il l p r o b a b l y h o l d m o r e

in t h e 1 0 6 4 c a s e t h a n i t w o u l d h e r e .
CHAIRPERSON :
20

MR CHABI:

Ye s .

A n d h e r e I h i g h li g h t t h a t t h e m e m o w a s n o t c o n s i s te n t .

CHAIRPERSON : Sorry?
MR CHABI:

T h e m e m o r a n d u m o n t h e 1 0 0 w a s l a r g e ly i n c o n s i s te n t .

C H A I R P E R S O N : Ye s .
MR CHABI:

W i t h th e fa c ts p r o v i d e d fr o m C S R .

C H A I R P E R S O N : Ye s .

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04 DECEMBER 2019 – DAY 196
MR CHABI:

I t is th e n v e r y d i ffi c u l t t o s a y w h e t h e r i t w a s m a n a g e m e n t

m is le a d i n g t h e B o a r d , o r m a n a g e m e n t h a v i n g m i s c a lc u la t e d fr o m t h e
business case.
CHAIRPERSON : Genuinely?
MR CHABI:

Sorry?

CHAIRPERSON : Having genuinely miscalculated.
MR CHABI:

O n t h e b u s in e s s c a s e s ta g e y e s .

C H A I R P E R S O N : Ye s , y e s , y e s .
MR CHABI:
10

Correct.

CHAIRPERSON :

B u t i f i t w a s g e n u i n e w o u l d y o u s a y th e y m u s t h a v e

b e e n n e g l ig e n c e , m a y b e g r o s s n e g l ig e n c e o r t h a t ’s s o m e t h i n g t h a t y o u
w o u ld n ’ t b e a b l e t o – w e l l y o u w o u l d n ’ t b e a b le t o g o t h a t f a r, it m i g h t
ju s t b e a q u e s t io n o f t h e m h a v i n g b e e n w r o n g a n d m a y b e v e r y w r o n g
b u t t h a t ’s a s fa r a s y o u c a n t a k e i t .
MR CHABI:

Ye s , it w il l b e v e r y d i ffic u lt C h a ir t o o p in e o n t h a t , I t h i n k

M N S ’s t h a t a r e p l a c e d h a v i n g I s u p p o s e d i n c l u d e d o r a ll o w e d f o r t h e s e
fi n d i n g s i n th e i r o v e r a ll fi n d i n g s .
C H A I R P E R S O N : Ye s , o k a y.
A D V M A H LA P E S E L L O :
20

C h a ir I n o te th a t t h e ti m e is n o w 11 : 3 4 a n d I

w o u ld lik e t o p la c e o n r e c o r d t h a t I h a v e f i n is h e d w it h M r C h a b i a t
11 : 3 1 s o I w a s o n e m i n u te o u t o n m y u n d e r t a k i n g .
CHAIRPERSON :

( la u g h in g )

Yo u w a n t t o p r o te c t y o u r s k i lls i n

a s s e s s m e n t o f t i m e a n d h o w m u c h ti m e y o u n e e d t o . . . [i n t e r v e n e s ]
A D V M A H LA P E S E L L O :

M y r e p u t a ti o n g o i n g f o r w a r d s o t h a t t h e C h a i r

c a n s ti ll tr u s t m e to m o r r o w o n m y e s ti m a t io n s .

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04 DECEMBER 2019 – DAY 196
C H A I R P E R S O N : Is t h a t i n fl u e n c e d b y t h e n u m b e r o f a t t o r n e y s a r o u n d
today?
ADV MAHLAPE SELLO:

And counsel.

CHAIRPER SON: And counsel.
ADV MAHLAPE SELLO:

S o u n le s s th e C h a ir h a s f u r t h e r q u e s ti o n s

t h a t is th e e v id e n c e o f M r C h a b i r e g a r d i n g t h e 1 0 6 4 tr a n s a c ti o n a n d
100.
C H A I R P E R S O N : Ye s .
ADV MAHLAPE SELLO:
10

A n d I t h in k t h a t b r i n g s to a c lo s e M r C h a b i ’s

t e s ti m o n y.
CHAIRPERSON:

N o t h a t ’s fi n e .

Thank you very much Mr Chabi for

y o u r e v i d e n c e a n d fo r h a v in g b e e n a b l e to c o m e a t e a r li e r t h a n n o r m a l
ti m e t o d a y t o b e h e r e t o g iv e e v id e n c e . S h o u l d th e n e e d a r i s e w e w i ll
a s k y o u to c o m e b a c k a g a in b u t a s I s a id y o u m ig h t f i n d t h a t t h e r e a r e
q u e s t io n s f o r c la r i fi c a t io n th a t y o u m u s t b e a s k e d , c l a r i fic a ti o n s t h a t
y o u m u s t b e a s k e d t o g iv e j u s t i n w r i t in g w it h o u t c o m i n g b a c k b u t th a n k
you very much, and you are excused.
MR CHABI:

T h a n k y o u C h a ir.

C H A I R P E R S O N : Th a n k y o u .
20

Ms S e ll o I w o u ld l ik e a f u l l s e t o f a l l t h e

e x h i b i t s a n d Tr a n s n e t s t a t e m e n t s t o b e m a d e a v a i la b le , a f u ll s e t a n d
s t a te m e n ts b u t I w o u ld lik e t h e s a m e t h i n g in r e g a r d to E s k o m , i f y o u
c a n c o n v e y t h e m e s s a g e t o y o u r c o ll e a g u e s .
ADV MAHLAPE SELLO:

Ye s C h a ir.

C H A I R P E R S O N : I t h i n k t h e tr a n s c r ip t o f e v i d e n c e o f a ll t h e w i tn e s s e s
w h o h a v e g iv e n e v id e n c e i n r e g a r d t o b o t h w o r k s tr e a m s b e c a u s e o f

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04 DECEMBER 2019 – DAY 196
h o w w e h a v e b e e n h e a r i n g w i tn e s s e s , i n o th e r w o r d s n o t a c c o r d in g t o
t h e m e s b u t a c c o r d i n g t o a v a i l a b il i ty i n o r d e r t o m a x i m i s e o u r ti m e m i g h t
o r m i g h t n o t b e d i ff ic u l t t o p u t t o g e t h e r b u t in th e e n d I w o u ld w a n t t h e
tr a n s c r ip t a s w e ll s o – b u t I t h i n k t h e e x h i b it s w i ll b e e a s y t o a n d a l l t h e
s t a te m e n ts w i ll b e e a s y t o a c h i e v e , t h e y c a n b e a c h i e v e d q u ic k e r s o i f
y o u c o u ld m a y b e m a k e s u r e p e o p l e w h o k n o w w h a t n e e d s t o b e d o n e t o
g e t t h a t d o n e , t h e y k n o w, b u t y o u h a v in g b e e n fu ll y i n v o l v e d i n a t l e a s t
Tr a n s n e t, I c a n ’ t r e m e m b e r w h e t h e r y o u w e r e i n v o lv e d i n E s k o m a s
w e ll .
10

ADV MAHLAPE SELLO:
CHAIRPERSON :

No.

I n Tr a n s n e t y o u a n d y o u r c o l l e a g u e s w h o h a v e b e e n

a s s is ti n g y o u m ig h t b e a b l e t o a s s is t b y m a k i n g s u r e th a t t h e r e is a f u ll
lis t o f th e n a m e s o f w i tn e s s e s p l u s m a y b e y o u r o w n b u n d l e s t o s a y h e r e
is a c o m p l e te s e t th e n th e y c a n m a k e c o p i e s fr o m t h o s e a n d t h e n I c a n
b e t o l d o n c e t h o s e a r e a v a il a b l e .
A D V M A H LA P E S E L L O :

J u s t to m a k e s u r e w e g e t th e m e s s a g e

c o r r e c t ly a n d c o n v e y a c o r r e c t m e s s a g e , w e a r e g iv i n g t h e C h a i r a l l
s t a te m e n ts a n d t h e ir a n n e x u r e s I t a k e i t .
C H A I R P E R S O N : Ye s , b a s i c a ll y e v e r y th in g th a t h a s b e e n h a n d e d u p .
20

A D V M A H LA P E S E L L O :

Ev e r y t h in g t h a t h a s b e e n d e a l t w i t h i n o r a l

t e s ti m o n y.
C H A I R P E R S O N : Ye s , y e s .
ADV MAHLAPE SELLO:

W h e n I s a y t h i s I tr y t o d is ti n g u is h b e tw e e n

t h a t a n d w h a t w e c a ll f o r in s t a n c e t h e Tr a n s n e t r e f e r e n c e b u n d le , t h e
Tr a n s n e t r e f e r e n c e b u n d l e is h u g e , a n d t h e r e a r e o t h e r r e p o r t s in th a t

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04 DECEMBER 2019 – DAY 196
r e fe r e n c e b u n d l e th a t w e h a v e n o t d e a l t w i t h i n o p e n h e a r in g .
C H A I R P E R S O N : Ye s .
ADV MAHLAPE SELLO:

S o a m I u n d e r s t a n d in g t h e C h a ir c o r r e c tl y

t h a t w e c o n f in e c o p i e s o f t h e e x h i b i ts t o t h o s e t h a t h a v e b e e n d e a l t
with through witnesses here in open hearing.
C H A I R P E R S O N : W e l l e v e r y th i n g t h a t h a s b e e n p l a c e d b e f o r e m e .
ADV MAHLAPE SELLO:

Through witnesses?

C H A I R P E R S O N : E v e n w i th o u t w i t n e s s e s a s l o n g a s it h a s b e e n p la c e d
before me.
10

I t m a y b e t h a t w e s t a r t w i th w h a t h a s b e e n p la c e d b e f o r e

m e t h r o u g h w it n e s s e s .
ADV MAHLAPE SELLO:

Ye s C h a ir.

C H A I R P E R S O N : A n d t h e n s e e in g f r o m y o u r r e a c ti o n y o u a r e t h i n k i n g
a b o u t m e , . . . [i n d is t in c t]
ADV MAHLAPE SELLO:

F o r th e C h a ir b e c a u s e i f w e d o it th a t w a y

t h e n t h e C h a ir c a n e x p r e s s a n o p in i o n a s to w h e t h e r t h a t i s w h a t h e
wanted.
C H A I R P E R S O N : Ye s , ja , ja , j a , w e c a n s t a r t t h a t w a y, j a .
ADV MAHLAPE SELLO:

B e c a u s e I a m t h i n k in g i f t h e C h a ir w il l r e c a l l

w h e n w e d i d t h e Tr a n s n e t r e fe r e n c e b u n d l e w e i n e ff e c t g a v e t h e C h a ir
20

t h e r e p o r ts o n ly a n d t h e a c t u a l e x h i b i ts th a t s i t b e h i n d th o s e r e p o r ts w e
d i d n ’ t g iv e in h a r d c o p y b e c a u s e t h e C h a i r w o u l d h a v e e n d e d p r o b a b ly
w i t h 6 0 a r c h l e v e r fi le s .
CHAIRPERSON :

N o , n o , t h a t’s f in e , l e t’s li m i t i t fo r n o w t o t h e

w i t n e s s e s a n d th e ir b u n d l e s .
ADV MAHLAPE SELLO:

To t h e w it n e s s e s .

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04 DECEMBER 2019 – DAY 196
CHAIRPERSON : And so on.
ADV MAHLAPE SELLO:

T h e n w e w i ll j u s t a d d t h e n c o p i e s o f

tr a n s c r ip t s .
C H A I R P E R S O N : Th e n w e c a n t a k e , ja , I m e a n I h a v e g o t m i n e , t h a t is
fi n e , b u t t h e r e is a r e a s o n w h y I n e e d a s e p a r a t e s e t.
ADV MAHLAPE SELLO:

No, no we should be able to do that, and we

w i ll c o m m u n ic a te t h a t t o Es k o m t e a m a s w e l l.
C H A I R P E R S O N : J a , o k a y a n d s a m e t h i n g w i t h Es k o m .
ADV MAHLAPE SELLO:
10

CHAIRPERSON :

Ye s C h a ir.

Ja, thank you.

O k a y, w e a r e g o i n g to t a k e t h e t e a

a d j o u r n m e n t n o w, i t is a b o u t 1 8 / n i n e t e e n m i n u t e s t o , w e w il l r e s u m e a t
t w e lv e f o r t h e n e x t w i tn e s s . W e a d j o u r n .
REGISTRAR:

A ll r is e .

I N Q U I RY A D J O U R N S
I N Q U I RY R E S U M E S
C H A I R P E R S O N : Ye s M s R a n g a t a a r e y o u r e a d y ?
A D V B A I T S E N G R A N G ATA : G o o d m o r n i n g D C J y e s , y e s I a m r e a d y.
C H A I R P E R S O N : G o o d m o r n i n g , g o o d a ft e r n o o n .
A D V B A I T S E N G R A N G ATA :
20

G o o d a f t e r n o o n C h a ir.

Good afternoon

C h a ir.
C H A I R P E R S O N : Ye s .
A D V B A I T S E N G R A N G ATA : Th a n k y o u .
C H A I R P E R S O N : It is o n ly a f e w s e c o n d s i n to t h e a f te r n o o n .
A D V B A I T S E N G R A N G ATA : Ye s t h a n k y o u .
C H A I R P E R S O N : O k a y.

Page 105 of 168

04 DECEMBER 2019 – DAY 196
ADV

BAITSENG

R A N G ATA :

Good

m orning

Mr

Hlongwane

and

w e lc o m e . C h a ir w e a r e h e r e t o d a y to – t o a s k Mr H l o n g w a n e s o m e f e w
q u e s t io n s .
C H A I R P E R S O N : Yo u w il l h a v e t o r a is e y o u r v o i c e .
A D V B A I T S E N G R A N G ATA : O h s o r r y a b o u t t h a t .
CHAIRPERSON : Hm.
A D V B A I T S E N G R A N G ATA :

C h a ir w e a r e h e r e t o d a y – t h e w it n e s s

t o d a y i s M r H l o n g w a n e – M r F a n a H l o n g w a n e h e i s h e r e t o d a y to
a n s w e r s o m e f e w q u e s t i o n s . W e d o n o t t h in k t h a t t h is s e s s i o n is g o i n g
10

t o b e t h a t l o n g b e c a u s e t h e q u e s ti o n s a r e v e r y p a r t ic u l a r. T h e y a r is e
o u t o f th e e v i d e n c e o f M r J o n a s fr o m h is s t a te m e n t w h i c h h e h a s
p r o v i d e d t o t h i s c o m m is s i o n i n A u g u s t 2 0 1 8 .

Mr Hlongwane has

r e c e i v e d – h e i s h e r e b e c a u s e h e h a s r e c e iv e d s u m m o n s I w a n t t o s a y
fr o m t h e l e g a l te a m a n d t h e t a s k t e a m t h a t is o u t o f n o t – o f d i s t r u s t o r
any reason but it is just for easier measures to make sure that
e v e r y t h i n g is d o n e p r o p e r ly b u t w e r e a l ly a p p r e c i a t e y o u c o m i n g h e r e
a n d p le a s e n o o ffe n c e I u n d e r s ta n d w e h a d a d is c u s s i o n e a r l ie r.

But

t h a n k y o u v e r y m u c h f o r c o m i n g . I m u s t a l s o a c k n o w l e d g e th a t w e h a v e
a tt e m p t e d p r e v i o u s ly t o – t o h a v e t h is s e s s i o n Si r – C h a ir a n d f o r
20

obvious

reasons

and

reasons

why

we

have

received

from

him

u n f o r t u n a t e r e a s o n s fr o m t h e s i c k n e s s o f h i s f a t h e r h e c o u l d n o t m a k e
it d u r in g t h a t t i m e . A n d w e t h a n k th e C h a ir f o r u n d e r s t a n d in g f o r t h a t.
S o to d a y w e a r e r e a d y t o p r o c e e d a n d M r H l o n g w a n e is h e r e w i t h h i s
le g a l r e p r e s e n t a ti v e .

I t h i n k i t is a n o p p o r t u n e ti m e to l e t – t o p u t

themselves on rec ord.

Page 106 of 168

04 DECEMBER 2019 – DAY 196
C H A I R P E R S O N : J a l e t u s – le t u s h a v e h is c o u n s e l p l a c i n g h i m s e l f o n
record. Thank you.
ADV J C CILLLIERS SC:

M a y i t p l e a s e y o u C h a i r y e s I a m J C C i ll ie r s

s e n i o r c o u n s e l p r a c t ic in g a s s u c h a t th e P r e to r i a B a r a n d I a m h e r e o n
b e h a l f o f M r H lo n g w a n e in s tr u c te d b y m y a tt o r n e y s M r s S t o c k e n s tr o o m
F o u c h e A t to r n e y s .
CHAIRPERSON :

Ye s t h a n k y o u v e r y m u c h .

Th a n k y o u .

I think we

m u s t a ls o h a v e t h e l e g a l r e p r e s e n t a tiv e f o r Mr J o n a s p l a c i n g h e r s e l f o n
record as well.
10

A D V B A I T S E N G R A N G ATA : Th a n k y o u C h a ir.
A D V L E A G O B ATA B AT E :

G o o d m o r n in g C h a ir m y n a m e is L e a g o

Batabate[?]
C H A I R P E R S O N : G o o d m o r n i n g , g o o d a ft e r n o o n .
A D V L E A G O B ATA B AT E : G o o d a f te r n o o n .
C H A I R P E R S O N : Ye s .
A D V L E A G O B ATA B AT E :

I a p p e a r o n M r – o n b e h a lf o f Mr J o n a s .

I

a m h e r e o n a w a tc h i n g b r i e f a s w e d i d n o t r e c e iv e n o t i fic a ti o n t h a t Mr
H l o n g w a n e w o u ld b e p r o v id i n g e v id e n c e t o d a y.
C H A I R P E R S O N : Ye s .
20

A D V L E A G O B ATA B AT E : S o w e j u s t w i s h to p l a c e o n r e c o r d t h a t o u r
c li e n t r e s e r v e s h is r ig h ts .
CHAIRPERSON : Ja.
A D V L E A G O B ATA B AT E :

S h o u l d th e n e e d a r is e t o p r e s e n t a n

a p p lic a ti o n t o c r o s s - e x a m in e M r H lo n g w a n e .
CHAIRPERSON :

J a o k a y.

Thank you.

Okay let us have the oath

Page 107 of 168

04 DECEMBER 2019 – DAY 196
a d m i n is te r e d o r a ff ir m a ti o n .
A D V B A I T S E N G R A N G ATA : Th a n k y o u C h a ir.
C H A I R P E R S O N : A d m i n is te r e d .
R E G I S T R A R : P le a s e s t a te y o u r fu ll n a m e s f o r th e r e c o r d ?
M R H L O N G WA N E : Fa n a H l o n g w a n e .
C H A I R P E R S O N : P le a s e s p e a k u p a li t tl e b i t m o r e Mr H l o n g w a n e .
M R H L O N G WA N E : Fa n a H l o n g w a n e .
REGISTRAR:

Do you have any objection to making the prescribed

a ffir m a t io n ?
10

M R H L O N G WA N E : N o .
C H A I R P E R S O N : D o y o u s o le m n ly a ff ir m t h a t t h e e v i d e n c e y o u w il l g i v e
s h a l l b e th e tr u th ; t h e w h o l e t r u t h a n d n o t h in g b u t t h e tr u th , i f s o p le a s e
r a i s e y o u r r ig h t h a n d a n d s a y, I tr u ly a ffir m ?
M R H L O N G WA N E : I tr u ly a ff ir m .
C H A I R P E R S O N : T h a n k y o u v e r y m u c h . E s s e n t i a ll y Mr H lo n g w a n e t h e
e v i d e n c e t h a t is r e q u i r e d b y th e c o m m is s i o n fr o m y o u r e a lly r e l a te s t o
t h e e v i d e n c e g iv e n b y M r J o n a s a b o u t a m e e ti n g th a t y o u b o t h a g r e e d
took place on the 23 October 2015 at the Gupta residence in
S a x o n w o ld .

20

A s I u n d e r s t a n d th e p o s i ti o n y o u b o th a g r e e d t h a t a

m e e ti n g t o o k p l a c e , y o u d i s a g r e e a b o u t t h e c o n t e n t o f th e d is c u s s io n i n
t h a t m e e ti n g a n d w h e t h e r o r n o t th e r e w a s a m e m b e r o f th e G u p t a
f a m ily i n th e m e e t in g o r n o t. Ev e r y t h in g e ls e r e v o l v e s a r o u n d th a t a n d
t h e q u e s t io n s t h a t y o u w il l b e a s k e d w il l r e l a t e to t h a t .
understand?
M R H L O N G WA N E : T h a n k y o u C h a ir.

Page 108 of 168

Yo u

04 DECEMBER 2019 – DAY 196
CHAIRPERSON : Thank you.
A D V B A I T S E N G R A N G ATA : Th a n k y o u C h a ir.
C H A I R P E R S O N : M s R a n g a ta .
A D V B A I T S E N G R A N G ATA : Th a n k y o u f o r th a t .
C H A I R P E R S O N : Yo u m a y – y o u m a y – y o u m a y a h e a d .
A D V B A I T S E N G R A N G ATA :

T h a n k y o u f o r t h a t – f o r th a t [i n d i s t i n c t ]

y e s C h a ir. C h a ir f o r t o d a y ’s p r o c e s s w e – w e g o in g t o b e r e ly in g o n th e
f o ll o w i n g d o c u m e n ts .

W e h a v e i n fr o n t o f u s L L 8 w h ic h h a s g o t a n

in d e x o f d o c u m e n t s th a t w e a r e g o in g t o r e ly o n . B u t a s t h e C h a i r h a s
10

a lr e a d y c o r r e c t ly p o i n te d m o s t w e a r e g o i n g t o r e ly o n i t e m 1 . 7 .3 t h a t
a p p e a r s o n t h e i n d e x . S o w e g o i n g t o b e r e ly i n g o n t h r e e fil e s . C h a ir i f
I c a n e n t e r in t o th e r e c o r d w it h y o u r p e r m i s s i o n L L 8 .
C H A I R P E R S O N : H a n g o n I h a v e g o t t h r e e l e v e r a r c h fi le s h e r e .
A D V B A I T S E N G R A N G ATA : Ye s C h a ir.
CHAIRPERSON :

O n e is m a r k e d E x h ib i t L L a n d L L 1 A a n o t h e r o n e

E x h i b i t L L 1 B a n d t h e n E x h ib i t L L 8 .
A D V B A I T S E N G R A N G ATA : Ye s C h a ir.
CHAIRPERSON :

N o w h a s a n y o n e o f t h e s e b e e n p r e v i o u s ly a d m i tt e d

a lr e a d y ?
20

A D V B A I T S E N G R A N G ATA : Ye s C h a ir.
C H A I R P E R S O N : W h ic h o n e s ?
A D V B A I T S E N G R A N G ATA : L L 1 A a n d L L 1 B h a s a lr e a d y b e e n e n t e r e d
in t o t h e r e c o r d a s s u c h d u r i n g t h e e v i d e n c e o f M r D u d u z a n e .
C H A I R P E R S O N : T h e y h a v e b e e n a d m i t te d .
A D V B A I T S E N G R A N G ATA : Ye s .

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04 DECEMBER 2019 – DAY 196
CHAIRPERSON : Ja.
A D V B A I T S E N G R A N G ATA : Ye s .
CHAIRPERSON : And LL8?
A D V B A I T S E N G R A N G ATA : L L 8 is t h e n e w i n tr o d u c e d b y m e .
C H A I R P E R S O N : It h a s n o t b e e n ?
A D V B A I T S E N G R A N G ATA : Ye s C h a ir.
CHAIRPERSON : Admitted.
A D V B A I T S E N G R A N G ATA : Ye s , y e s .
C H A I R P E R S O N : A n d L L 8 c o n s i s ts o f ?
10

A D V B A I T S E N G R A N G ATA : L L 8 C h a ir i t c o n s is t s o f – i t c o n s is ts o f t h e
it e m 2 a n d i t e m 3 . I t e m 2 b e i n g t h e t r a n s c r i p ts o f M r D u d u z a n e Z u m a
f o r b o th d a y s t h e 8 O c t o b e r a n d th e 7 t h .

A n d i te m 3 t h a t is o t h e r

d o c u m e n ts in p a r t ic u l a r ly b e i n g t h e p h o n e a n a ly s is – p h o n e n u m b e r
a n a ly s is f o r M r J o n a s – M c e b e s i J o n a s a s w e ll a s th e d r a f t s t a te m e n t o f
M r B o n g a n i M o r e to g e th e r w it h a s i g n e d s ta t e m e n t t h a t is m o r e
id e n t ic a l t o 3 . 2 a n d 3 . 3 a r e m o r e i d e n t ic a l t h e y h a v e j u s t b e e n p r o v i d e d
f o r c o n v e n i e n c e a n d b e c a u s e t h e o t h e r o n e is n o t t h a t m u c h c l e a r.
CHAIRPERSON :

I a m t e m p t e d t o [ i n d is ti n c t ] t a k e o u t th e tr a n s c r ip t s

b u t t h a t i s g o in g t o c a u s e s o m e p r o b l e m s w i th t h e p l a n n in g t h a t y o u
20

h a v e a l r e a d y d o n e . S o w e w il l j u s t h a v e to m a k e d o .
A D V B A I T S E N G R A N G ATA : Ye s C h a ir.
CHAIRPERSON :

Ye s .

Th e l e v e r a r c h f il e c o n ta i n i n g th e tr a n s c r i p t o f

t h e e v id e n c e o f M r D u d u z a n e Z u m a a s w e ll a s – w h a t c o m e s a f te r t h a t?
A D V B A I T S E N G R A N G ATA : I t i s t h e p h o n e n u m b e r a n a l y s is .
C H A I R P E R S O N : N o , n o , n o . A f te r t h e t r a n s c r i p t o f M r D u d u z a n e Zu m a .

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04 DECEMBER 2019 – DAY 196
A D V B A I T S E N G R A N G ATA : O t h e r d o c u m e n t s .
CHAIRPERSON :

W e l l a f t e r 2 . 2 w h a t t r a n s c r i p t is th a t – is t h a t

a r g u m e n t o r is t h a t s t il l Mr Z u m a c o n t in u in g ?
A D V B A I T S E N G R A N G ATA : U n d e r 2 w e h a v e g o t 2 .1 b e i n g d a y 1 1 7 8
a n d 2 . 2 b e i n g d a y 1 7 9 . A n d t h e n i t is s u b - f o l d e r 3 .
CHAIRPERSON : Ja.
A D V B A I T S E N G R A N G ATA : Ye s .
C H A I R P E R S O N : B u t w h y i s i t s e p a r a t e d i f i t is t h e s a m e e v i d e n c e w i t h
2 .2 ?
10

A D V B A I T S E N G R A N G ATA : 2 . 2 i t is – i t i s 2 c o n t e n ts o f 1 a n d 2 b e i n g
separate dates .
CHAIRPERSON :

J a w h y – w h y s e p a r a t e t h e m ? B u t w e s e p a r a te d a y s

b u t it is th e s a m e w i t n e s s , s a m e e v i d e n c e .
A D V B A I T S E N G R A N G ATA : I t a k e t h a t p o in t C h a ir.
CHAIRPERSON :

J a i t c a u s e s c o n f u s io n .

O k a y t h e le v e r a r c h f il e

w h ic h c o n ta in s M r D u d u z a n e Z u m a ’s tr a n s c r ip t o f e v i d e n c e a n d a
d o c u m e n t m a r k e d S C C d i g i t a l fo r e n s ic te c h n o l o g i e s d a t a a n a l y s i s
o u t p u t w ill b e m a r k e d E x h i b it – w il l b e a d m it t e d a s E x h i b i t L L 8 .
A D V B A I T S E N G R A N G ATA : Th a n k y o u C h a ir.
20

C H A I R P E R S O N : O k a y.
A D V B A I T S E N G R A N G ATA : Th a n k y o u v e r y m u c h f o r th a t C h a ir.
CHAIRPERSON : Hm.
A D V B A I T S E N G R A N G ATA : C h a ir I w a n t to m o v e s tr a i g h t t o – t o o u r
fi le L L 1 B u n d e r i t e m 1 . 7 . 3 .
CHAIRPERSON : Huh-uh.

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04 DECEMBER 2019 – DAY 196
A D V B A I T S E N G R A N G ATA : A n d l e t m e g o t o – s tr a i g h t t o p a g e 8 1 3 .
M r H lo n g w a n e i f y o u – i f y o u g o t o f i l e – if y o u l o o k a t y o u r s p i n e y o u
w i ll fi n d t h a t t h is is m a r k e d a s L L 1 B a n d if y o u g o t o – i f y o u l o o k a t
y o u r e x tr e m e l e f t o n e a c h p a g e th e r e is r e d n u m b e r i n g .

Th a t is th e

n u m b e r th a t I w il l b e r e f e r r i n g t o w h e n I c a ll t h e n u m b e r s a n d I w i ll o n ly
b e c a l l in g th e l a s t n u m b e r. A r e y o u s tr u g g l in g w i th ?
M R H L O N G WA N E : I w il l m a n a g e . W h a t n u m b e r is i t?
A D V B A I T S E N G R A N G ATA : A r e y o u – o k a y p a g e 6 1 3 .
CHAIRPERSON : 613?
10

A D V B A I T S E N G R A N G ATA : Ye s D C J .
M R H L O N G WA N E : 6 1 3 .
CHAIRPERSON : On which Exhibit?
A D V B A I T S E N G R A N G ATA : Ex h i b it L L 1 . 1 B .
M R H L O N G WA N E : 6 1 3 ? I d o n o t s e e 6 1 3 .
A D V B A I T S E N G R A N G ATA : Th e y – th e y a r e c o m in g to a s s is t y o u .
CHAIRPERSON : Are you going to be using the right numbers?
A D V B A I T S E N G R A N G ATA : Ye s C h a ir. Ye s .
C H A I R P E R S O N : W h a t p a g e d i d y o u s a y w e m u s t g o to ?
A D V B A I T S E N G R A N G ATA :

20

C h a ir i t is p a g e 6 1 3 i t is a d o c u m e n t

e n t i tl e d A ff id a v i t o f M r F a n a H lo n g w a n e . A r e y o u t h e r e S ir ?
M R H L O N G WA N E : Ye s I a m .
A D V B A I T S E N G R A N G ATA : Ye s . C a n y o u i d e n t i fy – C h a ir a r e w e ?
CHAIRPERSON : Hm.
A D V B A I T S E N G R A N G ATA : Yo u – y o u g o t th e d o c u m e n t ?
C H A I R P E R S O N : Ye s .

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04 DECEMBER 2019 – DAY 196
A D V B A I T S E N G R A N G ATA :

t h a n k y o u C h a ir.

C a n y o u i d e n ti f y t h a t

document that appears on page 613?
M R H L O N G WA N E : Ye s i t is a n a ffi d a v it b y m y s e l f C h a ir.
A D V B A I T S E N G R A N G ATA :

O k a y t h a t i s y o u F a n a H lo n g w a n e , y o u

c o n fir m t h a t?
M R H L O N G WA N E : Ye s M a ’ a m .
A D V B A I T S E N G R A N G ATA : T h a n k y o u . I f y o u g o t o t h e s a m e p a t t e r n
in n u m b e r i n g i f y o u g o t o p a g e 6 2 2 .
M R H L O N G WA N E : Ye s .
10

A D V B A I T S E N G R A N G ATA : Ar e y o u t h e r e ? I f y o u l o o k a t t h e b o t to m
o f t h a t p a g e t h e r e is a n a m e t h e r e o r a s i g n a t u r e th e r e , c a n y o u id e n ti fy
that?
M R H L O N G WA N E : Ye s I c a n .
A D V B A I T S E N G R A N G ATA : I s t h a t y o u r s i g n a t u r e ?
M R H L O N G WA N E : Ye s i t is .
A D V B A I T S E N G R A N G ATA :

O k a y c a n y o u c o n fi r m th is – th a t th is i s

y o u r s t a t e m e n t o r y o u r a ffi d a v i t t h a t y o u h a v e s i g n e d ?
M R H L O N G WA N E : Ye s I c a n .
A D V B A I T S E N G R A N G ATA : C a n y o u c o n fi r m t h a t?
20

M R H L O N G WA N E : Ye s I d o .
A D V B A I T S E N G R A N G ATA : T h a n k y o u . C a n w e t h e n a c c e p t th a t t h e
c o n te n ts o f th is d o c u m e n t t h a t th is is w h a t – t h is is w h a t y o u s a y to t h i s
– t o th is – t o t h e C h a ir c o n t a i n e d i n t h i s a ffi d a v i t ?
M R H L O N G WA N E : C o r r e c t .
A D V B A I T S E N G R A N G ATA : Th a n k y o u . T h a n k y o u v e r y m u c h .

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04 DECEMBER 2019 – DAY 196
CHAIRPERSON :

J u s t t o a ls o c o n fir m i s t h is a n a ffi – is t h is t h e

a ffi d a v i t t h a t y o u f il e d w i t h t h e c o m m i s s i o n i n s u p p o r t o f y o u r
a p p lic a ti o n f o r L e a v e t o C r o s s - e x a m in e Mr J o n a s ?
M R H L O N G WA N E :

Ye s I – c a s u a ll y r e a d in g y e s .

That would be the

s a m e t h a n k y o u C h a ir.
C H A I R P E R S O N : Ye s . J a . O k a y.
A D V B A I T S E N G R A N G ATA : T h a n k y o u M r H l o n g w a n e . I a m g o i n g t o
tr y a n d a t t e m p t to – t o d e a l w it h is s u e s t h a t I t h i n k t h e y m i g h t n o t b e
t h a t m u c h o f a d i s p u t e . P le a s e t e ll m e i f y o u d o n o t a g r e e i f y o u t h i n k
10

it i s s o m e t h i n g t h a t w e n e e d t o d e b a t e o r i f y o u a g r e e w i t h i t .

Fo r

e x a m p l e I a m g o i n g to d e a l w i t h t h e is s u e o f t h e m e e t i n g th a t y o u h a d
w i t h M r D u d u z a n e a n d Mr J o n a s a n d y o u s e l f . C a n w e a c c e p t t h a t t h e
t h r e e o f y o u h a d a m e e t in g o n t h e 2 3 O c to b e r 2 0 1 5 ?
M R H L O N G WA N E : T h a t is c o r r e c t .
A D V B A I T S E N G R A N G ATA : O k a y c a n w e c o n fir m t h a t t h e m e e t i n g w a s
arranged by Mr Dud uzane Zuma?
M R H L O N G WA N E : C o r r e c t .
A D V B A I T S E N G R A N G ATA : C a n w e a ls o c o n fir m t h a t th e m e e ti n g w a s
in it i a l ly a r r a n g e d to t a k e p l a c e a t th e H y a tt H o te l in R o s e b a n k , w o u l d
20

y o u k n o w th a t ?
M R H L O N G WA N E : I c a n c o n fi r m t h a t t h e y h a d t h e m e e ti n g i n i t ia ll y a t
t h e H y a tt in R o s e b a n k n o t t h a t i t w a s a r r a n g e d t o b e a t t h e H y a tt in
Rosebank yes.
A D V B A I T S E N G R A N G ATA : O k a y.
C H A I R P E R S O N : O r m a y b e w e c o u ld – m a y b e w e c o u ld d o i t t h i s w a y.

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04 DECEMBER 2019 – DAY 196
M a y b e b e c a u s e it i s n o t a l o n g s to r y.

M a y b e w e c o u ld l e t Mr

H l o n g w a n e te ll m e i n h is o w n w o r d s h o w t h a t m e e ti n g c a m e a b o u t a n d
o n c e h e h a s fi n is h e d th e n y o u c a n a s k q u e s t io n s .
A D V B A I T S E N G R A N G ATA : Th a n k y o u .
CHAIRPERSON : Ja.
A D V B A I T S E N G R A N G ATA : Th a n k y o u .
CHAIRPERSON :

Just tell me in your own words as far as you know

h o w t h a t m e e ti n g c a m e a b o u t , w h o w a s a t t h e m e e ti n g , w h a t w a s th e
p u r p o s e o f th e m e e t i n g , w h a t w a s d is c u s s e d a t t h e m e e ti n g a n d in s o f a r
10

a s t h e r e m a y b e a n y th i n g t h a t h a p p e n e d a f t e r th a t i s r e l e v a n t m e n t io n i t
a s w e ll ?
M R H L O N G WA N E : T h a n k y o u C h a ir.
C H A I R P E R S O N : A n d – a n d fe ll f r e e t o t e l l m e a b o u t y o u r s e lf . I f y o u –
if th e r e is s o m e t h i n g a b o u t y o u r s e l f a n d t h e b a c k g r o u n d t h a t y o u th in k I
s h o u l d k n o w fo r p u r p o s e s o f to d a y b u t i f t h e r e is n o t h i n g i t i s f in e .
M R H L O N G WA N E :

T h e g e n e s is o f t h e m e e ti n g C h a ir w a s D u d u z a n e

Z u m a h i g h l i g h t in g t o m e th a t h e h a s h e a r in g r u m o u r s t h a t I w a s
a l le g e d ly b l a c k m a i li n g M r J o n a s . H e m e n ti o n e d i t s e v e r a l ti m e s o n
d i ff e r e n t o c c a s i o n s . I d i d n o t t a k e u p t h e m a t t e r a t t h e t i m e b e c a u s e I
20

t h o u g h t i t i m p r o b a b le b e c a u s e o f t h e r e l a ti o n s h i p I h a d w i th J o n a s .
A n d a f t e r s e v e r a l ti m e s o f tr y in g . . .
C H A I R P E R S O N : A n d y o u h a d b e e n fr ie n d s w i th h i m f o r a l o n g ti m e M r
Jonas?
M R H L O N G WA N E : T h a t is c o r r e c t C h a ir.
C H A I R P E R S O N : Ye s o k a y.

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04 DECEMBER 2019 – DAY 196
M R H L O N G WA N E :

Fr ie n d s a n d c o mr a d e s .

I b e l ie v e t h e s a m e s ti ll

p r e v a i ls n o w. H o w e v e r …
A D V B A I T S E N G R A N G ATA : S o r r y I d i d n o t g e t th a t .
M R H L O N G WA N E : I b e l ie v e t h e s a m e s ti ll p r e v a il s n o w.
A D V B A I T S E N G R A N G ATA : A lr ig h t .
M R H L O N G WA N E : I s ti ll b e li e v e h e is c o m r a d e . S o i t w o r r i e d m e a l o t .
I could not understand i t there is all m anner of conspiracies in the
p o li t ic a l s p a c e s o f ir s t , s e c o n d t i m e I d i d n o t ta k e u p t h e m a t t e r b u t th e
y o u n g m a n r a is e d it a g a in t h e n I s a id , l is t e n ju s t a r r a n g e a m e e ti n g a t
10

t h e s o u r c e o f t h e s t o r y a r r a n g e a m e e t i n g le t u s d e a l w i th th is is s u e
d e c is iv e l y b e c a u s e h e i s a m a n I h o ld i n h i g h r e g a r d . I d o n o t b e li e v e
in s t a b b in g a n y b o d y i n th e b a c k .
CHAIRPERSON :

L e t m e j u s t u n d e r s ta n d .

H is r e p o r ts t o y o u w a s –

w e r e th a t h e h a d h e a r d t h a t M r J o n a s w a s b la c k m a il in g y o u .

Is t h a t

what he said to you?
M R H L O N G WA N E : Ye s I th i n k t h e b a c k g r o u n d t o t h a t C h a ir is h e k n e w
I h a d a c lo s e r e l a ti o n s h i p w i t h J o n a s , a g e n tl e m a n I h e ld i n h i g h
e s t e e m a n d I t h i n k w h a t h e f o u n d a t o d d s is h o w I s p o k e h ig h ly o f h i m
a n d w h a t w a s p i c k in g u p i n th e m a r k e t p l a c e . S o h e r a is e d it s e v e r a l
20

ti m e s a n d t h e n i t w a s d i ff ic u l t f o r m e t o b e l ie v e t h a t , t h a t i s w h y I s a i d
le t u s h a v e th a t m e e ti n g .
C H A I R P E R S O N : Ye s ju s t o n e s e c o n d M r H l o n g w a n e . T h e t e c h n ic ia n s
if t h e y c a n h a v e a l o o k .
M R H L O N G WA N E : A m I n o t a u d i b le ?
M R H L O N G WA N E :

I d o n o t k n o w w h e t h e r – y o u a r e n o t a s c le a r ly

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04 DECEMBER 2019 – DAY 196
a u d ib le a s I w o u l d l ik e y o u b u t i t w a s h a p p e n in g w i t h th e p r e v i o u s
w i t n e s s a s w e l l b u t I t h o u g h t – s o it m a y b e th a t if – n o a c t u a ll y
b r i n g i n g i n t h e m i c r o p h o n e c l o s e r m i g h t c o m p lic a t e i t – t h e s i t u a t i o n
m o r e . M a y b e i f y o u a r e – y o u li f t q u i t e s o m e d i s ta n c e – ju s t ta lk n o w
b e f o r e t h e y d o a n y th in g w i th o u t c o m i n g c l o s e r. J u s t ta lk . W h a t – te ll
u s w h a t M r D u d u z a n e s a i d t o y o u th e n I a m g o i n g to s e e h o w a u d i b l e i t
is .
M R H L O N G WA N E :

W h a t h e fo u n d a t o d d s w a s th e c o n tr a d i c t i o n

b e t w e e n th e e s t e e m w h i c h I h e l d .
10

CHAIRPERSON :

Th a t is m u c h c le a r e r fo r m e .

T h a t is m u c h c le a r e r.

S o m a y b e d o n o t c o m e c l o s e j u s t s p e a k f r o m a d is ta n c e b u t I w i ll a s k
y o u t o r a is e y o u r v o ic e a b i t . O k a y I t h i n k l e t u s le a v e i t l i k e t h a t . I f
t h e r e is a p r o b le m t h e n w e w ill a s k th e t e c h n ic i a n s to c h e c k i f t h e r e is
a n y th in g .
A D V B A I T S E N G R A N G ATA : O k a y th a n k y o u .
CHAIRPERSON :

C a n y o u h e a r w e ll fr o m th a t s id e ?

A r e y o u a b l e to

hear?
A D V B A I T S E N G R A N G ATA : Ye s I c a n h e a r C h a ir.
CHAIR PERSON : Okay thank you.
20

A D V B A I T S E N G R A N G ATA : Th a n k y o u .
CHAIRPERSON : Okay you may continue.
A D V B A I T S E N G R A N G ATA : Yo u g o i n g t o p r o c e e d .
M R H L O N G WA N E : S o i n t h e i n t e r v e n i n g p e r i o d I m a d e a n u n d e r ta k i n g
w h ic h h e h a d a s k e d m e to m a k e t h a t I a m n o t g o in g t o r a i s e th e i s s u e
p r i o r t o t h a t m e e ti n g th a t I d e m a n d e d m u s t b e h e l d B e c a u s e i t w h a t – I

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04 DECEMBER 2019 – DAY 196
m i g h t h a v e b e e n h o t u n d e r t h e c o ll a r.

I m a d e th a t u n d e r t a k in g t h a t I

w i ll n o t r a is e it u n t il s u c h ti m e th a t w e h a v e a t h r e e w a y m e e t in g w it h
J o n a s . H e s o u g h t t o h a v e t h a t m e e t in g . I p la c e d t h e r e s p o n s i b i li ty o n
h i m s q u a r e ly. W e a r e r a i s i n g t h is i s s u e w it h s o m e b o d y w h o i s c l o s e to
m e w h a te v e r y o u r s o u r c e s a r e I w o u l d li k e y o u to [i n d i s t i n c t ] t h i s is s u e
in m y a n d h is p r e s e n c e .

W h i c h m e e ti n g w a s d u l y a r r a n g e d b e t w e e n

t h e m a n d J o n a s . T h e y m e t a t th e H y a t t fo r w h a t e v e r r e a s o n s . O n e w a s
a t N e d [ in d is ti n c t ] o n e w a s a t [i n d is t in c t] t h a t w a s th e n e a r e s t v e n u e f o r
t h e m . T h e H y a t t w a s a p r o b l e m f o r m e C h a ir. I s a i d t o b o t h o f t h e m I
10

c a l l e d M r Z u m a l e t u s fi n d a p r i v a t e v e n u e fo r t h is m e e ti n g . I c a l l e d M r
Z u m a o n th e s a m e t e l e p h o n e c o n v e r s a t io n I s p o k e t o J o n a s .

We

a g r e e d to m o v e t h e m e e t i n g . T h e y o u n g m a n [i n d i s t i n c t ] r e s p o n d r e a l ly
t o u s to a s c e r t a in a v e n u e n e a r b y. J a a s c e r t a i n t h e v e n u e w h i c h w a s
b o t h t h e b u s i n e s s c e n tr e a n d t h e r e s id e n c e .

I t h i n k t h a t is w h e r e h e

o p e r a t e d fr o m m o s t o f t h e t i m e . W e w e n t t o th a t v e n u e C h a ir a n d th e
m e e ti n g d u l y t o o k p l a c e .

G i v e n t h a t I w a s n o t s u p p o s e d t o r a is e a n y

is s u e b e f o r e i t w a s – fe ll u p o n t h e y o u n g m a n t o r a is e t h e is s u e f o r th e
r e a s o n o f t h a t p a r t ic u l a r m e e ti n g .
p l a c e w e h a d t o c l e a r t h e a ir.
20

n e e d e d t o c le a r t h e a ir.

B e c a u s e fo r a n y th in g e ls e to ta k e

I h a d m y o w n is s u e s in m y m i n d s o I

A n d th e p o i n t w a s d u ly r a i s e d .

Mr Jonas’

r e s p o n s e t o t h e b e s t o f m y r e c o ll e c ti o n w a s – h e s a i d h e d o e s n o t h a v e
a r e c o ll e c t io n o f e v e r h a v i n g s a i d t h a t . T h a t is w h a t h e s a i d . B e s i d e
t h e b a s ic n ic e ti e s i t w a s n o t a l o n g m e e t i n g . H e h a d a f li g h t t o c a tc h
a n d t h o s e k i n d s o f t h i n g s . M y o n ly b r ie f w a s t o e s t a b li s h th a t b e c a u s e
o f th e n a tu r e o f t h e r e l a ti o n s h i p t h a t w e h a d u n ti l t h e n . T h e r e w e r e a

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04 DECEMBER 2019 – DAY 196
n u m b e r t h i n g s h a p p e n i n g i n t h e p o l it ic a l s p a c e s o m e o f w h ic h r e s u l t e d
in t h i s c o m m i s s i o n . S o I j u s t n e e d e d t o u n d e r s t a n d w h a t w o u l d b e th e
is s u e a r o u n d m e ? W h y w o u l d I b e d r a g g e d i n to a n y – e s s e n ti a l ly t h a t
w a s i t i n b r i e f C h a ir.
A D V B A I T S E N G R A N G ATA : H o w l o n g w a s th e m e e ti n g ?
M R H L O N G WA N E : It w a s v e r y b r ie f M a ’a m I d o n o t k n o w.
A D V B A I T S E N G R A N G ATA :

I f y o u h a v e t o e s ti m a t e w a s fiv e – t e n

minutes?
M R H L O N G WA N E : I d o n o t w a n t t o m is le a d t h e C h a ir.
10

A D V B A I T S E N G R A N G ATA : O k a y.
M R H L O N G WA N E :

T h e m e e ti n g w a s v e r y b r ie f y o u c a n s a y u n d e r a

h a l f a n h o u r.
C H A I R P E R S O N : Tw e n ty m in u t e s , th ir ty m i n u t e s , o n e h o u r ?
M R H L O N G WA N E : Yo u c a n s a y a r o u n d h a lf a n h o u r.
CHAIRPERSON : hm.
A D V B A I T S E N G R A N G ATA : A b o u t t h i r t y m i n u t e s .
CHAIRPERSON : Hm;
M R H L O N G WA N E : J a .
A D V B A I T S E N G R A N G ATA :
20

S o I w a n t y o u to j u s t ta k e m e b a c k to

w h e n y o u m e t – w h e n y o u w e n t i n t o t h a t m e e t i n g w h o b r o k e t h e ic e ?
Who spoke?
M R H L O N G WA N E : W h o b r o k e t h e ic e ?
A D V B A I T S E N G R A N G ATA : Ye s w h o s t a r t e d ?
M R H L O N G WA N E : M a ’ a m l o o k w e a r r iv e d s i m u l ta n e o u s ly. W e g o t i n t o
the place.

N a t u r a ll y t h e is s u e i s n o t r a i s e d .

Page 119 of 168

We all greet.

I do not

04 DECEMBER 2019 – DAY 196
k n o w w h ic h p a r t is b r e a k i n g t h e ic e .

We greet.

We know each other

t h a t k i n d o f t h i n g s o I a m n o t s u r e w h ic h p a r t w o u l d b e b r e a k i n g t h e
ic e .
A D V B A I T S E N G R A N G ATA : Th e – t h e m a in i s s u e th a t w e a r e t h e r e t o
d is c u s s w h o s t a r te d o n i t? Wa s i t y o u r s e l f o r w a s it D u d u z a n e ?
M R H L O N G WA N E : It w a s Mr D u d u z a n e . I t h a d t o b e M r D u d u z a n e .
A D V B A I T S E N G R A N G ATA : R ig h t o k a y.
M R H L O N G WA N E : M y r e c o ll e c t io n te ll s m e t h a t y e s .
A D V B A I T S E N G R A N G ATA : A l r i g h t a n d w h e n h e s ta r t e d w h a t w a s h is
10

c o n te x t o f t h e d is c u s s i o n ? W h a t d id h e s a y ?
M R H L O N G WA N E : H u h ?
A D V B A I T S E N G R A N G ATA : W h a t d i d h e s a y e x a c tly ?
M R H L O N G WA N E : E x a c tl y I c a n n o t t e l l y o u b u t e s s e n ti a lly I k n o w y o u
g u y s t o b e m y s e n i o r c o mr a d e s ’ e t c e t e r a .

F a n a h o l d s y o u in h i g h

e s t e e m e t c e t e r a . I w a s p ic k i n g u p t h e s e t h i n g s in t h e m a r k e t p l a c e s o
it w a s i m p o r t a n t t o c l e a r i t u p . B e c a u s e y e s I d i d – I d o h o l d b o t h o f
t h e m i n h ig h e s t e e m . T h a t d o e s n o t c h a n g e n o w.
A D V B A I T S E N G R A N G ATA :

Okay alright.

Yo u m e n t io n e d t h a t w h e n

y o u – w h e n y o u w e r e a d v is e d th a t t h e m e e ti n g w a s g o in g t o t a k e p l a c e
20

a t t h e H y a t t y o u h a d a p r o b l e m w i th t h e v e n u e
M R H L O N G WA N E : Ye s .
A D V B A I T S E N G R A N G ATA :

O f t h e H y a tt .

W h a t e x a c t ly w a s t h e

p r o b le m w i t h t h e H y a t t H o t e l ?
M R H L O N G WA N E : T h e y w e r e s e a t e d a t th e l o b b y.
C H A I R P E R S O N : I a m s o r r y. I d o n o t k n o w w h e th e r i t is y o u r v o ic e o r

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04 DECEMBER 2019 – DAY 196
t h e m ic r o p h o n e is t o o f a r fr o m y o u .
A D V B A I T S E N G R A N G ATA : O k a y I w il l …
C H A I R P E R S O N : It lo o k s l ik e …
A D V B A I T S E N G R A N G ATA : Th a n k y o u , t h a n k y o u C h a ir.
C H A I R P E R S O N : I c a n n o t h e a r a n y b o d y t o d a y.
A D V B A I T S E N G R A N G ATA : T h a n k y o u C h a ir. I ju s t – ja s o I a p o l o g is e
f o r t h a t. I w a n t e d t o k n o w y o u r c o n c e r n w i t h t h e …
C H A I R P E R S O N : Ye s t h a t i s a – t h a t i s a b e t t e r v o l u m e . S o – s o i f y o u
raise your voice it becomes quite audible.
10

A D V B A I T S E N G R A N G ATA : Th a n k y o u C h a ir.
CHAIRPERSON : Hm.
A D V B A I T S E N G R A N G ATA :

C a n y o u t e l l u s w h a t e x a c t ly w h a t is th e

p r o b le m – w h a t m a d e y o u m a d e u n c o m f o r t a b l e h a v i n g t h e m e e t in g a t
t h e H y a tt H o te l?
M R H L O N G WA N E : Pr iv a c y M a ’ a m .
A D V B A I T S E N G R A N G ATA : Pr iv a c y.
M R H L O N G WA N E : Ye s M a ’ a m .
A D V B A I T S E N G R A N G ATA : T h e – a n d t h e h o t e l c o u l d n o t p r o v id e y o u
with a private rooms?
20

M R H L O N G WA N E : H o w ?
A D V B A I T S E N G R A N G ATA :

T h e h o te l h a s – i t d i d n o t h a v e t h e

b u s i n e s s s e c ti o n w h e r e y o u c a n m a k e u s e o f th e b u s i n e s s s id e o f t h e
m e e ti n g o r t h e r o o m s ?
M R H L O N G WA N E :

O k a y C h a ir o u r c h a n c e o f t h a t n a tu r e g e n e r a l ly

h a v e t h o s e f a c il it i e s a v a il a b l e .

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04 DECEMBER 2019 – DAY 196
A D V B A I T S E N G R A N G ATA : Ye s .
M R H L O N G WA N E : T h e r e w a s ti m e p r e s s u r e . S o m e b o d y h a d t o c a t c h a
fl ig h t . In o r d e r t o g e t th a t fa c i li ty t h e r e i s
1 . Av a i la b ili t y is s u e s .
2 . T h e r e is ti m e is s u e s . Yo u n e e d t o b o o k .
3 . T h e r e is c o s t i s s u e s .
S o it is n o t a g iv e n th a t b e c a u s e y o u a r e th e r e y o u c a n w a l k i n t o a n y
private room no.
CHAIRPERSON : Hm.
10

A D V B A I T S E N G R A N G ATA :

So you could not consider the Hyatt

b e c a u s e it n e e d e d t o h a v e b e e n p r e a r r a n g e d f o r t h a t f a c il it y f o r
b u s i n e s s m e e ti n g s ?
M R H L O N G WA N E : I d id n o t h e a r t h a t .
A D V B A I T S E N G R A N G ATA : S o y o u c o u l d n o t h a v e t h e m e e t in g a t th e
H y a tt f o r p r iv a c y r e a s o n s b u t b e c a u s e y o u c o u l d n o t h a v e a r r a n g e d a
business room at that time?
M R H L O N G WA N E :

O k a y c o n te x t M a ’ a m a g a i n .

T h e m e e ti n g a t t h e

H y a tt t h e c o n v e r g e n c e w a s n o t a r r a n g e d b y m y s e l f .
A D V B A I T S E N G R A N G ATA : Ye s .
20

M R H L O N G WA N E :

The two gentlemen, one was nearby do – in the

[i n d is t in c t] m e e t i n g f in is h e d s o w h a t w a s t h e e a s ie s t p l a c e fo r th e m t o
meet.

They converged at the Hyatt.

S o p r e a r r a n g e m e n ts d o e s n o t

a r i s e b e c a u s e I w a s n o t p a r t y t o t h a t.
A D V B A I T S E N G R A N G ATA : A lr ig h t .
M R H L O N G WA N E :

S o w h e n t h e y w e r e t h e r e th e y t o l d m e t h e y w e r e

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04 DECEMBER 2019 – DAY 196
t h e r e I r a is e d t h e i s s u e o f p r iv a c y.

So the prearrangement could not

arise at the time.
A D V B A I T S E N G R A N G ATA :

O k a y.

I a m ju s t n o t g e t t in g – g e tt i n g t o

y o u r r e s p o n s e o n th is o n e b e c a u s e i f p r iv a c y w a s t h e m a i n is s u e a n d i f
y o u h a v e t o l o o k a t t h e ti m e p r e s s u r e s o b v i o u s ly I w o u l d i m a g i n e t h a t
y o u t a lk in g a b o u t M r J o n a s b e c a u s e h e h a d t o g o t o t h e a ir p o r t. W o u l d
it n o t h a v e b e e n q u i c k e r t o h a v e a c tu a lly t h e h o t e l t o p r o v id e y o u w i t h
t h a t fa c i li ty r a t h e r t h a n t o g o o u ts id e t h e h o te l?
M R H L O N G WA N E :
10

I d o n o t th i n k i t w o u ld h a v e b e e n q u i c k e r. L ik e I

s a i d in o r d e r t o g e t a r o o m y o u n e e d to p r e a r r a n g e a n d 2 . I ts
a v a i la b ili ty. T h e s e p la c e d a r e a lw a y s b u s y. 3 . T h e r e is a c o s t e le m e n t .
A D V B A I T S E N G R A N G ATA : I u n d e r s t a n d y o u a n d t h e y c o u ld n o t h a v e
e s t a b li s h e d a t a t t h a t t i m e i f i t w a s a v a il a b l e ?

We – I am not hearing

t h a t i t w a s n o t a v a i la b le I a m h e a r in g t h a t a v a i la b ili t y.

So what I am

a s k in g is w a s i t a s k e d a n d th e y s a id t h e y w e r e f u l l?
M R H L O N G WA N E : T h e is s u e n e v e r a r o s e .
A D V B A I T S E N G R A N G ATA : O k a y.
C H A I R P E R S O N : I s a i d w e m u s t fi n d a p r iv a t e p la c e i t i s a h o t e l t h e y
a r e i n t h e l o b b y. T h e is s u e n e v e r a r o s e . I a s k e d f o r a p r iv a te s p a c e .
20

A D V B A I T S E N G R A N G ATA : A lr i g h t . A n d w h e n y o u – w h e n y o u a s k e d
a b o u t t h e p r iv a c y is i t D u d u z a n e w h o s u g g e s t e d a n a lt e r n a t iv e v e n u e ?
C H A I R P E R S O N : Mr D u d u z a n e Z u m a .
A D V B A I T S E N G R A N G ATA : Mr D u d u d u z a n e Z u m a .
CHAIRPERSON : Not Duduzane.
A D V B A I T S E N G R A N G ATA : S o r r y S ir.

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M R H L O N G WA N E : A s fa r a s I c a n r e m e m b e r y e s M a ’a m .
A D V B A I T S E N G R A N G ATA : A n d w h a t a d d r e s s d id h e s u g g e s t f o r y o u ?
M R H L O N G WA N E : T h e a d d r e s s w a s s e n t t o m e .
A D V B A I T S E N G R A N G ATA : H e s e n t it t o y o u ?
M R H L O N G WA N E :

The address was sent to me.

T h e y w e r e b o th o f

t h e m s e a t e d th e r e s o th e y w o u ld h a v e c o m m u n ic a t e d t h e a d d r e s s t o
e a c h o th e r y e s .
A D V B A I T S E N G R A N G ATA :

T h e y s e n t v i a s m s o r h o w w a s it s e n t t o

you?
10

M R H L O N G WA N E :

J a s e n t to m e o r c o m m u n ic a te d v e r b a ll y I d o n o t

r e m e m b e r.
A D V B A I T S E N G R A N G ATA : A lr ig h t .
M R H L O N G WA N E : Ye s M a ’ a m .
A D V B A I T S E N G R A N G ATA : A n d w h a t a d d r e s s w a s th a t ?
M R H L O N G WA N E :

I t w a s i n S a x o n w o ld M a ’ a m w h e r e w e h a d a

m e e ti n g .
A D V B A I T S E N G R A N G ATA : N u m b e r 5 ?
M R H L O N G WA N E : It c o u l d h a v e b e e n n u m b e r 5 y e s .
A D V B A I T S E N G R A N G ATA : W h e n y o u r e c e iv e d th a t a d d r e s s o r w h e n i t
20

w a s c o m m u n i c a t e d t o y o u w a s it f a m il ia r t o y o u ?
M R H L O N G WA N E :

W h a t w a s fa m i li a r ?

Saxonwold?

Ye s i t w a s

f a m ili a r.
A D V B A I T S E N G R A N G ATA :

T h e a d d r e s s i t s e l f d id y o u h a v e a n i d e a

w h a t k i n d o f a p la c e i t w a s ? W h e t h e r i t w ill p r o v i d e y o u w i th t h e s a m e
p r i v a c y th a t y o u d e s i r e d ?

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04 DECEMBER 2019 – DAY 196
M R H L O N G WA N E : Ye s .
A D V B A I T S E N G R A N G ATA : Yo u c o u ld – y o u w e r e s a t is fi e d ?
M R H L O N G WA N E :

T h a t i s h is w o r k s p a c e .

It had the necessary

f a c i li t ie s y e s .
A D V B A I T S E N G R A N G ATA :

A t th a t s t a g e d i d y o u u n d e r s t a n d t h a t

address to be a residence area?
M R H L O N G WA N E : Ex c u s e m e ?
A D V B A I T S E N G R A N G ATA :

D i d y o u u n d e r s t a n d th a t a d d r e s s to b e a

r e s id e n ti a l p l a c e ?
10

M R H L O N G WA N E : Ye s m a ’a m . I u n d e r s t o o d i t t o b e b o t h a r e s id e n ti a l
p l a c e a n d a b u s in e s s c e n tr e , b e c a u s e I h a v e in t e r a c t io n s w i t h th e
D u d u z a n e o v e r a p e r i o d o f ti m e .
A D V B A I T S E N G R A N G ATA :

S o y o u h a v e b e e n t h e r e b e fo r e - b e f o r e

that - on that date?
M R H L O N G WA N E : A t th is p o in t I d o n o t r e m e m b e r m a ’ a m . I t i s a l o n g
ti m e a g o .
A D V B A I T S E N G R A N G ATA : I j u s t w a n t t o - t o i m a g i n e t h i s . Yo u - y o u
a r e n o t h a p p y w i th - w i t h th e a d d r e s s t h a t y o u - y o u h a v e b e e n p r o v i d e d
a n d y o u s u g g e s t t h a t y o u n e e d a p r iv a t e s p a c e a n d th e n t h e y g iv e y o u
20

a n a l t e r n a t iv e s p a c e o r a n a d d r e s s w h i c h h a p p e n s t o b e 5 S a x o n w o l d
w h ic h I a m s u r e y o u c a n a g r e e th a t i t is - i t i s a G u p t a r e s i d e n c e . Yo u c a n y o u c o n fir m t h a t?
M R H L O N G WA N E : W h a t w a s t h e q u e s ti o n m a ’a m ?
A D V B A I T S E N G R A N G ATA :

C a n y o u c o n fir m t h a t 5 S a x o n w o ld is a

G u p t a r e s id e n c e - r e s i d e n c e ?

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04 DECEMBER 2019 – DAY 196
M R H L O N G WA N E :

I d o n o t u n d e r s t a n d t h e s e n s e o f t h e q u e s ti o n

though.
CHAIRPERSON :

S h e i s a s k in g w h e t h e r y o u a r e a b l e to c o n f ir m t h a t

t h e p l a c e w h e r e y o u h a d t h i s m e e ti n g w a s a r e s id e n c e f o r t h e G u p ta
f a m ily.
M R H L O N G WA N E : Ye s . O f c o u r s e . C e r ta in ly.
A D V B A I T S E N G R A N G ATA : A n d a t t h a t t i m e w h e n y o u w e r e g iv e n th e
a d d r e s s y o u - y o u i d e n ti f ie d t h a t a s th e G u p ta r e s id e n c e ?
M R H L O N G WA N E : D u d u z a n e h a d a b u s i n e s s c e n tr e w h e r e h e o p e r a te d
10

fr o m . I h a v e k n o w n t h e g e n t l e m a n . S o I k n e w a b o u t t h is th i n g . J u s t
lik e h e c a m e t o m y h o u s e .

I - I k n e w h is - h is b u s in e s s .

I do not

understand what is the point.
A D V B A I T S E N G R A N G ATA : Pl e a s e f o r g iv e m e s ir. I a m j u s t …
C H A I R P E R S O N : W e l l M r H l o n g w a n e t h e q u e s t io n is w h e th e r y o u w e r e
g iv e n t h e a d d r e s s y o u k n e w o r w e r e to l d th a t t h e v e n u e t o w h i c h t h e
m e e ti n g w a s s h if t e d w a s a G u p t a r e s i d e n c e .
M R H L O N G WA N E : I c a n c o n fi r m th a t C h a ir. I u n d e r s t a n d t h e q u e s t io n
b e t t e r n o w. I c o n f ir m t h a t . T h a n k y o u .
C H A I R P E R S O N : O k a y. T h a n k y o u .
20

M R H L O N G WA N E : ( In t e r v e n e s ) .
A D V B A I T S E N G R A N G ATA : Th a n k y o u f o r th a t C h a ir.
M R H L O N G WA N E : M y a p o l o g i e s .
C H A I R P E R S O N : O k a y.
M R H L O N G WA N E : T h a t is … ( in t e r v e n e s ) .
C H A I R P E R S O N : O k a y.

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04 DECEMBER 2019 – DAY 196
A D V B A I T S E N G R A N G ATA :

So we now under - understand that when

y o u r e c e i v e d t h e a d d r e s s y o u - y o u k n e w a t th e t i m e t h a t y o u w e r e n o w
g iv e n t h e G u p t a r e s i d e n c e a d d r e s s a n d t h a t y o u a r e g o i n g t o h a v e y o u r
m e e ti n g a t t h e G u p t a r e s i d e n c e . A t s o m e - a th ir d p a r ty ’s r e s i d e n t ia l
area.
M R H L O N G WA N E : I k n e w t h e a d d r e s s . T h ir d p a r ty o r n o t . T h a t is a
d i ff e r e n t is s u e , b e c a u s e t h e y o u n g m a n w o r k e d fr o m t h e r e .
A D V B A I T S E N G R A N G ATA :

Yo u w e r e c o m f o r t a b l e g o in g i n t o t h a t - in

t h a t - i n th a t a r e a ?
10

M R H L O N G WA N E :

Ye s .

I t is a v e n u e t h a t is p r i v a t e .

Ye s .

I was

comfortable.
A D V B A I T S E N G R A N G ATA : L e t m e a s k y o u t h i s . A r e y o u a w a r e t h a t
Duduzane owns a house at Saxonwo ld?

Ac t u a l ly w h e n h e g a v e h is

e v i d e n c e h e s a i d t o t h e C h a ir th a t h e is r e s id e n c e is m o r e o r le s s a b o u t
6 0 0 m e tr e s fr o m - fr o m t h e G u p ta r e s id e n c e .
M R H L O N G WA N E : T h a t is c o r r e c t .
A D V B A I T S E N G R A N G ATA : A r e y o u a w a r e o f th a t ?
M R H L O N G WA N E : Ye s . I a m a w a r e .
A D V B A I T S E N G R A N G ATA :
20

Can I - can I ask why you - you - a

m e e ti n g w a s n o t - d i d n o t ta k e p l a c e a t h is r e s id e n c e ?
CHAIRPERSON : Well …
M R H L O N G WA N E : I …
CHAIRPERSON :

Remember that - as I understand his evidence.

s a i d i t w a s Mr D u d u z a n e Z u m a w h o d e c i d e d w h i c h v e n u e .
A D V B A I T S E N G R A N G ATA : Ye s C h a ir.

Page 127 of 168

He

04 DECEMBER 2019 – DAY 196
CHAIRPERSON : So it is not him.
A D V B A I T S E N G R A N G ATA : Ye s .
CHAIRPERSON : Hm.
A D V B A I T S E N G R A N G ATA : O k a y. I c a n - I c a n n o t t a k e i t a n y fu r t h e r
C h a ir. S o y o u - y o u g o i n t o t h i s - i n - in t o th is h o u s e . I t is y o u r s e l f . I t
is Mr J o n a s .

I t is M r D u d u z a n e a n d y o u e n t e r t h e h o u s e .

Is i t in -

in s i d e t h e h o u s e o r is i t - is i t a s e p a r a t e - is a s e p a r a t e o ffi c e w h e r e
y o u c a n w o r k o r i s i t i n s i d e t h e - th e - is i t - is a s e p a r a t e b u s i n e s s s i d e
where you can wo rk?
10

M R H L O N G WA N E : It is - i t i s a lo u n g e m a ’a m .
A D V B A I T S E N G R A N G ATA : I t i s a lo u n g e ?
M R H L O N G WA N E : J a . M e e ti n g l o u n g e .
A D V B A I T S E N G R A N G ATA : I t i s a m e e ti n g l o u n g e ?
M R H L O N G WA N E : Ye s .
A D V B A I T S E N G R A N G ATA :

Is i f o ffic e - d o e s i t h a v e o ff ic e u te n s il s

lik e y o u r p r o p e r b o a r d r o o m t a b l e s ?
M R H L O N G WA N E : It is a l o u n g e m a ’ a m . A l o u n g e .
CHAIRPERSON : Hm.
A D V B A I T S E N G R A N G ATA : O k a y.
20

CHAIRPERSON : Hm.
A D V B A I T S E N G R A N G ATA : S o y o u - y o u e n t e r t h e h o u s e a n d a n y b o d y
that received you when you entered the hou se?
M R H L O N G WA N E : Mr D u d u z a n e Z u m a w a s f a m il ia r w it h th e p l a c e .
A D V B A I T S E N G R A N G ATA : O k a y.
M R H L O N G WA N E : S o h e l e d u s t o th e r e l e v a n t lo u n g e .

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04 DECEMBER 2019 – DAY 196
A D V B A I T S E N G R A N G ATA :

Wa s t h e r e s o m e b o d y i n t h e h o u s e w h e n

y o u e n te r e d ?
M R H L O N G WA N E : Th e h o u s e w a s b u z z i n g . Ye s . I a m s u r e t h e r e a r e
p e o p l e . Th e s e c u r i ti e s . P e o p le w a lk in g a r o u n d .
A D V B A I T S E N G R A N G ATA :

Alright.

E x c e p t fo r t h e th r e e o f y o u d i d

a n y o n e j o i n y o u f o r th e m e e ti n g ?
M R H L O N G WA N E : E x c e p t fo r t h e t h r e e o f u s d u r i n g th e c o u r s e o f t h e
m e e ti n g m a ’ a m th e r e w e r e a n u m b e r w h a t I w o u l d c a l l i n te r r u p ti o n s .
S o m e b o d y c o m i n g f o r c o ff e e .
10

S o m e b o d y f o r t h is .

Somebody looking

f o r th is , b u t a n y b o d y jo in i n g t o s i t u s f o r t h e s u b s t a n tiv e m e e ti n g . N o
m a ’a m .
CHAIRPERSON :

A s I u n d e r s ta n d t h e p o s i ti o n y o u w e r e fr ie n d s w i th

b o t h Mr J o n a s a n d Mr D u d u z a n e Z u m a . Is t h a t c o r r e c t ?
M R H L O N G WA N E : T h a t is c o r r e c t C h a ir.
CHAIRPERSON :
concerned

the

Ye s a n d a s fa r a s y o u k n o w a n d a s f a r a s y o u a r e
purpose

fo r

th e

m e e t in g

was

to

d is c u s s

what

M r D u d u z a n e Z u m a h a d r e p o r t e d t o y o u a b o u t r u m o u r s o f b la c k m a il in g
a n d t o d is c u s s th is in t h e p r e s e n c e o f M r J o n a s .

S o th a t y o u c o u l d

h e a r w h a t h e h a s to s a y ? Is th a t r i g h t?
20

M R H L O N G WA N E : T h a t is r i g h t. J a .
C H A I R P E R S O N : Ye s . N o w y o u - y o u d i d s a y t h a t M r D u d u z a n e Z u m a
is t h e o n e w h o - i f I u n d e r s t o o d y o u c o r r e c t ly - i n tr o d u c e d t h e s u b je c t.
Is t h a t c o r r e c t ?
M R H L O N G WA N E : Ye s s ir.
C H A I R P E R S O N : Ye s . N o w l e t u s - l e t u s l o o k a t t h e c o n t e n t o f w h a t

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04 DECEMBER 2019 – DAY 196
h e s a i d in i n tr o d u c in g t h e s u b j e c t . Ar e y o u a b le t o r e m e m b e r w h e th e r
h e s a i d I h e a r d f r o m s o a n d s o t h a t y o u a r e b l a c k m a i li n g M r H lo n g w a n e
a n d g a v e w h a te v e r d e t a i ls a n d I r e p o r t e d t h is t o M r H l o n g w a n e a n d th a t
is w h y w e h a v e th is m e e ti n g . S o a s to fi n d o u t fr o m y o u w h a t y o u k n o w
a b o u t th is . Ar e y o u a b l e to r e m e m b e r h o w h e p u t it w i th o u t n e c e s s a r i ly
lo o k in g fo r h is e x a c t w o r d s ?
M R H L O N G WA N E : C h a ir, a s I s a i d e a r li e r i t t o o k m e s o m e t i m e b e fo r e I
s a i d h e s h o u l d c o n v e n e t h e m e e ti n g .

I t h i n k h is is s u e w a s h e r e I a m

s p e a k i n g h i g h l y o f s o m e b o d y a n d t h i s is w h a t h e is p i c k i n g u p .
10

So it

h a p p e n e d s e v e r a l ti m e s . T h e n I s a i d o k a y. C o n v e n e t h i s m e e ti n g . W e
w i ll fl a s h o u t t h e i s s u e s t h e r e . I w a s v e r y k e e n o n k n o w i n g t h e s o u r c e
o r s o u r c e s . I a m k e e n u p t o n o w.
I w a s h o p i n g a t s o m e p o in t o r d u r i n g t h is C o m m i s s i o n
s o m e b o d y w il l c o m e u p w i t h t h e s t o r y , b e c a u s e t h e r e w a s a r u m o u r th a t
m e n ti o n e d a l l s o r t o f g a m e s . H e i n d i c a t e d th a t th is is a s e t u p . O n e
h o l d s i n h i g h e s t e e m . T h e r e i s t h is th i n g h a p p e n in g i n t h e m a r k e t p l a c e
a n d h e th o u g h t it w o u l d b e i m p o r t a n t t o - t o c le a r t h e m a t te r. S o t o t h e
b e s t o f m y r e c o ll e c t io n s ir i t w a s fa c ts a r o u n d t h e d i s c u s s io n s a r o u n d
t h o s e f a c ts .

20

CHAIRPERSON :

So

from

what you

say

it seems

to

me

that

M r D u d u z a n e Zu m a d i d n o t a t th a t m e e t in g s a y to Mr J o n a s a n d t o y o u
w h o t h e s o u r c e o f t h e r u m o u r w a s . Is t h a t r ig h t ?
M R H L O N G WA N E : Ye s . To t h e b e s t o f m y r e c o l le c ti o n s ir. N o .
C H A I R P E R S O N : Ye s .
M R H L O N G WA N E :

A n d in m y - in m y c a s e w h a t w a s m o r e i m p o r t a n t

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04 DECEMBER 2019 – DAY 196
w a s t o lo o k th e m a n i n t h e f a c e , b e c a u s e h e is a fr i e n d . Is t h is t h i n g
r e a s o n a b ly p o s s i b l e ? C o u ld i t b e s a i d a n d I w a s h o p i n g th e d is c u s s i o n
w i ll g o f u r th e r a n d g e t in t o th e d e b a t e .
CHAIRPERSON :
q u e s t io n .

Ye s .

D o - d o y o u r e m e m b e r o r l e t m e p u t th is

I t w o u l d s e e m fr o m w h a t y o u h a v e s a i d t h a t e v e n o n t h e

o c c a s i o n s w h e n M r D u d u z a n e Zu m a t o l d y o u a b o u t t h e s e r u m o u r s o r
r e p o r t s th a t h e m a d e t o y o u b e fo r e y o u a s k e d h i m t o c o n v e n e a m e e ti n g
w i t h M r J o n a s . I t s e e m s t h a t h e d i d n o t te ll y o u t h e s o u r c e e v e n a t t h a t
ti m e . Is t h a t r ig h t ? A m I r i g h t ?
10

M R H L O N G WA N E : T h a t is c o r r e c t s ir.
CHAIRPERSON : Did you ask him for the so urce? Where do you take
t h is fr o m ?
M R H L O N G WA N E : I d u l y a s k e d s ir, b u t t h e s o u r c e w a s n e v e r d i v u l g e d .
C H A I R P E R S O N : Ye s . S o y o u a s k e d h i m e v e n b e fo r e y o u a s k e d h i m t o
c o n v e n e a m e e t in g w h e n h e m a d e t h e r e p o r ts . Yo u a s k e d h i m f o r t h e
s o u r c e a n d h e d i d n o t g iv e y o u .
M R H L O N G WA N E : I a s k e d a n d I w a s h o p in g th a t i t w o u ld c o m e o u t a t
t h a t m e e ti n g , b u t n o .
CHAIRPERSON :

20

once to you.

Ye s a n d y o u s a i d h e m a d e t h e s e r e p o r ts m o r e th a n
B e f o r e y o u a s k e d h i m t o c o n v e n e a m e e ti n g w i t h

Mr Jonas.
M R H L O N G WA N E : A s f a r I - a s I c a n r e m e m b e r. Ye s . H e r a i s e d t h e
matter more than - more than once.
C H A I R P E R S O N : Ye s .
M R H L O N G WA N E : Ye s .

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04 DECEMBER 2019 – DAY 196
C H A I R P E R S O N : A r e y o u a b l e t o g iv e o t h e r d e t a ils a b o u t t h i s r u m o u r
o r a l le g a ti o n o f b l a c k m a i li n g th a t h e t o ld a b o u t o r w a s i t s i m p ly t h a t t h a t th e r e a r e r u m o u r s t h a t - I u n d e r s ta n d t h a t t h e r e a r e r u m o u r s o r
t h e r e a r e r u m o u r s t h a t M r J o n a s is b la c k m a il in g y o u . A r e y o u a b l e t o
r e m e m b e r o t h e r d e ta il s a b o u t t h i s b l a c k m a ili n g ? W h a t w a s i t a b o u t a n d
s o o n o r w e r e y o u n e v e r g iv e n th is i n f o r m a t i o n ?
M R H L O N G WA N E : C h a ir, a ll I c a n r e m e m b e r is b r o a d l y t h e s i t u a ti o n a t
t h e ti m e . ( I n d is ti n c t) a l l m a n n e r o f a g e n d a s , b u t I a m n o t a b l e t o s a y
a n y o t h e r d e ta il s t h a t I r e m e m b e r, b u t I w a s h o p i n g w i t h ti m e t h o s e
10

d e t a i ls w e r e g o i n g t o e m e r g e .
CHAIRPERSON :

Hm.

S o a m - a m I - is m y u n d e r s t a n d in g o f th e

e s s e n c e o f w h a t M r D u d u z a n e t o ld y o u o n t w o o r s o m o r e o c c a s i o n s
b e f o r e y o u a s k e d h i m t o c o n v e n e a m e e t in g .

Is my understanding of

t h e e s s e n c e o f w h a t h e s a i d t o y o u c o r r e c t ? N a m e ly t h a t h e s a id h e h e h a d h e a r d r u m o u r s t h a t M r J o n a s w a s b l a c k m a i li n g y o u .

Is m y

u n d e r s t a n d in g o f w h a t h e s a i d t o y o u c o r r e c t ?
M R H L O N G WA N E : T h a t h e h a d h e a r d r u m o u r s ?
CHAIRPERSON :

Ye s .

I ju s t w a n t t o m a k e s u r e I u n d e r s t a n d c l e a r ly

what report he made to you that made you sa y to him you must convene
20

a m e e t in g w i t h Mr J o n a s . S o I j u s t w a n t to - to g o b a c k . H o w h e p u t i t.
M R H L O N G WA N E : H e p u t i t o v e r a p e r io d o f t i m e C h a ir a n d , b e c a u s e
h e w a s in s i s t e n t u p o n i t , b e c a u s e m y v i e w w a s - t h e v i e w I h a d w a s
d i ff e r e n t . S o I s u s p e c t m a y b e o u t o f a s e n s e c o n c e r n t h a t I h a v e g o t
t h is p a r tic u la r v i e w a n d t h e r e is s o m e t h in g e ls e g o i n g o n . S o h e r a is e d
it o v e r a p e r i o d o f ti m e . T h a t t h e r e is t h i s p a r t ic u l a r t h i n g . S o i n s t e a d

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o f b e in g t o l d b e c a r e f u l a r o u n d w h o e v e r a n d w h a t e v e r t h a t k i n d o f
thing.
I d e c id e d t h a t le t u s g e t th is th in g c la r i fi e d .

The tone was

s i m il a r. T h e th e m e w a s - w a s th e s a m e . S o y o u - y o u a r e c o r r e c t s ir.
Yo u a r e u n d e r s t a n d in g t h a t t h e t o n e a n d t h e m e w a s s i m i l a r a b o u t th is
p a r t ic u l a r m a t te r, b e c a u s e I w a s a l s o c o n s i s te n t in m y v ie w s o f th e
r e l a ti o n s h i p . S o i t c le a r ly b o th e r e d m e . I s a id o k a y. L e t u s d e a l w i t h
t h is .
C H A I R P E R S O N : S o m y u n d e r s ta n d i n g is c o r r e c t o f w h a t h e r e p o r t e d to
10

you in essence?
M R H L O N G WA N E : In e s s e n c e . Th a t is c o r r e c t , s ir.
CHAIRPERSON :

Ye s a n d - b u t w h a t h e w a s b l a c k m a i li n g y o u a b o u t

w a s a ls o n o t to ld t o y o u b y M r D u d u z a n e Z u m a o r w a s it ?
M R H L O N G WA N E : W h a t I w a s s u p p o s e d t o b e b l a c k m a il i n g h i m a b o u t
y o u m e a n s ir ?
C H A I R P E R S O N : ( In d is ti n c t) .
A D V B A I T S E N G R A N G ATA : Ye s . Ye s . Ye s . I t i s th e o th e r w a y a r o u n d
C h a ir.
C H A I R P E R S O N : I a m s o r r y.
20

A D V B A I T S E N G R A N G ATA : Ye s .
C H A I R P E R S O N : O k a y. N o .
A D V B A I T S E N G R A N G ATA : Th a n k y o u f o r th a t .
C H A I R P E R S O N : O h . O k a y.
A D V B A I T S E N G R A N G ATA : Ye s . Ye s .
C H A I R P E R S O N : I - I t h o u g h t - I th o u g h t a ll a l o n g i t w a s …

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A D V B A I T S E N G R A N G ATA : I t i s t h e o t h e r w a y a r o u n d .
C H A I R P E R S O N : O k a y. S o - o h s o h e - s o th e r e p o r t th a t w a s m a d e to
you …
M R H L O N G WA N E : Ye s C h a ir.
CHAIRPERSON :

B y M r D u d u z a n e Z u m a w a s th a t M r J o n a s w a s g o i n g

a r o u n d s a y i n g t h a t y o u w e r e b l a c k m a i li n g h i m ?
A D V B A I T S E N G R A N G ATA : Ye s .
C H A I R P E R S O N : T h a t is - th a t is t h e r e p o r t ?
M R H L O N G WA N E : Ye s C h a ir.
10

CHAIRPERSON :

O k a y, b u t y o u w e r e n o t g iv e n d e t a i ls i n t e r m s o f t h e

s o u r c e o f - o f t h e r u m o u r s a n d i n te r m s o f w h a t y o u w e r e a ll e g e d to b e
b l a c k m a i li n g h i m a b o u t.

D i d - d i d M r D u d u z a n e Zu m a g iv e y o u t h o s e

d e t a i ls p r i o r t o y o u a s k i n g h i m t o c o n v e n e t h e m e e ti n g ?
M R H L O N G WA N E : N o C h a ir.
C H A I R P E R S O N : H e d i d n o t g iv e y o u ?
M R H L O N G WA N E :

He did not.

I t h o u g h t t h e m e e ti n g w o u l d - w o u ld

d e a l w it h a l l t h o s e t h in g s .
C H A I R P E R S O N : Ye s .
M R H L O N G WA N E : Ye s C h a ir.
20

CHAIRPERSON :

Ye s

and

when

the

m e e t in g

took

p la c e

M r D u d u z a n e Zu m a s a id n o t h i n g m o r e i n e s s e n c e a t th e m e e t i n g i n
t e r m s o f w h a t th is w a s a b o u t t h a n w h a t h e h a d a lr e a d y to ld y o u b e fo r e ?
I n o t h e r w o r d s h e d i d n o t s a y a n y t h i n g n e w in t e r m s o f t h i s b l a c k m a il i n g
r u m o u r o r d id h e ?
M R H L O N G WA N E : L o o k i n e s s e n c e t h a t i s w h a t h e s a i d . T h e r e m i g h t

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04 DECEMBER 2019 – DAY 196
b e - m i g h t h a v e b e e n o th e r d e t a ils a r o u n d t h e r u m o u r a n d w h a t h e …
C H A I R P E R S O N : Ye s .
M R H L O N G WA N E :

What he said and so on, but I do not have

r e c o l l e c ti o n , b u t …
C H A I R P E R S O N : Ye s .
M R H L O N G WA N E :

T h e m a i n t h r u s t o f i t w a s th a t I a m a l le g e d t o b e

b l a c k m a i li n g …
C H A I R P E R S O N : Ye s .
M R H L O N G WA N E : T h e g e n t le m a n .
10

CHAIRPERSON :

Ye s .

S o , b u t t h e p o i n t - th e p o in t th a t I a m - I a m

tr y i n g to e s ta b lis h is . A l th o u g h h e m ig h t h a v e m e n ti o n e d s o m e d e t a ils
t h a t h e m i g h t n o t h a v e p r e v i o u s ly m e n t i o n e d t o y o u . Th e y d i d n o t g o t o
the essence.

T h e e s s e n c e r e m a in e d t h e s a m e .

N a m e ly w h a t h e h a d

t o l d y o u b e f o r e . I s t h a t c o r r e c t?
M R H L O N G WA N E : T h a t is c o r r e c t C h a ir.
CHAIRPERSON :

Ye s a n d d i d M r J o n a s i n r e s p o n s e t o w h a t M r Z u m a

s a i d a s k M r Z u m a w h e r e h e g o t th is i n f o r m a ti o n fr o m t h a t h e w a s g o i n g
a r o u n d a l le g i n g t h a t y o u w e r e b l a c k m a il i n g h i m ?

Do you remember

whether he - he did or you do not remember?
20

M R H L O N G WA N E :

I d o n o t t h i n k t h e r e w a s s u c h a n e n g a g e m e n t.

W h a t I d o r e m e m b e r i s h i m s a y in g h e h a d n o r e c o ll e c t i o n o f e v e r s a y i n g
t h a t to a n y o n e .
C H A I R P E R S O N : Ye s a n d o n c e h e h a d s a id th a t w a s M r Z u m a a b l e to
t a k e th e d i s c u s s io n f u r th e r a s k i n g h i m a n y t h i n g f u r t h e r i n r e l a t io n t o
t h is r u m o u r o r t h a t w a s b a s ic a lly th e e n d o f th e d is c u s s i o n o f th a t

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04 DECEMBER 2019 – DAY 196
rumour?
M R H L O N G WA N E :

I d o n o t r e c a ll C h a ir.

M y - m y e n ti r e f o c u s w a s

m o r e o n t h e r e s p o n s e t h a t I w o u ld g e t a r o u n d - s u r r o u n d e d th a t i s s u e .
C H A I R P E R S O N : Ye s .
M R H L O N G WA N E : M y e n tir e fo c u s w a s t h a t …
C H A I R P E R S O N : Ye s .
M R H L O N G WA N E : B e c a u s e i t w a s a …
C H A I R P E R S O N : Ye s .
M R H L O N G WA N E : It w a s a b ig o n e f o r m e .
10

CHAIRPERSON :

S o a s f a r a s y o u a r e c o n c e r n e d . I t w o u l d b e f a i r to

s a y M r Z u m a in tr o d u c e d t h e s u b j e c t o f t h e m e e ti n g - t h e p u r p o s e o f t h e
m e e ti n g t h a t th is - i t w a s a b o u t t h i s r u m o u r a n d i n e s s e n c e h e - h e s a i d
n o t h i n g d i ff e r e n t fr o m w h a t h e h a d t o ld y o u p r e v io u s ly.

He may have

g iv e n s o m e m o r e d e t a i ls , b u t r e a lly i n t e r m s o f e s s e n c e i t w a s th e s a m e
t h i n g t h a t h e h a d t o ld y o u a n d M r J o n a s s a i d h e h a d n o r e c o ll e c t io n o f
e v e r h a v i n g s a i d a n y t h i n g a l o n g t h e l in e s t h a t y o u w e r e b la c k m a i li n g
h i m a n d t h e is s u e c o u l d n o t b e t a k e n f u r th e r a f t e r th a t . W o u l d t h a t b e a
f a ir s u m m a r y o f w h a t h a p p e n e d b e f o r e t h e t h r e e o f y o u m i g h t h a v e
s t a r t e d t a lk i n g a b o u t o t h e r t h in g s ?
20

M R H L O N G WA N E : T h a t is a f a ir s u m m a r y C h a ir.
C H A I R P E R S O N : It is a f a i r s u m m a r y.
M R H L O N G WA N E : Ye s C h a ir.
C H A I R P E R S O N : O k a y. D o y o u w a n t t o c o n ti n u e ?
A D V B A I T S E N G R A N G ATA :

Ye s C h a ir.

Th a n k - t h a n k y o u f o r th a t

C h a ir. M r H l o n g w a n e , i n - in th a t m e e ti n g w h e n y o u - w h e n y o u a s k e d -

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w h e n M r D u d u z a n e a s k e d d e ta ils o r - o r i n tr o d u c e d t h e i s s u e . H o w w a s
Mr Jonas’ reaction?

Wa s h e s u r p r is e d o r - o r h o w d id y o u r e a d h is

r e a c ti o n ?
M R H L O N G WA N E :

Well

I

am

no

expert,

but

it

was

a

tense

engagement.
A D V B A I T S E N G R A N G ATA : Wa s h e t e n s e ?
M R H L O N G WA N E : Ye s m a ’ a m .
A D V B A I T S E N G R A N G ATA : A n d d u r i n g t h e e n g a g e m e n t w e r e y o u a b l e
t o s a y a n y t h in g d u r i n g t h e m e e t i n g ?
10

D i d y o u - d i d y o u r a is e a n y t h in g

w i t h h i m p e r s o n a lly ?
M R H L O N G WA N E :

T h e is s u e t h a t w a s b e i n g r a is e d w a s o f s u c h a

s e r io u s n a t u r e th a t a n d t h e m a n n e r in w h ic h i t w a s r a is e d , b e c a u s e
h e r e is s o m e b o d y I c o n s i d e r a fr i e n d . T h e r e is a n is s u e o f th a t n a t u r e .
S o i t w a s i m p o r ta n t f o r m e to r e - e s t a b li s h t h a t th in g a n d h e s a i d h e h a d
n o r e c o ll e c ti o n .
A D V B A I T S E N G R A N G ATA : W e r e y o u s a ti s f ie d w i t h t h a t a n s w e r ?
M R H L O N G WA N E :

I n th is b u s i n e s s m a ’ a m n o I w a s h o p i n g a t s o m e

p o i n t s o m e t h i n g w o u l d e m e r g e a s I s t il l - s til l d o h o p e s o m e t h in g w il l
c o m e u p o n t h i s m a t t e r, b e c a u s e i t c o u l d n o t ju s t h a v e b e e n p l u c k e d
20

fr o m t h e a ir.
A D V B A I T S E N G R A N G ATA :

S o y o u w e r e n o t - y o u w e r e n o t s a t is f ie d

with the answer?
M R H L O N G WA N E : I a m n o t .
A D V B A I T S E N G R A N G ATA : D id y o u ta k e i t w i th h i m a f t e r th e m e e ti n g ?
M R H L O N G WA N E : W i t h w h o - h i m ?

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A D V B A I T S E N G R A N G ATA : W i t h J o n a s - M r J o n a s M c e b is i?
M R H L O N G WA N E : T h e s o u r c e w a s t h e o n e t h a t w a s th e r e m a ’ a m a n d
t h e r e w a s n o th i n g t o t a k e u p a f te r t h a t .
A D V B A I T S E N G R A N G ATA : I - I w a n t t o p ic k u p f r o m t h e f a c t t h a t y o u
- y o u a r e fr ie n d s . Yo u - y o u h a v e j u s t g i v e u s a b a c k g r o u n d t h a t y o u y o u a r e fr i e n d s a n d y o u h a v e b e e n fr ie n d s f o r - f o r s o m e ti m e .
M R H L O N G WA N E : H u h - u h .
A D V B A I T S E N G R A N G ATA :

S o I w o u l d i m a g i n e t h a t y o u - y o u w il l

s p e a k o c c a s i o n a ll y. D o y o u v is i t e a c h o t h e r ’s h o u s e ?
10

M R H L O N G WA N E : W e u s e d t o a l o t b e f o r e t h e i n c id e n t.
A D V B A I T S E N G R A N G ATA : Yo u u s e d to ?
C H A I R P E R S O N : M s R a n g a ta , a t s o m e s ta g e y o u w e r e v e r y a u d i b l e .
A D V B A I T S E N G R A N G ATA : S u r e .
CHAIRPERSON :

M a y b e y o u r a is e d y o u r v o i c e , b u t I t h in k a f te r I h a d

c o m m e n d e d y o u th e v o i c e w e n t d o w n .
A D V B A I T S E N G R A N G ATA :

Thank you.

Thanks.

S o r r y a b o u t th a t

C h a ir. S o r r y a b o u t t h a t C h a ir.
CHAIRPERSON : Hm.
A D V B A I T S E N G R A N G ATA : I w a n t t o - t o g o s li g h tl y b a c k .
20

C H A I R P E R S O N : Ye s . I f y o u k e e p i t a t th a t l e v e l .
A D V B A I T S E N G R A N G ATA :

Th a n k y o u .

I w a n t t o g o s l i g h t ly b a c k .

B e f o r e th e m e e ti n g o f 2 3 O c t o b e r 2 0 1 5 .

D i d y o u h a v e a n y m e e t in g

p r i o r to t h a t ?
c le a r.

I m m e d i a te ly p r i o r to th a t j u s t t o b e m o r e - e v e n m o r e

B e g in n i n g o f O c t o b e r.

A r o u n d b e g in n in g o f O c t o b e r w i t h

Mr Jonas.

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M R H L O N G WA N E :

C h a ir, w e h a d fr e q u e n t i n te r a c t io n .

i m m e d i a t e ly p r io r t o t h a t .
fr e q u e n t i n t e r a c t io n s .

So to say

I c a n n o t r e m e m b e r t o d a y, b u t w e h a d

W e w e r e fr i e n d s .

in t e r a c ti o n s o v e r a p e r i o d o f ti m e .

Comrades.

Frequent

It w o u l d b e tw ic e a d a y.

Three

ti m e s . F r e q u e n t i n te r a c t i o n s .
A D V B A I T S E N G R A N G ATA :

Right.

Mr J o n a s m a k e s r e f e r e n c e in h is

s t a te m e n t - I a m s u r e y o u h a v e r e a d h is s t a t e m e n t . To b e m o r e - m o r e
p a r t ic u l a r if y o u g o to L L 1 A . T h e - t h e o t h e r - t h a t is t h e o th e r s u b f il e
paragraph 4.
10

H e - h e m a k e s r e f e r e n c e t o a m e e t i n g t h a t to o k p la c e

b e t w e e n y o u r s e l f a n d h i m a n d - a n d in t h i s c a s e h e m e n ti o n e d
M r B o n g a n i M o r e . A r e y o u fa m i li a r w i t h t h a t n a m e ?
M R H L O N G WA N E : Ye s . I a m .
A D V B A I T S E N G R A N G ATA :

And - and what is your - what is your

r e l a ti o n s h i p w i t h h i m ?
M R H L O N G WA N E : Fr ie n d s /c o m r a d e s . H e is o n e o f t h e g e n tl e m e n t h a t
c a m e t o t h e h o u s e r e g u l a r ly w i th fr e q u e n t i n te r a c t io n s .
A D V B A I T S E N G R A N G ATA :

W o u ld y o u s a y t h a t y o u r fr ie n d s h i p w a s

m o r e - th e s a m e a s th a t o f J o n a s - Mr J o n a s ?
M R H L O N G WA N E : W e a r e c o m r a d e s . C o m r a d e s a r e t h e s a m e .
20

A D V B A I T S E N G R A N G ATA : O k a y. S o d o - d o y o u r e c a l l h a v i n g s u c h
k in d o f a m e e ti n g w h e r e h e w a s p r e s e n t ?
M R H L O N G WA N E :

L ik e I s a id m a ’ a m w e h a d f r e q u e n t i n t e r a c t io n s a s

c o m r a d e s . S o t h e r e is n o t h in g …
A D V B A I T S E N G R A N G ATA :
O c t o b e r.

I a m a s k i n g i n p a r tic u l a r b e g i n n i n g o f

Pr i o r t o 2 3 O c t o b e r d o y o u r e c a l l h a v in g a m e e t in g o f s u c h

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04 DECEMBER 2019 – DAY 196
n a t u r e w h e r e Mr J o n a s a n d - a n d M r M o r e w e r e - w e r e in t h a t m e e ti n g .
M R H L O N G WA N E : W e h a v e h a d fr e q u e n t m e e ti n g s w it h M r J o n a s a n d
M r M o r e m a ’a m .

S o t h e r e is n o p a r t ic u l a r m e e t in g li k e y o u s a y. I - I

r e m e m b e r a p a r ti c u l a r m e e t i n g .
CHAIRPERSON : Hm.
A D V B A I T S E N G R A N G ATA : A n d d o y o u r e c a l l h a v i n g a m e e ti n g w h e r e
y o u s p o k e a b o u t Mr D u d u z a n e Z u m a w a n ti n g t o s p e a k t o Mr J o n a s ?
M R H L O N G WA N E : M r D u d u z a n e Z u m a w a n ti n g t o s p e a k t o M r J o n a s i t
is a c o m m u n i c a t io n I h a d w i t h Mr D u d u z a n e Zu m a a n d Mr J o n a s a n d th e
10

c o m m u n ic a te d n u m b e r s .
A D V B A I T S E N G R A N G ATA : D o y o u r e c a l l th a t m e e ti n g w h e r e y o u h a d
a m e e t in g w i t h Mr J o n a s w h e r e Mr M o r e w a s p r e s e n t a n d y o u - y o u
spoke

to

Mr J o n a s

and

a d v is e d

him

that

Mr

-

I

mean

-

M r D u d u z a n e Zu m a w o u l d li k e t o s p e a k t o M r J o n a s .
M R H L O N G WA N E : N o m a ’a m .
A D V B A I T S E N G R A N G ATA : D o y o u r e c a ll th a t m e e t i n g ?
M R H L O N G WA N E : N o m a ’a m .
A D V B A I T S E N G R A N G ATA : Yo u d o n o t r e c a l l th a t m e e t i n g ?
M R H L O N G WA N E :
20

I

recall

th a t

c o n v e r s a t io n

between

me

and

Duduzane about the names for Mr Jonas and Jonas, me and him. Not
w i t h Mr M o r e . N o . I d o n o t r e m e m b e r t h a t .
A D V B A I T S E N G R A N G ATA :

D o y o u r e c a l l M r D u d u z a n e w a n t in g to

s p e a k t o M r J o n a s a b o u t i n v i t in g h i m t o s o m e a w a r d s ?
M R H L O N G WA N E : Ye s .
A D V B A I T S E N G R A N G ATA : W h e n w a s t h a t ?

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04 DECEMBER 2019 – DAY 196
M R H L O N G WA N E : I d o n o t r e m e m b e r. S o m e t i m e t h a t y e a r.
A D V B A I T S E N G R A N G ATA : S o m e ti m e ?
M R H L O N G WA N E : S o m e ti m e i n t h a t y e a r.
A D V B A I T S E N G R A N G ATA :

D u r in g t h e - j u s t b e f o r e t h e m e e ti n g o f

O c t o b e r, th e 2 3 r d ?
M R H L O N G WA N E : J u s t b e fo r e w h e n - n o . I d o n o t r e m e m b e r t h a t , b u t
I r e c a l l a d is c u s s i o n a b o u t t h a t a n d i t w a s b e tw e e n m e a n d D u d u z a n e
a n d m e a n d J o n a s a n d t h e y - th e y a s k e d f o r n u m b e r s a n d t h e y d u ly
e x c h a n g e d t h e n u m b e r s . S o th e r e w a s n o M r M o r e i n t h a t - i n …
10

CHAIRPERSON : Who - who exchanged numbers?
M R H L O N G WA N E :

Mr Jonas

and

Mr Zuma

needed

to

exchange

n u m b e r s . I w a s t h e m e d iu m . T h e r e w a s n o M r M o r e i n t h a t in t e r a c ti o n
of numbers.
C H A I R P E R S O N : O h . Wa s i t j u s t y o u r s e l f a n d M r J o n a s o n ly …
M R H L O N G WA N E : In t h a t c o m m u n ic a ti o n …
C H A I R P E R S O N : O n t h a t p a r ti c u la r m e e t in g ?
M R H L O N G WA N E :

In t h a t c o m m u n i c a t io n i t w a s te l e p h o n ic C h a ir.

It

w a s t e le p h o n ic . Ye s .
C H A I R P E R S O N : Ye s .
20

A D V B A I T S E N G R A N G ATA : S o if - i f y o u r e a d t h e s t a t e m e n t o f J o n a s
w h e r e h e m a k e s r e f e r e n c e t o a m e e ti n g t h a t y o u h a d i n O c t o b e r w h e r e
y o u h a d s p o k e n a b o u t t h e i m p o r t a n c e o f t h e G u p ta s .

What would be

y o u r c o m m e n t to t h a t ?
M R H L O N G WA N E :
comments.

My c o m m e n t w o u l d r e fe r b a c k t o m y e a r li e r

W e h a d f r e q u e n t i n t e r a c t io n s a t d i ffe r e n t p l a c e s w i t h

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04 DECEMBER 2019 – DAY 196
Mr Jonas.
t o p ic s .

W e a r e f r i e n d s a n d c o m r a d e s a n d w e c o v e r e d a v a r i e ty o f

S o t o p ic k o u t o n e a n d s a y s u c h a n d s u c h a t h i n g h a p p e n e d

w o u ld b e I t h in k a s k i n g to o m u c h , b u t I a m h a p p y t o a n s w e r a n y
q u e s t io n .
C H A I R P E R S O N : Fr o m w h a t y o u h a v e s a id I t h in k it i s s e e m s th a t p r io r
t o th is m e e t in g o f t h e 2 3 r d a s fa r a s y o u w e r e c o n c e r n e d y o u r
fr i e n d s h i p /c o mr a d e s h i p r e la t io n s h ip w i t h M r J o n a s w a s n o r m a l …
M R H L O N G WA N E : Ye s C h a ir.
CHAIRPERSON :
10

A n d y o u w e r e i n te r a c t in g w i t h h i m a s a n d w h e n t h e

n e e d a r o s e . T h e r e w a s n o p r o b le m s . Is th a t c o r r e c t?
M R H L O N G WA N E : T h a t is c o r r e c t C h a ir.
C H A I R P E R S O N : Ye s a n d w i th r e g a r d to M r B o n g a n i M o r e w a s th a t t h e
s a m e s i t u a t io n a s w e l l ? Yo u w e r e i n te r a c t in g w i t h h i m a s a n d w h e n t h e
n e e d a r is e s .

T h e r e w e r e s o m e i n te r a c t i o n s a m o n g th e th r e e o f y o u ,

y o u r s e l f , Mr J o n a s a n d h i m , b u t o t h e r s m a y b e n o t i n v o lv i n g a l l t h r e e o f
y o u n e c e s s a r il y p r i o r t o t h a t m e e ti n g .
M R H L O N G WA N E : T h a t - t h a t w o u ld b e c o r r e c t C h a ir.
C H A I R P E R S O N : T h a t w o u ld b e c o r r e c t . Ye s .
M R H L O N G WA N E : T h a t w o u ld b e c o r r e c t .
20

CHAIRPERSON : So one can accept that when you had the report that
M r D u d u z a n e Zu m a g a v e - g a v e t o y o u o r m a d e t o y o u a b o u t t h e
r u m o u r s . Yo u w o u l d n o t o r d i n a r i ly h a v e h a d a n y p r o b le m w it h s p e a k in g
t o M r J o n a s o r a n d e v e n r a is in g t h is a s y o u r fr i e n d t o s a y I - I h a v e
h e a r d s o m e th i n g t h a t I c a n n o t b e li e v e h e r e , b u t I h e a r t h a t fr o m
M r D u d u z a n e Zu m a t h a t t h e r e a r e r u m o u r s t h a t y o u a r e t h r o w i n g a r o u n d

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04 DECEMBER 2019 – DAY 196
s a y in g I a m b l a c k m a il i n g y o u .
T h a t is n o t s o m e t h i n g t h a t y o u w o u l d o r d i n a r i ly h a v e h a d a
p r o b le m w i th d o in g .

Is t h a t r ig h t , b u t y o u m i g h t h a v e c h o s e n f o r a

r e a s o n t h a t y o u g a v e n o t to r a is e i t d ir e c tl y w i t h h i m .
M R H L O N G WA N E : C h a ir, I t h in k y o u a r e r a is i n g a v a l id p o i n t .
CHAIRPERSON : Hm.
M R H L O N G WA N E :

I n t h e s p a c e t h a t w e a r e i n w h e n w e g e t s t u ff l ik e

t h a t y o u l o o k d e e p e r i n to w h a t c o u l d b e t h e m o t iv a ti o n .

It is n o t j u s t

lik e i n a n y o r d i n a r y r e la t io n s h ip . W h y w o u ld t h is b e c o m i n g u p ? T h e r e
10

is a n u m b e r o f p e r m u t a t i o n s . T h e n t h e b e s t o p t io n f o r m e w a s i n d e e d
as per agreement let us put Jonas here and you are here and you
a r ti c u la t e th e i s s u e .
S o th e f a c t o f o u r fr ie n d s h i p w i th i n t h a t I c o u l d i n v e s t i n . It
w o u ld h a v e b e e n a r e c u r r i n g d e c i m a l . W h o t o l d y o u t h a t ? S o I w a n t e d
t h a t m a t t e r t o h a v e b e e n c l o s e d a t t h a t p o i n t , b u t I c o u l d n o t b e in
D u d u z a n e Z u m a ’s m in d to b e o r f o r c e h i m to te ll m e , b u t h e m a y w e ll
h a v e s o u r c e s t h a t h e m a y n o t h a v e w i t h to d is c l o s e a t t h a t p o i n t.
CHAIRPERSON :

I g u e s s th e - th e a n s w e r is y o u d id n o t h a v e a n y

p r o b le m a n d y o u w o u l d n o t h a v e a n y p r o b l e m r a is i n g a n y is s u e w i t h
20

M r J o n a s a t th e ti m e i f y o u w a n t e d to , b u t f o r th is p a r t ic u l a r o n e . Yo u
t h o u g h t i t w a s b e s t n o t t o r a is e i t d ir e c tl y w i th h i m , b u t r a th e r t o s a y
M r Zu m a p l e a s e c o n v e n e a m e e ti n g w h e r e a l l th r e e o f u s w il l b e
p r e s e n t . I s t h a t c o r r e c t?
M R H L O N G WA N E : S ir …
C H A I R P E R S O N : Ye s .

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04 DECEMBER 2019 – DAY 196
M R H L O N G WA N E : C h a i r t h a t w i ll b e a f a ir r e fl e c ti o n o f m y …
C H A I R P E R S O N : Ye s .
M R H L O N G WA N E : O f my s t a t e o f m in d .
C H A I R P E R S O N : O k a y. C h a ir I a m lo o k i n g a t t h e ti m e a n d I s e e i t is 1
o ’ c l o c k . C a n I ta k e d ir e c t io n fr o m y o u ?
CHAIRPERSON :

I - s u b j e c t t o e v e r y b o d y b e i n g f in e w i t h i t .

I am

in c li n e d t o s a y l e t u s t r y a n d s e e i f w e c a n fi n i s h w it h h is e v id e n c e …
A D V B A I T S E N G R A N G ATA : O k a y.
CHAIRPERSON : Because I do not think we should take much longer …
10

A D V B A I T S E N G R A N G ATA : Th a n k y o u C h a ir.
CHAIRPERSON : After this.
M R H L O N G WA N E : W e w il l h a v e n o p r o b l e m C h a ir.
C H A I R P E R S O N : Yo u w il l b e fi n e w i t h t h a t . Ye s . I s th a t fi n e w i th y o u
M r H lo n g w a n e ?
M R H L O N G WA N E : A b s o l u te ly fi n e C h a ir.
C H A I R P E R S O N : Ye s .
A D V B A I T S E N G R A N G ATA :
M R H L O N G WA N E : A b s o l u te ly.
CHAIRPERSON :

20

Let - let us continue.

I th i n k w e s h o u l d b e a b le t o

fi n i s h b e f o r e h a l f p a s t a n d - a n d th e n w e - w e c a n b e d o n e . T h e n w e
c a n t a k e th e l u n c h b r e a k a n d a ft e r lu n c h h a v e t h e n e x t w i t n e s s .
A D V B A I T S E N G R A N G ATA : Th a n k - t h a n k y o u C h a ir.
C H A I R P E R S O N : Ye s .
A D V B A I T S E N G R A N G ATA :

I

am

-

I

am

in d e b t e d

to

you.

M r H lo n g w a n e I m e a n t t o t a k e y o u t o L L 1 A a n d I w a n t t o ta k e y o u t o i n

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04 DECEMBER 2019 – DAY 196
p a r t ic u l a r p a g e 7 . I t is a s t a t e m e n t b y Mr J o n a s . I t w i ll h e lp i f y o u g o
t h e r e , b e c a u s e y o u m i g h t w a n t to r e f r e s h y o u r m e m o r y.

I know you

m i g h t h a v e r e a d - r e a d t h e s ta t e m e n t .
M R H L O N G WA N E : Ye s m a ’ a m .
A D V B A I T S E N G R A N G ATA : S o - s o m a y b e y o u m i g h t n e e d t o - a s w e a s w e a r e t a lk i n g y o u m i g h t n e e d to .
M R H L O N G WA N E : ( In t e r v e n e s ) .
CHAIRPERSON : Well if you tell her - tell him what it says …
A D V B A I T S E N G R A N G ATA : Ye s . Ye s . Ye s .
10

C H A I R P E R S O N : H e m i g h t n o t n e e d to - t o l o o k i t u p . J a .
A D V B A I T S E N G R A N G ATA : O k a y. Th a t i s fi n e .
M R H L O N G WA N E : T h a n k y o u C h a ir.
A D V B A I T S E N G R A N G ATA : Th e r e - th e r e …
M R H L O N G WA N E : I a m i n d e b te d .
A D V B A I T S E N G R A N G ATA :

I a m m a k in g p a r ti c u l a r r e f e r e n c e t o

p a r a g r a p h s 1 7 a n d 1 8 o f M r J o n a s ’ s t a t e m e n t . T h i s is h i s v e r s i o n a n d
t h is is h is e v id e n c e w h a t h e h a s t o l d th is C o m m is s i o n o r t h e C h a ir.
M R H L O N G WA N E : H u h - u h .
A D V B A I T S E N G R A N G ATA :
20

H e s a y s th a t o n t h e d a te , o n t h e 2 3 r d o f

O c t o b e r 2 0 1 5 w h e n y o u w e r e a t th e G u p t a r e s id e n c e i t ’s c o m m o n c a u s e
w h e n y o u s t a r t e d w i t h y o u r m e e ti n g , w h e n y o u s a t a n d y o u s ta r t e d
t a lk in g , s o m e b o d y w a lk e d in t o t h e r o o m , o k a y, h e s a i d t h a t p e r s o n
w a lk e d i n a n d h e s t a r t e d t a l k i n g . Wa lk e d in t o t h e r o o m , s t a r te d ta lk in g
w h il e y o u – t h e t h r e e o f y o u w e r e s it t in g i n th a t s p a c e . H e g o e s o n , o n
paragraph 19 and 20, he says,

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04 DECEMBER 2019 – DAY 196
“ T h i s p e r s o n w h o w a lk e d i n s a y s , h e s t a r te d b y s a y i n g , w e
k n o w y o u a n d w e k n o w t h a t H l o n g w a n e is b l a c k m a i li n g y o u ” ,
r e fe r r i n g to J o n a s , s p e a k in g t o M r J o n a s a n d t h a t th e y h a d in t e l li g e n c e
on him.
D o y o u r e c a l l s u c h c o n v e r s a t io n ta k i n g p l a c e o r e v e n t o s t a r t ,
d o y o u r e c a l l s o m e b o d y w a l k i n g i n t o y o u r m e e t i n g a n d u t te r i n g s u c h
s t a te m e n ts ?
M R H L O N G WA N E :

C h a ir a t a m e e ti n g i n w h ic h I w a s p r e s e n t, n o s u c h

happened.
10

A D V B A I T S E N G R A N G ATA :
M R H L O N G WA N E :

It did not happen?

A t t h e m e e t in g a t w h ic h I w a s p r e s e n t .

A D V B A I T S E N G R A N G ATA :

Yo u m a d e r e fe r e n c e e a r l ie r o n t h a t

s o m e b o d y w a lk e d in t o t h e r o o m , in t o t h e m e e ti n g o r p e o p l e w e r e
w a lk in g i n a n d o u t w a s th e r e a n y o t h e r p a r ti c u l a r p e r s o n w h o w a l k e d i n
a n d s p o k e , y o u m i g h t h a v e h e a r d w h a t t h a t p e r s o n s a id , i s t h e r e a n y
p a r t ic u l a r p e r s o n t h a t w a lk e d i n t h a t s p a c e w h il e y o u w e r e t a l k i n g ?
M R H L O N G WA N E :

M a ’ a m a s I r e c a ll t h e r e w e r e t h e r e o f u s i n t h e

r o o m I w a s f a c i n g Mr D u d u z a n e Z u m a , m y b a c k t o th e d o o r, M r J o n a s t o
t h e r ig h t , i f I r e m e m b e r w e l l .
20

So there would ha ve been a number of

w h a t y o u ’ d c a ll in t e r r u p ti o n s , d o o r s o p e n i n g a n d c l o s in g .
A D V B A I T S E N G R A N G ATA :
M R H L O N G WA N E :

Ye s .

Wa s th e q u e s ti o n , d i d a n y o n e s p e a k t o Mr

Duduzane?
A D V B A I T S E N G R A N G ATA :
M R H L O N G WA N E :

Ye s .

In d e e d a s f a r a s I c a n r e m e m b e r s o m e b o d y d i d

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04 DECEMBER 2019 – DAY 196
p e e p in b r i e f ly b u t t h e r e w e r e a n u m b e r o f d o o r s o p e n i n g a n u m b e r o f
ti m e s , w h a t t h e y s p o k e a b o u t I d o n o t k n o w b u t I d id t h i n k i t w a s a
m e m b e r o f t h e G u p t a f a m il y t h a t w a s m y i m p r e s s i o n .
A D V B A I T S E N G R A N G ATA :

Yo u ’v e s a i d t h a t t o t h e P u b l ic P r o t e c t o r

d u r i n g y o u r i n t e r v ie w, m a y b e ju s t t o t a p f r o m t h a t w e ’v e g o n e t h r o u g h
t h e tr a n s c r i p t o f th e i n t e r v ie w w h ic h w e h a v e p r o v id e d y o u r l a w y e r s
w i t h . T h e i n t e r v ie w r e c o r d e d b e i n g a s k e d p a r t ic u l a r if y o u a r e a w a r e o f
t h e p e r s o n t h a t w a l k e d i n t o t h a t m e e t i n g , d o y o u r e c a l l s u c h q u e s ti o n
b e i n g p o s e d t o y o u b y th e P u b l ic Pr o t e c t o r ?
10

M R H L O N G WA N E :

Ye s I d o .

A D V B A I T S E N G R A N G ATA :

A n d d o y o u r e c a ll w h a t th e r e s p o n s e

was?
M R H L O N G WA N E :

Ye s I d o , b r o a d ly i t w a s s o m e b o d y d id p e e p i n

b r i e fl y a n d I t h o u g h t it w a s a m e m b e r o f th e G u p t a f a m il y.
A D V B A I T S E N G R A N G ATA :

O f i n t e r e s t , y o u m i g h t n o t b e a b le t o

c o m m e n t t o t h a t b e c a u s e i t ’s n o t y o u , M r D u d u z a n e Zu m a , w h e n h e w a s
g iv i n g e v i d e n c e , h e s a i d i t w a s M r R a j e s h , w h a t w o u ld b e y o u r c o m m e n t
t o t h a t? H e s a y s M r R a j e s h , d u r i n g t h e m e e t in g p e e p e d in a n d c a m e t o
a p p r o a c h h i m a n d s p o k e t o h i m a b o u t a r r a n g in g f o r a m e e t in g f o r t h e
20

f o ll o w i n g d a y, d i d y o u s e e th a t h a p p e n i n g ?
M R H L O N G WA N E :

M y c o m m e n t t o t h a t C h a ir, w o u l d b e Mr D u d u z a n e

Z u m a k n o w s h is b u s i n e s s p a r t n e r s a n d t h e s e p e o p le v e r y w e l l o v e r a
lo n g p e r i o d o f ti m e , I’ d o n ly m e t o n l y o n e o f t h e b r o t h e r s b u t o n ly b u t
o n c e , s o o b je c tiv e ly s p e a k i n g I’ d h a v e t o d e fe r t o th e v e r s io n o f M r
Z u m a i n t e r m s o f id e n ti fi c a t io n I w o u ld n o t f i g h t a s e c o n d w o r l d w a r

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04 DECEMBER 2019 – DAY 196
a b o u t th e id e n t i f i c a t io n i s s u e , I ’l l h a v e t o d e f e r t o Mr Z u m a b e c a u s e i f I
a ls o r e m e m b e r w e ll s o m e t i m e a g o I t h i n k t h e r e m u s t h a v e b e e n
another

a ff id a v i t

deposed

to

by

the

same

person

where

t h e y,

t h e m s e l v e s i n d ic a t e t h a t th e y p e e p e d i n . S o in t h e fa c e o f s u c h I c a n
o n ly b u t a c c e p t d iv e r s io n .
A D V B A I T S E N G R A N G ATA :

Thank you, which member of the Gupta

f a m ily a r e y o u f a m il ia r w i t h ?
M R H L O N G WA N E :

Then or now?

A D V B A I T S E N G R A N G ATA :
10

M R H L O N G WA N E :

Th e n .

F a m il ia r i ty, s o m e b o d y I’ v e s p o k e n t o , s o m e b o d y

I’ v e m e t I h a d o n l y h a d l u n c h w i th o n e m e m b e r o f th e G u p t a f a m ily
o r g a n i s e d b y Mr D u d u z a n e Z u m a a t s o m e p l a c e i n t h e N o r t h e r n
Suburbs yes.
A D V B A I T S E N G R A N G ATA :
M R H L O N G WA N E :

Ye s a n d d o y o u r e c a ll w h o th a t w a s ?

To n y.

A D V B A I T S E N G R A N G ATA :
M R H L O N G WA N E :

Th a t is R a j e s h ?

I t h i n k – o t h e r w is e r e f e r r e d t o a s R a j e s h .

A D V B A I T S E N G R A N G ATA :
in t e r c h a n g e a b ly y e s .
20

Ye s , y e s I t h in k t h e y u s e th e n a m e s

S o y o u a r e f a m i li a r w i th R a j e s h G u p t a , To n y

Gupta?
M R H L O N G WA N E :

A t th a t t i m e , i t w a s a p e r s o n I k n e w, fa m i li a r, n o

b e c a u s e I’ d o n ly m e t th e p e r s o n b u t o n c e .
A D V B A I T S E N G R A N G ATA :

Would you recall if that would have been

t h e s a m e p e r s o n t h a t w a lk e d i n to t h e r o o m ?
M R H L O N G WA N E :

Would I recall that it would have been the same

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04 DECEMBER 2019 – DAY 196
p e r s o n t h a t w a lk e d i n to t h e r o o m ?
A D V B A I T S E N G R A N G ATA :
M R H L O N G WA N E :

Ye s .

G iv e n t h a t m y b a c k w a s t o t h e d o o r a n d m y f o c u s

w a s o n t h e d is c u s s io n I w o u l d n o t la y m y h e a d o n th e li n e , b u t lik e I
s a i d I w i ll h a v e t o d e f e r to t h e v e r s i o n o f M r D u d u z a n e Z u m a w h o k n e w
t h e p e o p l e b e t t e r a n d v e r y w e ll , I d i d n o t a t th e ti m e .
A D V B A I T S E N G R A N G ATA :

Th a n k s y o u – d u r i n g t h e i n t e r v i e w w it h

t h e P u b li c Pr o t e c t o r y o u w e r e a s k e d s p e c i f ic a ll y i f i t w a s M r R a j e s h a n d
y o u m a d e a c l e a r – y o u r a n s w e r w a s v e r y c l e a r to s a y i t w a s n o t M r
10

R a j e s h , s o w h a t w i ll b e y o u r c o m m e n t n o w t h a t M r D u d u z a n e s a i d t h a t
it w a s h i m , w i ll y o u s ti ll s a y t h a t y o u m ig h t … [ i n t e r v e n e s ] .
M R H L O N G WA N E :

I th i n k I m a y h a v e a n s w e r e d th a t q u e s ti o n C h a ir

b u t I’l l r e p e a t i t f o r t h e s a k e o f c la r i ty.

M y in t e r v i e w s w i t h t h e P u b l ic

P r o t e c t o r, I r e p e a t t h a t w h ic h I s a i d i s th a t w h ic h I s a id i n d e e d a n d I a m
s a y in g in v i e w o f w h a t M r Z u m a a n d t h e g e n t le m a n in q u e s ti o n h a v e
t e s ti fi e d t o u n d e r o a t h , I ’l l h a v e t o d e f e r to th e ir v e r s i o n t h e y k n o w
e a c h o t h e r b e tt e r, th a t th e ir i d e n ti f ic a ti o n h a d b e e n c o r r e c t o n m y p a r t
it c e r t a i n ly w o u l d th e n m e a n i t w a s a m i s i d e n t i fic a ti o n .
A D V B A I T S E N G R A N G ATA :
20

CHAIRPERSON :

Ye s .

Yo u s a i d t h e m e e t i n g – y o u e s ti m a t e t h a t th e m e e t in g

m a y h a v e t a k e n a b o u t 3 0 m i n u te s is t h a t r i g h t ?
M R H L O N G WA N E :
CHAIRPERSON :
M R H L O N G WA N E :
CHAIRPERSON :

J a a b o u t th a t .
Yo u w e r e e s ti m a t in g ?
Ye s .
Ye s , a n d a t th e e n d o f th e m e e t i n g d i d y o u a n d M r

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04 DECEMBER 2019 – DAY 196
D u d u z a n e Z u m a r e m a i n a t th e v e n u e w h i l e M r J o n a s le f t , d o y o u r e c a l l
if t h a t is w h a t h a p p e n e d ?
M R H L O N G WA N E : A s f a r a s I r e c a l l C h a i r w e a ll w e n t d o w n t h e s ta ir s
o u r c a r s w e r e p a r k e d th e r e , I t h i n k Mr J o n a s w e n t i n a d i ff e r e n t c a r
fr o m t h e o n e h e c a m e i n a n d w e p a r t e d .

Whether Mr Duduzane

r e m a in e d o r n o t I d o n o t r e c a ll .
CHAIRPERSON :

Ye s , y e s o k a y w e ll y o u h a v e , I’ m s u r e r e a d Mr J o n a s ’

s t a te m e n t t h a t g i v e s h i s v e r s i o n a n d m a y b e y o u h a v e e v e n r e a d th e
tr a n s c r ip t o f h is e v i d e n c e is th a t c o r r e c t ?
10

M R H L O N G WA N E :
CHAIRPERSON :

T h a t ’s c o r r e c t s ir.
S o y o u k n o w w h a t h e h a s t o l d th e C o m m i s s io n ?

M R H L O N G WA N E :

Br o a d ly.

CHAIRPERSON :

B r o a d l y, y e s , y e s a n d y o u k n o w w h a t h e s a y s

h a p p e n e d a t t h e m e e ti n g w h ic h i s d i ff e r e n t fr o m w h a t y o u s a y h a p p e n e d
in te r ms o f h i m h a v in g b e e n o ff e r e d b y a m e m b e r o f th e G u p t a f a m il y
t h e p o s i t io n o f M i n i s t e r o f Fi n a n c e a n d … [ i n t e r v e n e s ] .
M R H L O N G WA N E :

T h e R 6 0 0 m il li o n s to r y C h a ir.

CHAIRPERSON:

A n d b e i n g o ff e r e d a l o t o f m o n e y a n d t h a t t h e

m e m b e r o f t h e G u p t a f a m il y t o l d h i m , i f I r e c a ll c o r r e c t ly th a t Mr
20

N h l a n h l a N e n e w a s M i n is t e r o f Fi n a n c e a t t h e ti m e w a s e i th e r g o i n g t o
b e d is m is s e d o r w a s n o t g o in g t o b e M i n is t e r o f F i n a n c e i n d u e c o u r s e
o r s o m e th i n g t o t h a t e ff e c t d o y o u r e m e m b e r th a t p a r t o f h i s e v i d e n c e ?
M R H L O N G WA N E :

Ye s C h a ir, if I m a y c o m m e n t , a r e y o u in v i t in g m e t o

c o m m e n t C h a ir ?
CHAIRPERSON :

N o , n o , I j u s t w a n t to k n o w w h e t h e r t h a t ’s y o u r – y o u

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04 DECEMBER 2019 – DAY 196
r e m e m b e r t h o s e f e a t u r e s o f M r J o n a s ’ e v id e n c e o r n o t .
M R H L O N G WA N E :

Ye s C h a ir … [ i n t e r v e n e s ] .

CHAIRPERSON :

I j u s t w a n t to m a k e s u r e th a t w e d o n ’ t h a v e to a s k

y o u t h in g s t h a t y o u r e m e m b e r a b o u t w h a t M r J o n a s s a id .
M R H L O N G WA N E :

Ye s C h a ir, a s – i f I m a y C h a ir I w a s n o t in b u s in e s s

w i t h t h e G u p t a ’s a t t h a t ti m e .
CHAIRPERSON :

Ye s .

M R H L O N G WA N E :
CHAIRPERSON :
10

A t a n y p o in t e v e r.
Ye s .

M R H L O N G WA N E :

T h e y w e r e n o t p a r ti c u la r ly f a mi li a r t o m e , m y p o i n t

of contact was Duduzane.
CHAIRPERSON :

Ye s .

M R H L O N G WA N E :

I h o l d n o b r i e f f o r t h e G u p t a ’s o r a n y b o d y e ls e fo r

t h a t m a t t e r a n d w h e n I s a id , i f w h a t e v e r o ff e r s w e r e m a d e a t t h e
m e e ti n g in w h ic h I w a s p r e s e n t , n o s u c h o ff e r w a s m a d e . M a y b e if o n e
c a n e x tr a p o l a t e o n e w o u l d h a v e t o b e in b u s i n e s s w i th t h e m f o r t h e m t o
m a k e w h a t e v e r o ff e r s o f t h a t n a t u r e i n m y p r e s e n c e .

I was not in

b u s i n e s s th e n I ’ m n o t i n b u s in e s s n o w, w e n e v e r w e r e in b u s i n e s s ,
a c t u a ll y C h a ir i f I m a y s a y, I’ m p e r ip h e r a l t o t h is m a t te r.
20

CHAIRPERSON :

Ja.

M R H L O N G WA N E :

R e a lly p e r i p h e r a l I h a p p e n e d t o – th e r e w a s a

p a r t ic u l a r i s s u e t h a t th e y o u n g m a n h a d c o n v e r s e d w i t h m e , I n e e d e d i t
r e s o l v e d a n d i t s o h a p p e n e d t h a t t h e m e e ti n g t o o k p la c e a t t h e p l a c e
w h ic h h a p p e n s to b e c o n t r o v e r s i a l f o r w h a te v e r r e a s o n s b u t m y is s u e
r e a l ly h e r e w a s t h a t p a r tic u la r p o i n t a n d a s I i n d ic a te d n o w th a t w e ’r e

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04 DECEMBER 2019 – DAY 196
q u o ti n g P P ’s th in g s I’ v e h a d a r e l a t i o n s h ip w i th J o n a s w e m e t a t my
p l a c e , m a n y o t h e r t i m e s . S o I h a v e n o a s s o c i a ti o n n o r – a n d t h a t ’s w h y
I lo o k d i m ly u p o n a n y a t te m p t t o tr y a n d t h r o w m e i n t o w h a t e v e r
n a r r a t iv e o f S t a te C a p t u r e , t h a n k y o u C h a ir.
CHAIRPERSON :

Ye s , n o , n o , n o th e i d e a w a s j u s t t o m a k e s u r e t h a t

y o u r e c a ll a t l e a s t c e r t a i n fe a tu r e s o f M r J o n a s ’ e v i d e n c e .

Yo u m i g h t

d is a g r e e a n d s a y, a t th e m e e ti n g t h a t y o u h a d w i t h h i m a n d M r Z u m a ,
n o s u c h t h i n g s h a p p e n e d b u t y o u u n d e r s t a n d t h a t , t h a t i s h is e v i d e n c e .
M R H L O N G WA N E :
10

CHAIRPERSON :
M R H L O N G WA N E :
CHAIRPERSON :

T h a t ’s c o r r e c t C h a ir.
Yo u u n d e r s ta n d th a t j a .
I do.
N o w h e s a y s – h e s a i d i n h is e v i d e n c e , a n d I th i n k i n

h is s t a te m e n t t h a t a f te r h e h a d l e f t th e m e e ti n g w h ic h , if I r e c a ll w a s i n
t h e a f t e r n o o n I th in k m a y b e a f te r t w o I’ m n o t s u r e , h e c a ll e d M in is t e r
P r a v i n G o r d h a n b e c a u s e h e f e l t h e w a n te d t o t a lk t o s o m e o f t h e p e o p l e
t h a t w e r e c l o s e t o h i m o r th a t h e h a d c o n fi d e n c e in t o t e l l t h e m w h a t
h a d h a p p e n e d t o h i m b e c a u s e i t w a s s o m e th in g t h a t h e , I th in k f o u n d
u n a c c e p t a b l e , w a s u n e x p e c t e d th a t h e s h o u l d b e t o l d t h e i n f o r m a t i o n
t h a t h e w a s to l d a t t h is m e e ti n g b y t h e G u p t a f a m il y m e m b e r t h a t h e
20

t a lk e d a b o u t .
H e s a y s h e c a ll e d M r Pr a v in G o r d h a n a n d s a i d h e w o u l d l ik e t o
s e e h i m a n d t h e y a r r a n g e d th a t t h e y w o u l d m e e t o n S u n d a y, t h e 2 3 r d o f
O c t o b e r w a s a Fr i d a y a s I u n d e r s t a n d t h e p o s i t io n .

T h e y a g r e e d to

m e e t o n S u n d a y, h e a ls o c a ll e d M i n is t e r N e n e w h o h e s a y s w a s o n h is
w a y t o K Z N a t t h e t i m e fo r t h e w e e k e n d a n d t h e y a r r a n g e d t o m e e t o n

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04 DECEMBER 2019 – DAY 196
S u n d a y a n d i n d e e d h e s a y s o n S u n d a y h e m e t w i th th e m s e p a r a t e l y
M i n is t e r Pr a v in G o r d h a n – n o , n o h e m e t o n ly M in is t e r P r a v i n G o r d h a n
o n S u n d a y a t h i s o ff ic ia l r e s id e n c e i n P r e to r i a w i t h r e g a r d t o M in is t e r
N e n e th e y a r r a n g e d o n S u n d a y th a t th e y w o u l d m e e t o n M o n d a y a n d M r
P r a v i n G o r d h a n h a s g i v e n e v i d e n c e t h a t in d e e d t h e y m e t a n d h e t o ld
h i m s o m e t h in g , I t h i n k to t h e e ffe c t t h a t h e h a d b e e n m a d e a n o ffe r o r
s o m e t h i n g il le g a l h a d b e e n o ff e r e d t o h i m b y th e G u p t a ’s a n d h e h a d a
m e e ti n g o n M o n d a y m o r n i n g w i t h M i n is te r N h la n h l a N e n e a n d h e t o ld
him what had happened.
B o t h th e s e m i n i s te r s h a v e c o n f ir m e d i n e v i d e n c e b e f o r e th e

10

C o m m i s s i o n t h a t h e to l d t h e m th a t a t th a t m e e ti n g h e w a s m a d e t h e
o ffe r t h a t h e h a s to l d t h e C o m m i s s i o n a b o u t b u t h e a ls o s a y s w h e n h e
a r r iv e d i n P o r t E liz a b e t h , b e c a u s e h e w a s c a t c h in g a fl i g h t I th in k , to
t h e E a s te r n C a p e , h e s a y s h e c a l le d y o u a n d y o u m ig h t h a v e c a ll e d
e a c h o t h e r d u r in g t h a t e v e n i n g b u t h e s a y s o n e o f t h e t h i n g s h e s a i d t o
y o u , I g u e s s i n o n e o f t h e c a l ls w a s h e s a y s , h e e x p r e s s e d h is d i s g u s t
a t w h a t y o u h a d d o n e a s f a r a s h e w a s c o n c e r n e d th a t y o u s h o u l d n ’ t
h a v e d o n e t h is t o h i m a n d y o u s h o u l d n ’ t d o it t o a n y b o d y a n d a s I
u n d e r s t a n d h is e v id e n c e h e w a s ta lk in g a b o u t, h e s a w y o u a s h a v i n g
20

p l a y e d a r o l e i n h i m b e i n g t a k e n t o th e G u p t a r e s i d e n c e m a y b e , a n d I
s a y m a y b e b e c a u s e I d o n ’ t w a n t t o p u t w o r d s i n t o h is m o u t h , m a y b e
m o r e th a n t h a t , I d o n ’ t k n o w b u t h e d i d s a y b o t h y o u a n d Mr D u d u z a n e
Z u m a , d u r i n g t h e m e e t in g o n h is v e r s i o n w e r e q u i e t d i d n ’ t s a y m u c h
r e a l ly.
T h e p e r s o n w h o w a s t a l k i n g w a s th e G u p t a fa m i ly m e m b e r. S o

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04 DECEMBER 2019 – DAY 196
I’ v e l o o k e d a t y o u r a ff id a v i t a n d y o u d i d n ’ t s a y a n y t h i n g a b o u t a n y c a lls
t h a t h e m a y h a v e m a d e t o y o u th a t e v e n i n g s o I d o n ’ t k n o w w h e th e r y o u
a r e a b l e t o s a y a n y t h in g , w h e t h e r y o u r e m e m b e r th a t th e t w o o f y o u d id
s p e a k i n t h e e v e n in g a n d w h e th e r h e d i d s a y a n y t h i n g a l o n g t h e l i n e s
that he says he said?
M R H L O N G WA N E :

C h a ir, i f I m a y ju s t t a k e u s b a c k f o r a c o u p l e o f

s e c o n d s , t h i s [ i n d is ti n c t ] a s I i n d ic a te d i n s o m e o f m y a ff i d a v i ts , w e
h a v e c o m e u p f r o m t h e E a s t e r n C a p e l o n g b e fo r e h e b e c a m e a M i n i s t e r
w e tr i e d t o p u t – w e p u t to g e th e r te a m s w e w e r e p u r s u i n g o p p o r tu n it i e s
10

t o g e th e r s o p u r s u i n g o p p o r t u n i ti e s n e c e s s i ta t e s w h a t e v e r i t s a y s
b e c a u s e h e h a d n o c e r t a i n ty t h a t h e w a s g o i n g t o g o b a c k to
G o v e r n m e n t , w e h a d m a n y s u c h fr e q u e n t i n te r a c t io n s s o t h a t ’s n u m b e r
o n e , a b o u t t a k in g a n y b o d y a n y w h e r e .
N u m b e r t w o , a c o m m u n ic a ti o n t h a t I r e m e m b e r w i th J o n a s i s
t h a t I tr u s t t o o e a s i ly, I t h i n k s u b s e q u e n t t o t h a t m e e t i n g , I tr u s t p e o p l e
t o o e a s i ly a n d i n m y m in d th a t w a s r e f e r e n c e to t h e fa c t t h a t s o m e b o d y
h a d in d ic a t e d th a t h e w a s m a k i n g th e s e s e r io u s a ll e g a ti o n s a g a i n s t m e .
S o C h a ir, a g a i n b y w a y o f c o n t e x t w h e n I s a i d fr e q u e n t e n g a g e m e n ts ,
e v e n in m y e v i d e n c e to t h e P u b l ic P r o t e c t o r I a c t u a l ly i n d ic a te d th a t

20

t h e y c a n u s e t h is n e w t e c h n o lo g y to c h e c k w h e th e r w h a t I’ m s a y i n g
m a k e s s e n s e o r n o t , t h a t w e w e r e f r e q u e n tly a t my h o u s e , m y f a m ily ’s
f a m ily k n o w s e a c h o t h e r o u r t e a ms w o r k t o g e t h e r.
A s m a l l d e ta il , e v e n o n th e d a y h e w a s c a l l e d to b e a p p o in t e d
a s th e D e p u t y M i n is te r, C h a ir, h e le f t fr o m m y h o u s e . S o th is p a r t ic u l a r
r e l a ti o n s h i p t h a t e x i s t e d in a p a r t ic u l a r c o n t e x t a n d I w il l n o t c a s t

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a s p e r s i o n s o n h i m o r a n y b o d y e l s e f o r t h a t m a t te r I h o ld n o b r i e f f o r
G u p t a ’s o r a n y o t h e r p e r s o n b u t t h a t’s t h e r e la t io n s h i p a s i t w a s t h e n .
W h a t t h e n h a p p e n e d i n t h e i n te r v e n in g p e r i o d , I d o n o t k n o w b u t I
v o l u n te e r e d t o g o to th e P u b lic Pr o t e c t o r, I w a s s u b p o e n a e d h e r e b u t
I’ m h e r e a n d I th e r e fo r e s a y th a t w h ic h I r e m e m b e r b e i n g s a i d w a s , y o u
tr u s t p e o p le t o o e a s i ly a n d y e s C h a ir I ’ m a w a r e o f th e v e r s io n th a t h e
g a v e . I w o u l d n o t s a y to y o u w h a t is e x c l u d e d w h a t ’s n o t i n c l u d e d b u t
a t th e m e e ti n g w h ic h I a t t e n d e d C h a ir w it h D u d u z a n e Z u m a a n d th e
g e n tl e m a n n o s u c h th i n g s – o ffe r s w e r e m a d e .
10

I’ v e h a d a l l o t h e r m a n n e r o f t h i n g s i n h is s t a te m e n ts t h a t I’ m
n o t f a m il i a r w i t h .

I t ’s u n f o r tu n a t e t h a t w h a te v e r i t is t h a t w a s

[i n d is t in c t] t o g o t h is d ir e c t io n b u t n o t s u c h t h in g s , i t c o u ld h a v e b e e n
h a n d l e d b e t te r, th a n k y o u C h a ir.
CHAIRPERSON :

I u n d e r s t a n d th a t I t h i n k fr o m w h a t y o u s a y y o u m a y

b e f e e li n g c o n s t r a i n e d to g o b e y o n d a c e r ta i n p o i n t b e c a u s e o f th e
r e l a ti o n s h i p a n d fr i e n d s h i p t h a t y o u h a v e h a d f o r a l o n g ti m e w i th h i m .
I j u s t w a n t t o m a k e t w o p o i n ts a n d y o u c a n c o m m e n t o n t h e m .
W h e n h e s a y s c o m i n g o u t o f th e m e e ti n g I w a s i n a c e r t a i n
s t a te o f m i n d b e c a u s e o f w h a t I’ d g o n e th r o u g h , w h a t h a d b e e n – w h a t
20

h a d h a p p e n e d a t t h e m e e t in g a n d I p h o n e d M i n i s t e r P r a v i n G o r d h a n
a n d M i n is te r N e n e a n d h e a c t u a lly d i d m e e t w i t h t h e m a n d t h e y
c o n fir m e d t h a t h e m e t w i t h th e m , i t d o e s s e e m , a n d I’ m n o t p u t ti n g i t
h i g h e r t h a n t h a t, i t d o e s s e e m li k e s o m e b o d y w h o w a s q u i t e c o n c e r n e d
a b o u t s o m e t h i n g , w h a t i t m a y b e m i g h t b e t h e q u e s ti o n o f w h e t h e r i t ’s
w h a t h e s a i d o r s o m e t h i n g e ls e b u t it s e e m s th a t t h e r e w a s s o m e t h i n g

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04 DECEMBER 2019 – DAY 196
t h a t h e w a s c o n c e r n e d a b o u t a n d th e n w h e n h e s a y s , w h e n I a r r iv e d i n
P o r t E l iz a b e t h I p h o n e d M r H lo n g w a n e a n d I e x p r e s s e d m y d is g u s t a t
h is r o le in t h i s w h o l e t h in g .
I t d o e s s e e m t o b e c o n s i s te n t w i t h s o m e b o d y w h o le f t th e
m e e ti n g v e r y u n h a p p y w h e r e a s M r D u d u z a n e Z u m a w h e n h e g a v e h is
e v i d e n c e h e r e , h e s a i d t h e m e e ti n g e n d e d , y o u k n o w v e r y – h e s a i d it
w a s fi n e t h e r e w a s , i t w a s n o r m a l I d o n ’ t k n o w i f h e s a i d p o s i t iv e b u t h e
s a i d – I th i n k i t w a s n o r m a l a n d s o – w h ic h is n o t c o n s is t e n t w i t h
s o m e b o d y t h e n p h o n in g a n d ta lk in g a b o u t b e i n g d is g u s t e d a n d s o o n .
10

S o I m e n t i o n t h i s s o t h a t y o u c a n c o m m e n t – o ff e r y o u r c o m m e n t if
y o u ’ d li k e to b u t a ls o I w a n t t o s a y fo r m e t h e r e i s s o m e t h i n g a li t tl e
s tr a n g e a b o u t t h e f a c t th a t a w h o l e m e e ti n g is c o n v e n e d , a n d I ju s t
w a n t y o u t o g iv e m e y o u r p e r s p e c t iv e , y o u k n o w, a w h o l e m e e ti n g is
c o n v e n e d i n c ir c u m s t a n c e s w h e r e th e r e i s h a r d ly a n y d e ta il a b o u t th is
r u m o u r t h a t M r D u d u z a n e Z u m a t e l ls y o u a b o u t, y o u k n o w s o i t d o e s n ’ t
g iv e a n y s o u r c e t h e r e i s n o d e t a il a n d o f c o u r s e t h e m o m e n t M r J o n a s
s a y s a t t h e m e e t in g , o n y o u r v e r s i o n a n d th e v e r s io n o f M r D u d u z a n e
Z u m a s a y s I’ v e n o r e c o ll e c ti o n o f m a k i n g s u c h a ll e g a t i o n s t h a t ’s a b o u t
t h e e n d b u t y o u m i g h t b e a b l e t o g i v e m e y o u r c o m m e n t s w h ic h d e a l

20

w i t h t h a t.
S o I’ m j u s t g iv in g y o u a c h a n c e t o d e a l w i t h t h e s e a s p e c ts .
M R H L O N G WA N E :

Ye s C h a i r i n d e e d , I m y s e l f f o u n d a n u m b e r o f

t h i n g s s tr a n g e , n u m b e r o n e , th e d i s g u s t t h a t y o u t a l k a b o u t t h e
s u r p r is e , t h e s h o c k I ’ m n o t a w a r e o f , n u m b e r t w o it w a s s o m e
ti m e … [ i n t e r v e n e s ] .

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04 DECEMBER 2019 – DAY 196
CHAIRPERSON :

I’ m s o r r y b e fo r e y o u p r o c e e d , w h e n y o u s a y y o u a r e

n o t a w a r e o f , d o y o u m e a n y o u a r e n o t a w a r e o f t h a t , t h a t ’s w h a t Mr
J o n a s s a y s in h is s ta t e m e n t o r e v id e n c e o r y o u ’r e s a y in g y o u ’r e a w a r e
o f t h a t b u t y o u d o n ’ t k n o w w h a t h e ’s t a lk i n g a b o u t ?
M R H L O N G WA N E :

O k a y a t th e t i m e C h a ir t h e e x p r e s s io n s o f d i s g u s t

a n d t h e s h o c k a n d a l l th e s e r e la t e d th in g s I d i d n o t s e e e v id e n c e o f
t h a t a t t h e ti m e , I’ d s o u g h t fo r t h e m e e t i n g t o b e a t a p r iv a t e p la c e s o
t h a t w h e n th e s e m a t te r s a r e d e a l t w i t h t h e r e ’s n o w it n e s s e s o r t h a t k in d
of thing.
10

C h a ir s o m e o f m y c o m m e n ts w o u ld b e , s i n c e th a t m e e t i n g t o o k
p l a c e I a ls o h e a r d r u m o u r s m o n t h s a f te r, m o n th s a f te r th a t t h e r e s e e ms
t o b e th in g s t h a t M r J o n a s is s a y i n g , m o n th s l a t e r. A g a in it b o th e r e d
m e , a g a i n r u m o u r s , n o w n o t h in g w a s s a i d t o m e , n o t d is g u s t n o t h i n g ,
m o n th s a ft e r th e r e s e e m s t o b e th e s e r u m o u r s a n d u l t i m a te ly a t s o m e
p o i n t , n o w t h e s e r u m o u r s f i n a ll y e m e r g e d a s I’ m h o p i n g t h e o t h e r o n e s
w o u ld a l s o e m e r g e , I t h i n k ti m e m a y p r o v e m e r ig h t C h a ir .
S o t h a t e m e r g e d a n d w h e n t h a t e m e r g e d I s a w th a t th e r e w a s
a n e n g a g e m e n t b y t h e A N C w i th M r J o n a s g e t ti n g h is v i e w, w h a t is
s tr a n g e t o m e is t h e r e w a s n o s u c h e n g a g e m e n t w i th m y s e l f a s I

20

t h o u g h t w o u ld h a v e b e e n t h e c o r r e c t t h i n g t o d o .
I f h e ’s c o n s u l t in g h is A N C c o mr a d e s a n d th e r e ’s t h is d i s g u s t
s u r e l y t h e s e c o mr a d e s m u s t a ls o c o n v e n e m e to s a y, c o m r a d e w h a t is
t h is t h i n g t h a t is h a p p e n i n g ? T h a t d i d n o t h a p p e n , m a y b e t h i n g s t o o k
lo n g t i m e to b r e w in h i s h e a d b e fo r e h e e x p r e s s e d h is d is g u s t b u t i t w a s
s tr a n g e t o m e . I w e n t t o t h e P u b lic P r o t e c to r t o k i n d o f u n d e r s t a n d

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04 DECEMBER 2019 – DAY 196
w h a t ’s a c t u a l ly g o i n g o n , w h a t ’s t h e a g e n d a h e r e . I’ m s t il l c o n fu s e d t o
t h is p o in t b e c a u s e i t’s s o m e t h i n g il le g a l t h a t’s s u p p o s e d t o h a v e
h a p p e n e d it w a s a l le g e d to h a v e b e e n a t t h a t m e e ti n g , I k n o w m y s e l f
n o t t o h a v e b e e n a t th a t m e e ti n g .

Things of that nature, just my

c o m m e n t C h a ir, w o u l d b e i n a n y s e r i o u s p o s i t io n is s o m e t h i n g y o u t a k e
t o t h e r e le v a n t a u t h o r i ti e s , s o th a t t h e r e l e v a n t a u t h o r i t ie s p u r s u e t h is
m a t t e r. G o i n g to a l l m a n n e r o f s o c ia l s t o p s a d d r e s s i n g t h is m a t t e r m a y
b e n o t p a r t ic u l a r ly u s e f u l, t h a t’s w h a t b r in g s m e h e r e b e c a u s e t h a t
m a t t e r c o u ld h a v e b e e n a d d r e s s e d a t t h e t i m e .
10

S o C h a ir I h a v e s y m p a t h y i n d e e d fr o m w h e r e y o u a r e a s a
C h a ir o f th is C o m m i s s io n w i t h y o u r p e r s p e c ti v e o f s o m e b o d y s a y s
t h e r e ’s a r u m o u r, th e y d o n ’ t g o i n to th e d e t a i l w e ll s li g h t ly d i ff e r e n t w it h
r e s p e c t s ir, t h e l o g ic is s li g h t ly d i ff e r e n t t h a t ’s w h y I d i d n o t r a i s e t h e
m a t t e r w i t h J o n a s , t h a t’s w h y s o m e b o d y s a id b u t y o u ’r e fr ie n d , y o u
c o u l d r a i s e i t , th a t ’s n o t h o w i t w o r k s .
I n e e d e d t o e s t a b l is h i n a p a r ti c u l a r w a y, I b e li e v e s o m e p o i n t
t h is t h i n g w il l c o m e o u t b u t f r o m w h e r e y o u s i t I c a n u n d e r s t a n d t h a t
a n d e s p e c ia ll y i f s o m e b o d y s a y s t h e y w e n t t o t h i s M i n is t e r a n d th a t
M i n is t e r, t h o s e a r e b i g n a m e s M i n i s te r s in s o c i e ty s ir b e c a u s e i f I h a d

20

t o te ll y o u I w e n t t o J o e a n d S i p h o t h e y w o u l d s o u n d li k e s m a ll n a m e s .
S o b e c a u s e h e w e n t t o t h is M i n is t e r a n d t h a t M in is t e r s o i t w o u l d b e , o h
w h y w o u l d th is g u y d o th a t .
C h a ir I – y o u r w is d o m w i ll p e r h a p s h e l p h e r e b e c a u s e in t h i s
s a m e C o m m i s s io n m a n y f a n c i f u l th i n g s w e r e s a id a ls o b e i n g C h a ir m a n
o f t h is , C h a ir m a n o f t h a t I d id n o t s e e k to c o n t e s t t h a t w h e n I t h o u g h t

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04 DECEMBER 2019 – DAY 196
t h e is s u e s w e r e c a n v a s s e d a n d j u s t to a n s w e r t h e q u e s ti o n t h a t t h e
w o n d e r fu l c o u n s e l m a y h a v e .
CHAIRPERSON :

Ye s .

M R H L O N G WA N E :

C h a ir c o m i n g h e r e i s n o t th e c h e a p e s t t h i n g y o u

g u y s a r e p a i d fo r b y t h e S t a t e i t ’s n o t th e c h e a p e s t t h in g … [ i n t e r v e n e s ] .
CHAIRPERSON :

Mr H l o n g w a n e t h e y g e t p a i d q u i t e – n o t t h e C h a ir.

M R H L O N G WA N E :

I ’l l a c c e p t t h a t s o I ’v e w r i t t e n a ffi d a v i ts to y o u

m a k i n g a l l m a n n e r o f a p p l ic a t i o n s b u t o n f o ll o w i n g t h e C o m m i s s i o n ,
s o m e o f t h e is s u e s I w a n te d t o c a n v a s s w e r e c a n v a s s e d . I o p t e d , o n e
10

n o t m y b a t t le t o fi g h t, t w o , i t ’s a b o v e m y p a y g r a d e , th r e e , fi n a n c i a l
c o n s tr a i n ts . In t h is c a s e b e c a u s e th e g o o d la d y d e c i d e d t o s u b p o e n a
m e I h a d n o c h o ic e th e a tt o r n e y a ls o n e g o ti a te d w i t h th e g u y s , I
v o l u n te e r e d b e c a u s e I r e a l ly a m p e r i p h e r a l to t h i s t h i n g .
S o I w i ll n o t c r e a te a b ig i s s u e o u t o f t h e f a c t t h a t , f o r m y
p u r p o s e is t h a t , a l l m a n n e r o f fa n c i fu l s t o r i e s w e r e t o l d a b o u t m e b u t
it ’s f o r y o u to e s t a b li s h w h y t h a t w o u l d b e t h e c a s e . S o m e b o d y c a n s a y,
b u t w h y d i d n ’ t y o u w a n t t o c o m e a n d c r o s s - e x a m i n e a p a r tic u la r p e r s o n ,
t h e p o in t is m a d e , b e c a u s e I t h i n k th o s e is s u e s w e r e c a n v a s s e d .

I

e q u a l ly d i d n o t c o m e t o c r o s s - e x a m in e M r J o n a s b e c a u s e i t ’s n o t my
20

b a t t le t o f ig h t , i t ’s b i g g e r is s u e s – I ’ m p e r i p h e r a l t o th is th i n g .
CHAIRPERSON :

Ye s .

M R H L O N G WA N E :
CHAIRPERSON :

A n d th e n t h e r e ’s r e a ll y fi n a n c i a l c o n s tr a in ts .
Ja.

M R H L O N G WA N E :

A n d th a n k y o u f o r u n d e r s t a n d i n g m y e a r l ie r

p e r s o n a l c i r c u ms t a n c e I c o u l d n o t c o m e t o th e C o m m is s i o n b u t I’ m

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04 DECEMBER 2019 – DAY 196
h a p p y to b e h e r e n o w.
A D V B A I T S E N G R A N G ATA :
M R H L O N G WA N E :

N o , w e s y m p a th is e w i th t h a t .

Ex c u s e m e ?

ADV BAITSENG

R A N G ATA :

I am

s a y in g

the

Commission

is

s y m p a t h is i n g f o r t h e c ir c u m s ta n c e s t h a t y o u w e n t t h r o u g h .
M R H L O N G WA N E :

T h a n k y o u v e r y m u c h , I a m i n d e b te d .

A D V B A I T S E N G R A N G ATA :
CHAIRPERSON :

Ye s .

W e l l M s R a n g a ta I d o n ’t k n o w h o w m u c h e ls e y o u

n e e d b u t m y f e e l in g i s t h a t a l o t h a s b e e n c o v e r e d h e r e .
10

A D V B A I T S E N G R A N G ATA :

I t h i n k th e C h a ir h a s a c tu a lly c o v e r e d a ll

. . .[ i n t e r v e n e s ]
C H A I R P E R S O N : Fr o m m y s i d e I d o n ’t r e m e m b e r a n y p a r tic u la r is s u e I
s t il l h a v e t h a t I w a n t h i m t o c la r i fy.
A D V B A I T S E N G R A N G ATA :

Ye s , y e s , I d o n ’ t w a n t t o a s k M r

H l o n g w a n e a q u e s ti o n , I j u s t w a n t t o – y o u d o n ’ t h a v e t o c o m m e n t b u t
fr o m w h a t y o u h a v e e n g a g e d , a n d I r e a l ly – I s y m p a th is e b e c a u s e t h is
is a s th e C h a ir h a s a lr e a d y a l lu d e d , w h a t r e a lly p u z z l e s m e y o u k n o w
y o u ’r e f e e l in g p i ty f o r u s y o u k n o w p u t ti n g th e p u z z l e t o g e t h e r, w h a t
p u z z l e s m e s ti ll is a ft e r t h e m e e t in g o n t h e 2 3 r d o f O c t o b e r 2 0 1 5 a l m o s t
20

t w o m o n t h s a f t e r w h a t w a s s p o k e n a b o u t o r w h a t w a s a ll e g e d t o h a v e
b e e n it a c t u a l ly h a p p e n e d o n t h e 9 t h o f D e c e m b e r 2 0 1 5 a n d o n e a s k
o n e s e lf w h e th e r i t w a s a c o i n c id e n c e o r n o t, y o u m i g h t n o t b e a b le t o
c o m m e n t t o t h a t b u t i t is j u s t a n o b s e r v a ti o n y o u k n o w tr y in g t o
u n d e r s t a n d w h a t a c tu a lly h a p p e n e d .
M R H L O N G WA N E :

P l e a s e c o u n s e l, t h e p o i n t th r o u g h y o u C h a ir.

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04 DECEMBER 2019 – DAY 196
R e a d m e th e p o in t .
A D V B A I T S E N G R A N G ATA :

I a m s a y i n g y o u m i g h t n o t b e a b l e to

c o m m e n t t o it b u t it is j u s t a n o b s e r v a t io n o f w h a t tr a n s p ir e d a l m o s t t w o
m o n th s a f t e r th e m e e ti n g o f w h a t h a s b e e n a ll e g e d to h a v e t a k e n p l a c e
in d e e d to o k p l a c e a b o u t t w o m o n t h s a g o , y o u m i g h t n o t b e a b l e to
a n s w e r t h a t q u e s t i o n u n l e s s y o u t h in k y o u w a n t to a n s w e r t o i t .
CHAIRPERSON :

W e l l I t h i n k w h a t c o u n s e l i s s a y in g is o n e o f t h e

t h i n g s t h a t M r J o n a s s a i d h e w a s t o l d b y th e G u p t a fa m i ly m e m b e r a t
t h a t m e e t i n g t h a t h e s a y s y o u a t t e n d e d w a s th a t M r N e n e w a s g o in g t o
10

g o a s M in is t e r o f Fi n a n c e , I c a n ’t r e m e m b e r t h e a c t u a l w o r d s u s e d b u t
in e ff e c t t h a t h e w a s g o i n g to g o o r h e w a s g o i n g to b e d is m is s e d o r
fir e d a n d s h e i s s i m p ly s a y i n g y o u m i g h t n o t b e a b l e t o s a y a n y t h i n g b u t
w h a t is in t e r e s ti n g s h e is s a y i n g i s th a t in d e e d o n t h e 9 t h o f D e c e m b e r
2 0 1 5 Mr N e n e w a s d is m is s e d .
M R H L O N G WA N E :

C h a ir I u n d e r s ta n d th e p o in t t h a t y o u d o n ’ t e x p e c t

m e to c o m m e n t a s it w o u ld b e s p e c u l a t i o n in d e e d , w h a t a l s o p u z z l e s
m e c o u n s e l is t h a t w h e n t h a t e v e n t o f D e c e m b e r 9 t h h a p p e n e d M r J o n a s
was not removed.
C H A I R P E R S O N : Ye s , b u t r e m e m b e r h e h a d n o t b e e n to ld t h a t h e w o u l d
20

b e r e m o v e d a c c o r d i n g t o h is v e r s i o n .
M R H L O N G WA N E :

B u t a c c o r d i n g t o th e s a m e v e r s i o n h e h a d b e e n

t o l d th a t h e w o u l d b e p r o m o te d , I a m j u s t d e li b e r a t e ly w i t h h o ld in g o n
s a y in g h e w a s n o t p r o m o te d .
C H A I R P E R S O N : Ye s I th i n k t h e – b u t I th in k o n h is e v i d e n c e h e w o u l d
b e p r o m o t e d i f h e a c c e p te d t h e o ff e r t h a t w a s g iv e n to h i m o n h i s

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04 DECEMBER 2019 – DAY 196
e v i d e n c e a n d h e s a y s h e d i d n ’ t a c c e p t t h e o ffe r fr o m t h e G u p t a f a m il y
m e m b e r.
M R H L O N G WA N E :

W e ll fo r m e th e r e i s a n u m b e r o f p u z z l e s h e r e b u t

if t h e r e w a s i n te n s i ty in a ll t h e s e t h i n g s t h a t w e r e s u p p o s e d to h a v e
h a p p e n e d s u r e ly h e c o u l d n o t h a v e r e m a i n e d in t h a t p o s i ti o n , b u t t h a t
is f o r y o u w is e r p e o p l e to d e t e r m i n e .
CHAIRPERSON : Ja.
M R H L O N G WA N E :

Because it is one thing to say something that was

s p o k e n a b o u t h a p p e n e d , I d o n ’t w a n t t o t a l k a b o u t th e p r e d i c t i o n o f r a i n
10

b u t if I s e e i t i s g o i n g t o r a i n i t r a i n s t h e n m u s t c a ll it a b i g p u z z l e , t h e
b i g g e r p u z z le f o r m e i s e v e n d id t h a t w h ic h is c l a i m e d to h a v e
happened happened because of that I think I have heard here Mr Zuma
S e n i o r i n d ic a ti n g t h a t h e d i d n o t . . . [i n d is ti n c t ] t h e o n e t h a t m a d e t h e
a p p o i n t m e n ts , t h a t w a s h i s e v i d e n c e u n d e r o a t h .
A D V B A I T S E N G R A N G ATA :
M R H L O N G WA N E :

Ye s .

S o I s p e c u l a te o n w h y c e r t a i n th i n g s h a p p e n e d a t a

p a r t ic u l a r t i m e , th e b e s t p o s i t io n t o s a y t h a t, b u t f o r m e a s a n o r d i n a r y
p e r s o n if t h a t i s i n d e e d t h e c a s e h o w d o e s t h is o n e r e m a in in p o s i ti o n .
I t h i n k i t i s a p u z z l e t o o , b e c a u s e t h e r e is s u p p o s e d t o h a v e b e e n t h i s
20

f a c i li ty.
A D V B A I T S E N G R A N G ATA :
M R H L O N G WA N E :

Th a n k y o u .

H e h a s t o h a v e g o n e t o o C h a ir.

C H A I R P E R S O N : Ye s , w e l l I h a v e t o l d y o u w h a t I t h i n k a b o u t t h a t , y o u
a r e e n t it l e d t o h a v e i t r e m a i n a s a q u e s ti o n i n y o u r m i n d .

The one part

w h ic h I w a n t t o c l a r if y is d id y o u s a y e a r l i e r o n t h a t s in c e t h a t m e e t i n g

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04 DECEMBER 2019 – DAY 196
y o u r fr i e n d s h i p o r r e l a ti o n s h i p w i t h M r J o n a s is n o lo n g e r t h e s a m e o r
d i d y o u s a y i t h a s c o n ti n u e d i n th e s a m e w a y ?
M R H L O N G WA N E :

C h a ir I h a v e n o t h a d a n y m e e t in g s w i t h M r J o n a s

s in c e t h a t t i m e .
CHAIRPERSON :

S o r r y ju s t r e p e a t s ir.

M R H L O N G WA N E :

I h a v e n o t h a d a n y m e e t in g s w i th J o n a s s i n c e t h a t

ti m e .
C H A I R P E R S O N : Ye s .
M R H L O N G WA N E :
10

I d i d s e e h i m a t t h a t – i n .. . [ in d i s ti n c t ] h o t e l , h e

said hi, I responded back.
C H A I R P E R S O N : Ye s .
M R H L O N G WA N E :

S o m e ti m e t h i s y e a r.

C H A I R P E R S O N : Ye s .
M R H L O N G WA N E :

I s t il l o p e r a t e o n t h e b a s is o f t h e s e t h i n g s w i ll

u n r a v e l t h e m s e lv e s t h e r e , th e y a r e a b o v e m y p a y g r a d e , I s ti ll i n s is t .
CHAIRPERSON :

W e ll i t w o u l d s e e m t h a t i t w o u ld b e fa ir c o m m e n t

t h e r e f o r e t o s a y s in c e th a t i f y o u h a v e n ’ t m e t h i m s i n c e t h e n o th e r t h a n
m a y b e o n t h e o c c a s i o n w h e r e y o u s a y h e j u s t s a i d h i a n d y o u s a id h i , i t
w o u ld s e e m t h a t th in g s i n te r ms o f y o u r fr i e n d s h ip a n d y o u r r e l a t i o n s h ip
20

a r e c e r ta in ly n o l o n g e r t h e s a m e b e c a u s e y o u s a i d t h a t p r i o r to t h is
m e e ti n g y o u w e r e in t e r a c ti n g w i th h i m v e r y fr e q u e n t ly, is t h a t r ig h t ?
M R H L O N G WA N E :

T h a t w o u l d b e c o r r e c t s ir, m a y b e I a m l e s s

r e q u ir e d b e c a u s e a t t h e t i m e h e w a s n o t e s t a b li s h e d .
C H A I R P E R S O N : Ye s . N o , n o t h a t ’s f in e .
A D V B A I T S E N G R A N G ATA :

T h a n k y o u C h a ir, th a t w il l b e t h e e n d o f

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04 DECEMBER 2019 – DAY 196
m y q u e s ti o n i n g f o r t h is w i t n e s s .
C H A I R P E R S O N : Ye s o k a y. I h a v e n o f u r t h e r q u e s ti o n s , I a m r e a d y to
e x c u s e – y o u h a v e n o q u e s ti o n s , j a .
A D V B A I T S E N G R A N G ATA :
CHAIRPERSON:

Th a n k y o u v e r y m u c h C h a ir.

Ye s , th a n k y o u v e r y m u c h M r H l o n g w a n e f o r c o m in g

a n d y o u a r e e x c u s e d , i t is u n li k e ly th a t w e w il l a s k y o u t o c o m e b a c k
b u t if a n e e d a r is e s w e w i ll a s k y o u .
M R H L O N G WA N E :

Th a n k y o u v e r y m u c h .

Ye b o .

C H A I R P E R S O N : W e a r e g o i n g t o t a k e t h e l u n c h a d jo u r n m e n t n o w, it i s
10

t w e n ty fi v e t o t w o , w e a r e g o i n g t o r e s u m e a t t w e n ty f iv e t o th r e e fo r
t h e n e x t w i tn e s s .
A D V B A I T S E N G R A N G ATA :

Th a n k y o u C h a ir.

C H A I R P E R S O N : W e a d jo u r n
REGISTRAR:

A ll r is e .

I N Q U I RY A D J O U R N S
I N Q U I RY R E S U M E S
C H A I R P E R S O N : Ye s M s R a n g a t a .
A D V B A I T S E N G R A N G ATA : G o o d a f t e r n o o n C h a ir.
C H A I R P E R S O N : Ye s g o o d a ft e r n o o n e v e r y b o d y.
20

A D V B A I T S E N G R A N G ATA : Th a n k y o u C h a ir. C h a ir w e h a v e p l a n n e d
f o r t h e s e c o n d w i t n e s s w h o is M s M o r o a d i C h o lo t a . T h e l e g a l t e a m is –
w a s r e a d y t o – t o le a d h e r e v id e n c e . U n fo r t u n a t e ly w e d o n o t h a v e h e r
s t a te m e n t . A t t h i s s ta g e Ms M a k h a p e l a w o u l d l ik e t o a d d r e s s t h e C h a ir.
C H A I R P E R S O N : W e l l l e t u s d o t h a t t h e n t h e – s h e c a n a ls o p l a c e o n
r e c o r d t h a t t h e y r e p r e s e n t th e w i t n e s s .

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04 DECEMBER 2019 – DAY 196
A D V B A I T S E N G R A N G ATA : Ye s C h a i r.
CHAIRPERSON : Ja thank you.
A D V B A I T S E N G R A N G ATA : Ye s t h a n k y o u .
A D V L U I S A M A K A P E L A : G o o d a f te r n o o n C h a ir.
CHAIRPERSON : Good afternoon.
A D V LU I S A M A K A P E L A :

M y n a m e is L u i s a M a k a p e la . I a m a m e m b e r

o f t h e J o h a n n e s b u r g S o c i e ty o f A d v o c a t e s a n d th e P a n A f r ic a n B a r
A s s o c ia t io n o f S o u th A fr ic a .
C H A I R P E R S O N : Ye s .
10

ADV LUISA MAKAPELA :

I a m t h e l e g a l r e p r e s e n t a tiv e f o r Ms

N o m a l a n g a M o r o a d i C h o l o ta a n d o u r i n s tr u c t in g a t t o r n e y s is Vic t o r
N k h w a s h u A t to r n e y s In c o r p o r a te d . C h a ir w e j u s t h a v e a n is s u e w i th t h e
s t a te m e n t a n d t h e r e a s o n in g w h y i t w a s n o t – o r t h e r e a s o n b e h in d – I
b e g y o u r s – t h e r e a s o n b e h i n d w h y i t w a s n o t fi le d a n d i t i s d u e t o th e
f a c t t h a t Ms C h o l o t a r e c e i v e d t h e s u m m o n s w i t h th e 3 .3 N o t ic e a t t a c h e d
b u t i t a p p e a r e d th a t th e 3 . 3 N o t ic e w a s d a te d 1 A u g u s t 2 0 1 9 a n d s h e
h a d n o t r e c e i v e d th a t 3 . 3 N o t ic e .
CHAIRPERSON : Hm.
A D V L U I S A M A K A P E L A : A n d s o w e s e e k t h e C h a ir ’s in d u l g e n c e t o fil e
20

t h e w r i t t e n s t a t e m e n t t o a c c o r d w i t h h e r v e r s io n o f e v e n t s a n d p r e s e n t
t h e w i t n e s s w i t h t h e w it n e s s s t a t e m e n t r a t h e r t h a t t h e s w o r n a ff id a v i t a t
t h a t – a t a t i m e th a t w il l b e d e t e r m i n e d b y t h e C h a ir.
C H A I R P E R S O N : H m . H m . Ye s I a m a w a r e th a t th e r e i s n o s t a t e m e n t
fr o m h e r a n d I w a s c o n c e r n e d a b o u t t h a t a s w e l l.

But I had been

in f o r m e d th a t th e r e w e r e c h a l le n g e s o f h e r – o n r e g a r d t o h e r

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a v a i la b ili t y b e c a u s e s h e w a s n o t w i th i n th e c o u n t r y f o r a c e r ta in p e r i o d
o f ti m e . S o i t w o u ld b e c o n v e n ie n t i f b e fo r e s h e g iv e s h e r e v i d e n c e w e
c o u l d h a v e h e r s t a t e m e n t th a t d e a ls w i th a ll t h e m a t t e r s a n d is s u e s t h a t
s h e s h o u l d d e a l w it h .
A D V L U I S A M A K A P E L A : Ye s .
CHAIRPERSON :

S o I th in k t h a t it w o u l d b e f in e . I u n d e r s t a n d t h a t

t h e r e is n o p r o b le m fr o m t h e c o m m i s s i o n ’s l e g a l t e a m a s w e l l t h a t w e
a d j o u r n t h e h e a r in g t o e n a b le y o u to c o m p le t e h e r s t a t e m e n t t h a t I
u n d e r s t a n d h a s a l r e a d y b e e n s t a r t e d . B u t h a v e i t f i n a li s e d a n d h a v e i t
10

ty p e d a n d g i v e i t to t h e c o m m i s s i o n ’s l e g a l t e a m . I t h i n k i t w il l h e lp i f
b e f o r e y o u fi n a l is e i t y o u h a v e a d i s c u s s i o n w i th M s R a n g a t a t o m a k e
s u r e t h a t y o u a r e o n t h e s a m e p a g e w it h r e g a r d t o w h a t is s u e s t h e
s t a te m e n t s h o u l d c o v e r. S o t h a t w h e n y o u g iv e i t t o t h e m t h e r e is n o
c o m p la i n t t h a t m a y b e i t d o e s n o t c o v e r c e r t a i n i s s u e s t h a t th e y r e g a r d
a s i m p o r ta n t .
t o m o r r o w.

So – so the – from m y side we could adjourn to

W e c o u l d a d j o u r n t o Fr i d a y.

I und erstand that tomorrow

m i g h t b e a – m i g h t b e d i ffi c u l t f o r M s C h o l o ta .
A D V L U I S A M A K A P E L A : Ye s t h a t is c o r r e c t C h a ir. M r C h o l o ta is n o t
a v a i la b le f o r t o m o r r o w.
20

CHAIRPERSON : Ja.
ADV LUISA MAKAPELA :

H o w e v e r s h e h a s i n d ic a t e d a v a il a b il i ty f o r

Fr id a y.
C H A I R P E R S O N : Fo r F r i d a y.
A D V L U I S A M A K A P E L A : A n d w e a r e a l s o a v a i la b le f o r Fr i d a y.
CHAIRPERSON :

Ye s .

O k a y.

T h e n n o t h a n k s le t m e h e a r w h a t M s

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R a n g a t a h a s t o s a y b u t o th e r w i s e it s e e m s t o m e t h a t w e c a n
a c c o m m o d a t e y o u o n t h a t – i n th a t r e g a r d .
A D V L U I S A M A K A P E L A : T h a n k y o u C h a ir.
CHAIRPERSON : Ja.
A D V B A I T S E N G R A N G ATA : T h a n k y o u C h a ir. W e a r e i n d e b te d a n d w e
a r e i n a g r e e m e n t t h a t t h e r e is a n e e d f o r t h e w i tn e s s to p e n d o w n t h e
s t a te m e n t a n d I t h in k I – a ls o i t is p r o p e r f o r t h e l e g a l t e a m to r e g is t e r
t h a t e ff o r ts h a v e b e e n m a d e a n d a c t u a l ly t h e r e h a v e b e e n s o m e
c o n s u l t a ti o n s fr o m t h e i n v e s ti g a tiv e t e a m w i t h t h e w it n e s s a n d w h e r e
10

a tt e m p ts h a v e b e e n m a d e f o r d r a ft s t a te m e n ts t h a t h a v e b e e n – h a v e
b e e n s u b m it t e d fo r h e r t o c o n s i d e r.

A n d t h o s e e ff o r ts h a v e n o t b e e n

s u c c e s s fu l a n d t h a t is t h e r e a s o n w h y w e fi n d o u r s e lv e s h e r e t o d a y
having to sit here without her statement.

But that being said we –

b e c a u s e w e w o u l d w a n t t o d e a l w i th t h e e v id e n c e o f t h i s w i tn e s s s o w e
a r e a g r e e a b l e t o r e c o n v e n e a g a i n o n F r i d a y.

O b v i o u s l y o n th e

a d m i s s i o n o f t h e d i r e c t i o n fr o m t h e C h a ir. Ye s .
C H A I R P E R S O N : O k a y n o t h a t is fi n e . M s C h o l o t a y o u w il l f o l lo w t h e
d is c u s s io n ?
M S C H O L O TA : Ye s S ir.
20

C H A I R P E R S O N : Ye s .
M S C H O L O TA : Ye s S ir.
CHAIRPERSON :

N o th a t i s fi n e . O k a y w e w il l th e r e fo r e a d j o u r n t h e

h e a r in g o f y o u r e v i d e n c e t o F r i d a y a t I t h i n k l e t u s m a k e i t h a l f p a s t
n i n e t o Fr i d a y a t h a l f p a s t n i n e .
A D V B A I T S E N G R A N G ATA : Th a n k y o u C h a ir.

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04 DECEMBER 2019 – DAY 196
C H A I R P E R S O N : Fr i d a y th is w e e k a t h a lf p a s t n in e .
A D V B A I T S E N G R A N G ATA : Th a n k y o u C h a ir .
C H A I R P E R S O N : B y w h i c h ti m e t h e n I w i ll h e a r M s C h o l o t a ’s e v id e n c e .
B u t t h e p r e p a r a t io n o f t h e s t a te m e n t a s I u n d e r s t a n d w i ll c o n t i n u e
i m m e d i a t e ly a f te r th is a d j o u r n m e n t a n d – a n d I w o u ld li k e t o r e c e i v e a
c o p y a s s o o n a s t h e le g a l te a m h a s g o t o n e a n d h a s l o o k e d a t it to s e e
if it is – c o v e r s a ll t h e a r e a s .
A D V B A I T S E N G R A N G ATA : Th a n k y o u C h a ir.
C H A I R P E R S O N : S o – s o – b u t t h e t w o te a m s c a n b e in c o n t a c t a n d in
10

d is c u s s io n t o m a k e s u r e t h a t a s s o o n a s i t is r e a d y it c a n b e g i v e n to
t h e c o m m i s s io n ’s l e g a l te a m .
A D V B A I T S E N G R A N G ATA :

Th a n k y o u C h a ir.

A D V L U I S A M A K A P E L A : T h a n k y o u C h a ir.
C H A I R P E R S O N : Ye s w e a d jo u r n t h e p r o c e e d in g s t h e n u n ti l Fr i d a y t h i s
w e e k a t h a lf p a s t n in e . W e a d jo u r n .
REGISTRAR: All rise.
I N Q U I RY A D J O U R N S TO D E C E M B E R 2 0 1 9

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