COMMISSION OF INQUIRY INTO STATE CAPTURE
HELD AT
PARKTOWN, JOHANNESBURG

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12 MARCH 2019

DAY 64

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12 MARCH 2019 – DAY 64
PROCEEDINGS HELD ON 12 MARCH 2019
CHAIRPERSON: Good morning Ms Hofmeyr, good morning everybody.
ADV KATE HOFMEYR: Good morning Chair.
CHAIRPERSON: Are you ready to proceed?
ADV KATE HOFMEYR: We are indeed.
CHAIRPERSON: Thank you. You may.
ADV KATE HOFMEYR: Thank you Chair. Mr Bester and the Chair if I could ask you to
take out Exhibit U4 File 4 which is where we completed the testimony yesterday and
the relevant page is page 810. Mr Bester you will recall that this was the letter dated
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the 24 June 2015 that you wrote recording the material terms that the parties had
agreed on at a meeting on the 19 June 2015, do you recall that?
MR JOHANN ANDRIES BESTER: Yes I do recall that.
ADV KATE HOFMEYR: We were dealing with some of the provisions of this letter the
first of those which is reflected at paragraph 1 on the page is that the coal was going to
be supplied from the colliery extension and it was stipulated that it would have to
comply with the full combustion test to be conducted on that coal and we had spoken
previously in the evidence about the necessity for that provision because that coal had
not yet been mined nor had it been tested. Is that correct?
MR JOHANN ANDRIES BESTER: Correct.

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ADV KATE HOFMEYR: We were then dealing with the second paragraph on that
page. I would like to just look at that. What is set out there is that the proposed volume
is 200 000 tonnes per month from October 2015 subject to all the required Eskom
approvals including a requirement for the volume at the relevant power station. Mr
Bester as I recall your evidence yesterday you place some emphasis on that as a
protection for Eskom. Can you explain to us what you meant by that?

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MR JOHANN ANDRIES BESTER: I can only try and think of what my reasoning was
at the time and as I tried to indicate yesterday it may have been that this is a relatively
new supplier. If it was to increase from 100 000 tonnes per month to 200 000 tonnes
per month it would move from being almost a 10% supply to Majuba Power Station to
almost being a 20% supply to Majuba Power Station. So if this supplier was to fail and
was not able to deliver it would not be – it would not be good for Eskom and it would be
more difficult to replace. 100 000 tonnes is something that we can probably manage,
200 000 tonnes would be more problematic.
ADV KATE HOFMEYR: So as I read this you not committing to taking the additional
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tonnes you are saying Eskom will take it if there is a need for that volume at the power
station, is that a correct reading?
MR JOHANN ANDRIES BESTER: I agree with that yes.
ADV KATE HOFMEYR: Right. And then in the third paragraph on that page you
stipulate that all contract conditions and subsequent modifications as per the current
contract remain and you go on to say “further to the above it is important to note that
the record of discussions on the abovementioned material terms are all subject to a
duly signed modification to the current coal supply agreement between the parties and
compliance with the following.” And then you stipulate a series of further conditions
that we referred to yesterday. What I would like to focus on here is your insistence at

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the part of the letter that there be a duly signed modification to the existing coal supply
agreement. I want to suggest to you that that is yet another protection or Eskom in
relation to this engagement. Would you agree with that?
MR JOHANN ANDRIES BESTER: Yes I would agree with that but in hindsight now it
would not have been proper to have signed an amendment to the original agreement on
this basis. If you recall it would have been outside of mandate to modify an existing

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contract to essentially double the volume on that. I think I would have been – it would
have been incorrect to have signed an amendment. I may have erroneously worded it
that that way but it would have been incorrect but there was an attempt to protect
Eskom’s interests.
ADV KATE HOFMEYR: Okay let us just pause on that for a moment. If it was outside
the terms of the medium term mandate.
MR JOHANN ANDRIES BESTER: Ja.
ADV KATE HOFMEYR: Why is any agreement being forged at all with Tegeta?
MR JOHANN ANDRIES BESTER: As I indicated yesterday I penned this letter to
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acknowledge more than – it is not a contract so in my mind it was really to acknowledge
the letter and the discussions that had – as I said probably being had with Ayanda and
a letter that had been received.
ADV KATE HOFMEYR: Mr Bester we dealt with the point yesterday that this letter was
only an acknowledgement.
MR JOHANN ANDRIES BESTER: Yes.
ADV KATE HOFMEYR: And I put to you in the course of our discussion that at least
the language of the letter does not convey that. Do you accept that?
MR JOHANN ANDRIES BESTER: I accept that may be the case yes.
ADV KATE HOFMEYR: Are you aware that Eskom regarded this as an agreement

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between itself and Tegeta?
MR JOHANN ANDRIES BESTER: I was not aware of that but I was subsequently –
you subsequently informed me that Eskom used this in 2016 I think to attempt to
approach National Treasury.
ADV KATE HOFMEYR: Correct we will come to that. I would like to then go to what
happens with this letter if I may and Chair this is the aspect of the Brakfo ntein evidence

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that has been derived from the hard drive data that the commission procured and had
recovered overseas. You heard about that in the application to receive that. So this is
not aspects of the hard drive data that we understand has previously been disclosed in
the public domain and for that purpose we need to go to the previous page, page 809.
MR JOHANN ANDRIES BESTER: Alright.
ADV KATE HOFMEYR: You will see at page 809 that in the sort of the middle of the
page there is a heading Forwarded Message and it is an email from Ms Nteta to Mr
Nath. Do you see that Mr Bester?
MR JOHANN ANDRIES BESTER: I do yes.
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ADV KATE HOFMEYR: And what it says is:
“Good day please find attached letter for your attention.
Regards.”
Now that letter that we have just been looking at is the letter that was attached to the
email as it was retrieved from the hard drive. And what I would like to then focus on is
the email that appears above that on the page. Mr Bester can you just indicate for us
who is that from and to?
MR JOHANN ANDRIES BESTER: It appears to be from Mr Ravindra Nath and he
send it to Mr Tony Gupta.
ADV KATE HOFMEYR: And can you tell us what time of the day that is on the 24

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June?
MR JOHANN ANDRIES BESTER: That appears to be ten o’clock in the morning I
would guess.
ADV KATE HOFMEYR: Indeed. I think the precise time is seven minutes past ten.
MR JOHANN ANDRIES BESTER: Yes.
ADV KATE HOFMEYR: And could you read for us the text of that email?

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MR JOHANN ANDRIES BESTER:
“Dear Tony G please find enclosed the letter from Eskom and
draft letter as discussed. Regard Ravindra.”
I am not sure why he would refer to it as a draft letter it was signed.
ADV KATE HOFMEYR: Well I can explain that to you in a moment because what he is
actually signalling is that there are two letters attached. If you look at the sentence.
“Please find enclosed the letter from Eskom” that is your letter.
MR JOHANN ANDRIES BESTER: Right.
ADV KATE HOFMEYR: And he is referring to a draft letter as discussed. So let us go
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to look at that draft letter. The draft letter which is an attachment then to that email you
will find at page 812. Mr Bester this is a letter, draft letter which as I say was attached
to that email when it was recovered from the hard drive that is entitle d Coal Supply
Offer; Tegeta Exploration Resources Brakfontein and Brakfontein Extension Collieries.
Could you please then read the first sentence of that draft letter for us?
MR JOHANN ANDRIES BESTER:
“We refer to the above and wish to thank you for your offer to
supply an additional 100 000 tonnes per month of coal from
Eskom from” …
ADV KATE HOFMEYR: To Eskom apologies.

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MR JOHANN ANDRIES BESTER:
“sorry to Eskom from your Brakfontein and Brakfontein Extension
Collliers.”
ADV KATE HOFMEYR: With effect from the 1 October 2015.
MR JOHANN ANDRIES BESTER: Correct.
ADV KATE HOFMEYR: Who is the purported author of that letter as you read it?

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MR JOHANN ANDRIES BESTER: It should be from myself as I said Ayanda probably
would have drafted this letter for me and I would have applied my mind to it and if I was
comfortable with it I would have set that out. I would not have been aware that she was
being prompted from outside of Eskom.
ADV KATE HOFMEYR: But this letter as it is attached to Mr Nath’s email is a draft of a
letter that Mr Nath prepared?
MR JOHANN ANDRIES BESTER: Yes I would guess that then it would have been him
that drafted that. I would assume that yes.
ADV KATE HOFMEYR: Right but purporting to write what Eskom should be saying to
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Tegeta.
MR JOHANN ANDRIES BESTER: Correct.
ADV KATE HOFMEYR: Is that a fair reading?
MR JOHANN ANDRIES BESTER: Yes.
ADV KATE HOFMEYR: Well let us go over the page to see how that draft gets Eskom
and you will find that at page 813. This is a further email recov ered from the hard drive,
can you tell us who it is from and to?
MR JOHANN ANDRIES BESTER:

It is from Ravindra Nath and it is to Ayanda

Ntshanga.
ADV KATE HOFMEYR: And at what time is it send on Wednesday the 24 June?
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MR JOHANN ANDRIES BESTER: Twenty past ten.
ADV KATE HOFMEYR: So just to get the time line right at seven minutes past ten Mr
Nath sends to Mr Gupta the letter that he had received via Ms Ntshanga from you dated
the 24 June.
MR JOHANN ANDRIES BESTER: Ja.
ADV KATE HOFMEYR: He forwards that to Mr Gupta together with a draft letter as

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discussed quote. That is the draft that we have just looked at which is the wording of a
letter that Tegeta would like to receive from Eskom and I say that because in the email
we looking at at the moment thirteen minutes later Mr Nath sends that draft letter to Ms
Ntshanga and if you could please read for us what is said in that email to Ms Ntshanga
who at that stage I understand was in fact Ms Ntete but that is a detail.
MR JOHANN ANDRIES BESTER: That is probably still her email address.
“Hello Madam thank you for the letter however from our bankers
purposes we need letter on the enclosed lines kindly help in this
regard.”
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ADV KATE HOFMEYR: And let us go over the page that 814 that is a replica of the
draft email that we saw previously is it not?
MR JOHANN ANDRIES BESTER: It appears to be exactly the same wording as the –
as on page 812 yes.
ADV KATE HOFMEYR: Right so thirteen minutes after Mr Nath forwards your letter
and his draft to Mr Gupta Mr Ntshanga receives that draft. I would like to look at what
this draft changes about the position that was reflected in your letter of that same day?
Let us look first at – you have read for us the first sentence which is thanking Tegeta for
their offer. The second sentence states the obvious which is that this is going to
increase the total supply to 200 000 tonnes per month. And then it goes on to use the

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wording of your previous letter “following our meeting on the 19 June 2015 Eskom
wishes to record some of the material terms the parties agreed on.” And below that are
the three aspects of the previous letter that you had written on the 24h. But with I am
going to suggest some material modifications. And I am going to suggest to you Mr
Bester for your comment that these modifications are ultimately to the detriment of
Eskom and to the benefit of Tegeta. So let us go through them. You will recall that your

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letter of the 24 th required any new coal supplied from the extension to be subjected to a
successful combustion test.

That paragraph has now been amended to read as

follows:
“The additional coal supplied must comply with the relevant
specifications contained in the current contract.”
I just need to pause there to engage with the Chair about a debate we ha d at - towards
the end of yesterday Chair. You will recall that you made the point that we could
understand the letter to indicate that the parties did not regard the omission of that
double asterisk to have taken place pursuant to the May 2015 letter. And I had
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indicated to you we would see a response from Tegeta.
CHAIRPERSON: Yes.
ADV KATE HOFMEYR: That suggested otherwise.
CHAIRPERSON: Yes.
ADV KATE HOFMEYR: This we submit is that response.
CHAIRPERSON: Yes.
ADV KATE HOFMEYR: Because what is only stipulated here is that it must comply
with the relevant specifications contained the current contract but if those two asterisks
are gone in the current contract and no reference is made here to the requirement for a
successfully combustion test that has gone has it not Mr Bester?

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MR JOHANN ANDRIES BESTER: Absolutely, absolutely.
CHAIRPERSON: Of course – of course you know when we were looking at that letter
of the 24 th it was on the assumption that it was accepted that it reflected both parties
accepted that it reflected their agreement.

So there seems to be something

subsequently ja.
ADV KATE HOFMEYR: Indeed Chair.

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CHAIRPERSON: Yes. Ja.
ADV KATE HOFMEYR: Let us see what happened with the volumes. You will recall
your letter of the 24 th put in a key protection for Eskom and you have explained to the
Chair the rationale for it which was that Eskom was not to be obliged under the
language of your letter to take additional tonnes. It was going to take them if it required
them but let us see how that changes under paragraph 2. Could you read for us what
is stated there?
MR JOHANN ANDRIES BESTER: On – from their draft?
ADV KATE HOFMEYR: From their draft yes.
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MR JOHANN ANDRIES BESTER:
“Volumes the proposed volume is 200 000 tonnes per month
from 1 October 2015.”
ADV KATE HOFMEYR: So what is missing from your previous letter is the further
stipulation that Eskom would take it if it needed it, correct?
MR JOHANN ANDRIES BESTER: Correct.
ADV KATE HOFMEYR: And then the contract conditions at 3 are a replica as I have it
what you had stated. It reads: “All conditions and subsequent modifications thereof as
per current contract with a fairly long number remains.” But what it does not include is
what you had inserted thereafter which was that requirement for a formal modification

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to the existing coal supply agreement in terms that satisfied the amendment
requirements of that agreement. Do you accept that that is also gone?
MR JOHANN ANDRIES BESTER: I agree yes it is gone.
CHAIRPERSON: I am sorry I missed that last part which you say is gone. Just …
ADV KATE HOFMEYR: Chair let me go over it again. You will see if we just compare
it to 810 which is Mr Bester’s letter of that date.

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CHAIRPERSON: Ja.
ADV KATE HOFMEYR: Towards the bottom of the page
CHAIRPERSON: Yes.
ADV KATE HOFMEYR: There is that further stipulation which is that further to the
above it is important to note that the record of discussions on the abovementioned
material terms are all subject to a duly signed modification of the cu rrent coal supply
agreement between the parties. So I am saying that has gone.
CHAIRPERSON: Yes.
ADV KATE HOFMEYR: There is no stipulated requirement now that we must do this
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all correctly and in accordance with the amendment requirements of the agreeme nt.
CHAIRPERSON: Yes.
ADV KATE HOFMEYR:

But Chair it goes further than that because after that

paragraph on Mr Bester’s letter of the 24 th there were further conditions stipulated.
CHAIRPERSON: Yes three of them.
ADV KATE HOFMEYR: Three of them none of those make an appearance in the
redraft.
CHAIRPERSON: Yes.
ADV KATE HOFMEYR: That is received from Tegeta.
CHAIRPERSON: Yes.
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ADV KATE HOFMEYR: Mr Bester at this point I would just like to ask. Is it customary
for Eskom to receive drafts of its letters from its suppliers?
MR JOHANN ANDRIES BESTER: Definitely not.
ADV KATE HOFMEYR:

Had this ever happened before in your time at Eskom?

MR JOHANN ANDRIES BESTER: No well the other thing that – that is abnormal is if a
– look I would normally not be involved with the medium term on – at this level. I think

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another thing that probably would have happened under normal circumstances is that I
probably would have – probably would have used firm language but being polite I would
have to told the supplier to get lost in a polite way.
ADV KATE HOFMEYR: Well let us just pause on that for a moment if we may?
MR JOHANN ANDRIES BESTER: Yes.
ADV KATE HOFMEYR: Why did that not happen on this occasion?
MR JOHANN ANDRIES BESTER: I mean overnight I have reflected a lot on that and I
am trying to think where I was and I do recall as I have tried to indicate this is not
something I should have been involved with at the level of detail. I should have been
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able to delegate to one of my delegates who should have had the best interests of – at
heart. I – it is not evident whether – it was not evident that the time and I cannot make
any allegations that – that she was aware of that or was trying to mislead me but it is
quite – it may be possible. It may be possible that because of the flow of information
that I did start missing things because of the pressure. I would admit that I – I would
indicate that the one thing that I am glad that still remained and that maybe I insisted on
that is that the last line but you may have a different interpretation. That it is still not a
contractual commitment and the way I used to protect myself from a contractual
commitment I did not always like to send letters to acknowledge this because they
sometimes have a perceived commitment. But you always – you would then caveat it

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by saying that no liability is created here. But what I – but what was happening at the
time I was negotiating as you will be – as you will be aware and I am not sure if we will
have time to go into that. I was negotiating the Optimum contract, I was negotiating the
Arnot Extension. I was negotiating the Empowerment of Angle American’s Portfolio. I
was negotiating the New Lager Portfolio. I was dealing with the war room and up to a
year prior to that I had direct – I had reporting – I was reporting to Kiren Maharaj and

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she was reporting before that time to Mr Dan Marikane and even Mr Darmis I would talk
to from time to time about things and I trusted all three of those people and if I had
taken a strong stance with the supplier they would have supported me if I had good
reason to and not accepted this kind of behaviour. I had already been told by Mr
Mboweni twice that he would replace me. The one was specific to this negotiation and
the other one was related to another incident. I cannot offhand remember what it was
related to and then I was also aware of the time I had heard it from internal sources and
from external sources that they – that there were two people lined up to take my
position and that they were looking for something to get rid of me. And I was not going
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to let something like this stand in the way of what was more important in my mind for
Eskom. Those other – those other significant contracts. So I probably would have
signed it to get it out the way so I can carry on with my business and I may not have
applied my mind properly but I still feel comfortable that it is not a contract and it was
an acknowledgement but yes it certainly does remove some of those protections that I
would normally have applied specifically because we were dealing with these suppliers.
ADV KATE HOFMEYR: Mr Bester were you shown this draft that had been received
from Tegeta at the time?
MR JOHANN ANDRIES BESTER: No. I would have been as gobsmacked as I am
now. It is the first time I saw it when you showed it to me last week.

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ADV KATE HOFMEYR: But then why did you reply the next day to change the letter in
the precise terms that Tegeta wanted?
MR JOHANN ANDRIES BESTER: I am sorry I am saying I never – I do not think I
would have seen the draft from drafted by Mr Nath.
ADV KATE HOFMEYR: I understand that but your letter.
MR JOHANN ANDRIES BESTER: But the second draft …

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ADV KATE HOFMEYR: But your letter.
MR JOHANN ANDRIES BESTER: Yes.
ADV KATE HOFMEYR: Of the following day which you will find at page 816 gives
Tegeta exactly what they wanted.
MR JOHANN ANDRIES BESTER: Yes.
ADV KATE HOFMEYR: So how does that occur?
MR JOHANN ANDRIES BESTER: I do not – I do not recall this specific incidents but I
cannot deny that I signed it. It does – it is my signature and it is probably – probably is.
CHAIRPERSON: Well maybe…
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MR JOHANN ANDRIES BESTER: I, I. I beg your pardon?
CHAIRPERSON: Oh just finish.
MR JOHANN ANDRIES BESTER: No no I do recall that were one or two incidences
where I had clearly frustrated them but I am not sure if it was because I saw it in the
Gupta’s leaks or someone had told me about that. But I cannot – I do – I must admit if I
was to try and specifically say exactly why I signed the second letter,

what the

conversation was what led to that I cannot recall.
CHAIRPERSON: Were you during this period being assisted by anybody in your team
or Ms Ntete in the drafting of the – of the letters that you were doing? You know in
other words was there somebody doing a draft for you and bringing to you and would
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look at it, if you are happy sign or if you are not happy amend it or replace it altogether.
MR JOHANN ANDRIES BESTER: Correct Chair yes. Specifically in this – with the
medium term mandates it would have been the norm that my direct reports would have
written letters on my behalf. I did not give them a full mandate to do that. Commercial
letters I wanted to still be from my office and my preference was that I would send it.
And yes I sometimes got the wording wrong it appears as in a letter yesterday that it

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gives the impression that I was there. But we tried to capture it always from my office
yes so Ms Ntete would have drafted this. She may have been assisted from legal. I
think at the time the lady I refer to quite often yesterday is my legal counsel I think she
had also resigned by then. So whether there was any legal assistance to Ayanda to
write the letter I cannot comment.
CHAIRPERSON: Then with special reference to the letter – your letter of the 19 th June
as well as that is the one at page 810 that we have dealt with as well as the one at
page 816. Do you know whether Ms Ntete assisted you in any way by way of drafts or
discussions with you as to what should go into those letters?
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MR JOHANN ANDRIES BESTER: It is – it is more than likely that she would have held
the pen and I would have approved it, yes. Or amended if I felt it needed to be
amended.
CHAIRPERSON: Would she have got to you a draft or would you have drafted it and
said to her what is your input and then she would bring it back to you or how would this
have happened?
MR JOHANN ANDRIES BESTER: She would normally draft it and if it was acceptable
I would sign it straight away and if not I would use my red pen that I was famou s for.
CHAIRPERSON: But you – do you have any recollection not as to what would have
happened but as to what actually happened in regard to the two letters or do you have

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no recollection?
MR JOHANN ANDRIES BESTER: Chair I do not recollect this instance.
CHAIRPERSON: Yes but to get drafts from her was normal in regard to letters that we
are dealing with this topic?
MR JOHANN ANDRIES BESTER: Yes Chair it – the – my team would have draft –
done most of my drafting for me at that level.

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CHAIRPERSON: Ja of course one would have expected that if she brought you a draft
that was significantly different from your letter of the 19 June the one at page 810.
MR JOHANN ANDRIES BESTER: Yes.
CHAIRPERSON: Subsequently if she brought you something that was significan tly
different or that sought to amend that letter.
MR JOHANN ANDRIES BESTER: Yes.
CHAIRPERSON: One would expect you to have raised the issue with her why are you
changing this and..
MR JOHANN ANDRIES BESTER: Yes.
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CHAIRPERSON: And do you remember whether you did ask her about that to the
extent that she may have prepared a draft for you in regard to the letter at page 816?
MR JOHANN ANDRIES BESTER: Chair I cannot honestly recollect that instance and
it would be yes it clearly would have been – would have been good to have been able
to recollect it yes. And clearly there should have been some discussion I honestly
cannot recollect.
CHAIRPERSON: Yes but you cannot remember any discussion?
MR JOHANN ANDRIES BESTER: Chair no it is about four years ago now.
CHAIRPERSON: Yes no, no that is fine. Did you think that there is a chance that you
might not – you might have not applied your mind to this and signed without

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appreciating the difference between or the effect of your letter of the 6 th of – at page
816 and your letter at page 810? Do you think you might not have applied your mind
when there was such a big difference between the two and you signed but maybe now
you look back and say I should not have signed without interrogating this?
MR JOHANN ANDRIES BESTER: Chair I would – I think I will always be reluctant to
say I did not apply my mind but I cannot honestly reflect on that I think it was too long

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ago. But as I tried to indicate I would have – I think in the frame of mind I was in at that
time I think I would have frustrated and I probably would have been wanting to deal with
it as quickly and as efficiently as possible so that I could get on with – with what I
perceived as more important work to be done. I – and the fact that I – that [indistinct]
was still included at the bottom which says Eskom – Eskom shall bear no liability for
any costs or liabilities incurred by the supplier on the basis of this letter that may have
given me sufficient comfort to sign the letter in any case even though I was not happy
that it is not a contract. To my mind it is not a contract whether it was used later
pretending to be a contract it is not contract I did not have the authority to sign and
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contractually agree. That delegation of authority sits with the divisio nal executive not
with me.
CHAIRPERSON: Well I can certainly understand your – your taking the view that that
last line provides protection and it may well be that it does. But I wonder whether your
inclusion of that provision in the letter, that part th at statement in the letter may have
come about because you could see that there could be problems with some of the
things that were in the letter and you just wanted to make sure that if there was trouble
Eskom could rely on that or you could rely on that to say well it was not something
intended to give rise to any liabilities.
JOHANN ANDRIES BESTER: Chair that was, there was a line I think that I used from

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previous correspondence. I had a couple of years earlier an instance where fortunately
there was no paper that because we had been negotiating with the supplier there was a
perception created with the supplier or an expectation, is probably a better word, an
expectation created with the supplier, because we had been negotiating with them for a
number months and there was an expectation that we would conclude a contract by a
certain time and then one of, we had a technical failure at one of our power stations.

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For example maybe it was Duvha, one of the Duvha units although they had a fixed
supply. It may have been an incident like that where one of the units blew up and we
did not coal. The coal supply plan changed. Until Eskom has actually signed the
agreement there is no liability agreed. So having learnt from that experience every
letter like this that we had a potential concern there. So, it almost tries to protect
similarly to what the earlier letter did by saying that to the extent that Eskom required
the coal. This also tries to protect that should the situation change should Eskom not
have money, should Eskom not have a requirement that there is still no liability created.
This is not a contract.
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CHAIRPERSON: Well Ms Hofmeyr may take the issue further, but nevertheless what
would remain troubling irrespective of that last, of that statement is simply that a
situation existed where somebody from outside of Eskom was a supplier or potential
supplier was dictating, a supplier was dictating to somebody at Eskom to say Eskom
must draft a letter along these lines to us that is worrying.
JOHANN ANDRIES BESTER: Absolutely unacceptable.
CHAIRPERSON: Yes.
JOHANN ANDRIES BESTER: Had I been aware of that.
CHAIRPERSON: Yes.
JOHANN ANDRIES BESTER: I cannot think what my reaction would have been.

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CHAIRPERSON: Yes, thank you. Ms Hofmeyr.
ADV KATE HOFMEYR:

Thank you Chair.

Just one or two follow up questions

Mr Bester what you have indicated to the Chair in your last answer was that what might
explain your willingness to sign these letters was an endeavour to deal with this
efficiently get it out of the way. I recall you were saying it was something of an irritation.
What I want to ask you in fairness is would not that most readily have been achieved by

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simply saying no thank you to this offer?
JOHANN ANDRIES BESTER: Yes.
ADV KATE HOFMEYR: And can I ask one other follow up question?

You have

emphasised the role that that last sentence on page 816 might have provided. Chair
just a point of clarification, those two letters 810 and 816.
CHAIRPERSON: Yes.
ADV KATE HOFMEYR: Were actually dated the 24 th and 25 June. They are a day
apart.
CHAIRPERSON: Oh.
10

ADV KATE HOFMEYR: They refer to the meeting of the 19 th .
CHAIRPERSON: Yes, okay yes.
ADV KATE HOFMEYR: But that is not without significance, because it is a day later.
CHAIRPERSON: Yes.
ADV KATE HOFMEYR: That the fundamental changes are made.
CHAIRPERSON: Yes.
ADV KATE HOFMEYR: So I just did want to clarify that.
CHAIRPERSON: No that is important, ja.
ADV KATE HOFMEYR: But Mr Bester I understand your evidence to be you were not
shown the draft that came from Tegeta, but I would like to ask you for your comment on

20

the reason that is given to Ms Mishanga by Mr Nath for these changes, because you
will see that at page 813 it is the email that he sends to her. He says:
“Thank you for the letter.”
That is the letter you wrote on the 24 th with those key protections for Eskom and what
he goes on to say is:
“However from our bankers’ purposes we need letter on the

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enclosed lines.”
Why would Tegeta’s banker’ purposes be relevant at all to Eskom?
JOHANN ANDRIES BESTER: I think it is the same line he used a couple of months
earlier.
ADV KATE HOFMEYR: Indeed.
JOHANN ANDRIES BESTER: Ja.
ADV KATE HOFMEYR: It does seem to be a trend.
JOHANN ANDRIES BESTER: Ja.
ADV KATE HOFMEYR: And would you confirm and give the same answer as you gave
10

previously it would not be of a concern to Eskom?
JOHANN ANDRIES BESTER:

Under normal circumstances not.

I cannot recall

whether Ayanda, what the motivation Ayanda; I absolutely cannot recall the motivation
Ayanda made to me in terms of changing that letter whether she conveyed the same to
me.
ADV KATE HOFMEYR: The reason why I wanted to emphasise that is would you
accept that the letter at 816 might be read by a banker despite that last line to be a
commitment to Eskom which could then be a further source of funding to Tegeta?
JOHANN ANDRIES BESTER: Yes, it would be unfortunate if they brought a lender
under that impression, yes.
20

ADV KATE HOFMEYR: Yes.
JOHANN ANDRIES BESTER: But ja I would hope that a smart banker would not lend
unless they had a contract.
ADV KATE HOFMEYR: But for the last sentence of the first paragraph of the letter that
they received from you on 25 June which reads:
“Following our meeting on 19 June 2015 Eskom wishes to

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record some of the material terms the parties agreed on.”
Do you accept that that might be interpreted to then contain a recordal of the agreed
terms?
JOHANN ANDRIES BESTER: Yes, but I do not wish to take liability for a decision a
bank made based on that.
ADV KATE HOFMEYR: No indeed. All I am asking you at the moment.
JOHANN ANDRIES BESTER: Yes.
ADV KATE HOFMEYR: Is how it might be interpreted by the bank.
JOHANN ANDRIES BESTER: Correct.
10

ADV KATE HOFMEYR: Thank you.
CHAIRPERSON: Let us go back to the two letters. The one at page 810 and the other
at page 816, but actually I want to focus on the letter at page 816 and the draft at page
814. We all accept, do we not that if you look at the three items on the letter at page
816 under Coal Specification Volumes and Contract Conditions except for that last
statement that you have pointed out, except for that do we all accept that those were
the terms requested in the draft at 814?
JOHANN ANDRIES BESTER: Yes, they appear to be the same. Chair they also
appear to be the same as the first letter I signed. So is [intervenes].
CHAIRPERSON: Sorry.

20

JOHANN ANDRIES BESTER: Chair I do agree that that wording is very similar to the
or almost word for word the same.
CHAIRPERSON: Yes.
JOHANN ANDRIES BESTER: The same as the letter signed on the 25 th.
CHAIRPERSON: Yes.
JOHANN ANDRIES BESTER: But it also appears to be the same as most of the

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wording on.
CHAIRPERSON: Yes, okay.
JOHANN ANDRIES BESTER: On the 24 th .
CHAIRPERSON: Okay. No that is fine, but we know what is different. Is it not? What
has been omitted?
JOHANN ANDRIES BESTER: Yes Chair.
CHAIRPERSON: Ja. Now if you look at what has been omitted on the draft letter at
page 814 which is also omitted on the letter at page 816. Would you not accept that
the probabilities would be that in preparing your letter at page 816 you would only have
10

written that letter omitting exactly what the draft at 814 wanted to be omitted. If either
Ms [indistinct] or somebody else had prepared the draft for you who was aware of the
draft from Tegeta or if you had seen the draft yourself.

Otherwise it would be

inexplicable how you would make those omissions that were made at page 814 when
at, in your letter of the 24 th you had written the letter the way you had. Would you
accept that the probabilities would either be that somebody who was aware of this draft
at 814 had prepared a draft for you or the draft for you?
JOHANN ANDRIES BESTER: Yes.
CHAIRPERSON: Or you had seen the draft at 814 yourself?
JOHANN ANDRIES BESTER: Yes, I would acknowledge the drafting of this letter very
20

much would reflect someone having seen, let us maybe refer to it as the, ja the drafting
on 814 that appears to have been drafted by Ravindra Nath. It appears to be the basis
on which the Eskom letter was prepared. The choice of language and the order of the
bullet points etcetera or, they are too close to be a coincidence.
CHAIRPERSON: Okay, thank you.
ADV KATE HOFMEYR: Thank you Chair. Mr Bester that concludes the aspects in

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relation to your involvement on the Brakfontein Contract. There are two further items I
propose to address with you in your evidence. The first is simply to deal with certain
findings that were made against you in the Fundudzi Report, because in fairness to you
I would like to put those to you for your comment and then Chair the second aspect
which I neglected to recall yesterday when we were thinking about the timing this
morning. There is an aspect of Mr Bester’s statement that deals with the Optimum
negotiations prior to the fourth addendum which are important and I propose to deal
whit those briefly thereafter.
CHAIRPERSON: That is fine.
10

ADV KATE HOFMEYR: Mr Bester you will find the Fundudzi Report in EXHIBIT U4 file
5. What I am going to propose in the interest of time and with your leav e Chair is that I
provide the references, but it is not essential to go to the actual pages.
CHAIRPERSON: Okay. That is fine.
ADV KATE HOFMEYR: I will simply summarise what those findings are and then ask
for Mr Bester’s comment.
CHAIRPERSON: That is fine.
ADV KATE HOFMEYR: But Mr Bester if you at any point would like me to give you the
page and to turn it up please feel free to tell me that. Mr Bester the Fundudzi Report is
as I read it makes three findings against you. The first of those is that yo ur conduct in

20

relation to the Brakfontein Coal Supply Agreement was irregular, because you allowed
Tegeta to dictate the terms of the Coal Supply Agreement to the benefit of Tegeta and
to the detriment of Eskom. Just for your reference Chair and Mr Bester you will find
that in that file 5 at 1187 paragraph 6.13.12.23, but I can contend to you that that is a
fairly verbatim recordal of what is said there.

Do you have a response to that

Mr Bester?

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JOHANN ANDRIES BESTER: Yes. If I only respond to that point I can say that I in my
mind I did everything in what I perceive in my power to put everything in place to
number one, initially prevent the contract from even starting negotiations with our team.
Well not the contract, but the supplier and then later on to try and put all the provisions
that Eskom required to protect itself in there. I may have in the course of time with the
constant pushing and as reflected in the last two letters it may appear as if I went soft
on them, yes but it was not the intention to give them what they wanted.
ADV KATE HOFMEYR: I will come back to that in a moment. I would in fairness to
you also like to just follow up a few other aspects of what we will submit in due course
10

your evidence has presented in order to give you an o pportunity to comment on those.
As we read your evidence Mr Bester what it does show is that Tegeta secured a 10
year Coal Supply Agreement in a situation in which on your evidence a five year
agreement with an option for another five years would have been in the interest of
Eskom. Do you accept that?
JOHANN ANDRIES BESTER: It would have been a better situation for Eskom, yes.
ADV KATE HOFMEYR: Thank you. The second is that Tegeta was allowed to proceed
with the contract despite a critical condition precedent that would have, which the
non-satisfaction of which would have resulted in no agreement coming to be operative
non the less continuing. Do you accept that?

20

JOHANN ANDRIES BESTER: I do.
ADV KATE HOFMEYR: And do you accept that Tegeta received the benefit of no one
following up on that condition precedent?
JOHANN ANDRIES BESTER: Yes, I do agree on that.
ADV KATE HOFMEYR: And then the third is that Tegeta managed to dictate the terms
of a further extension of the agreement on terms that were favo urable to its bankers

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and less favourable to Eskom?
JOHANN ANDRIES BESTER: Yes.
ADV KATE HOFMEYR: Thank you. Mr Bester the second finding that was made
against you in the Fundudzi Report, I hesitate to call it a finding because it is actually
just a speculation on the part of the author of the Fundudzi Report, is that you may
have received gratification for changing the conditions of the Coal Supply Agreement.
Can you have, could we please have your response to that?
JOHANN ANDRIES BESTER: No and think if I had why would I have resigned from
Eskom? I think I would have been in a good place. So the answer is no.
10

ADV KATE HOFMEYR: Thank you and then the third is that you breached Section 34
of the Prevention of Corruption Act by not reporting the corruption that was evident to
have occurred in this contract. What is your comment on that?
JOHANN ANDRIES BESTER: My comment is that in my mind the contract, there was,
the contract in itself was not, I am not sure the word you used. It was not fraudulent or.
ADV KATE HOFMEYR: Corrupt.
JOHANN ANDRIES BESTER: Corrupt.
ADV KATE HOFMEYR: Do you continue to hold that view now given everything that
has been presented in the evidence at this Commission about that contract?
JOHANN ANDRIES BESTER:

20

I continue to hold the view that the intention, my

intention was not corrupt and I may have not followed up on those specific conditions,
but there were processes in place that should have ensured that that happened. It, yes
and then in particular what should have happened is that that if that contract had been
managed and you have been through that in the previous few days, had that contract
been managed as it was signed by the provision that that, that the burn test had not
been done for the blend. The coal qualities and the price and the delivery mechanisms

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everything else had that been contractually performed on there should not have been
any reason for fraud to be committed or one cannot conclude that there was fraud
committed.
ADV KATE HOFMEYR: If it had been implemented in accordance with its terms?
JOHANN ANDRIES BESTER: Yes.
ADV KATE HOFMEYR: Thank you Chair. I propose to move to the Optimum aspects
unless there are further issues.
CHAIRPERSON: Before you do that is it possible or how possible is it Mr Bester that in
regard to that letter at page 816 that we looked at earlier what are the probabilities that
10

at that stage with the threats to your job that you told me about and everything that was
happening at the time around this issue and other issues what are the probabilities that
you may have reached a point where you wanted these people to so to speak leave you
alone, but you wanted to make sure that by putting that statement that there would as
far as you are concerned be no liability for Eskom, but maybe they would think that they
have got what they wanted?
JOHANN ANDRIES BESTER: I am not sure I understand the question 100 percent.
Yes, it was the intention, you know, in hindsight I may have been, may have
overthought my own ability to outplay or outmanoeuvre. It was my intention not to
aggravate the situation.

20

I was concerned about obviously losing my job.

I was

relatively comfortable that I would find employment fairly quickly after that. So it was
not employment that I was worried about. I actually whether you believe it or not, I did
feel that I had far important things to do and it was a sad day for me. Sorry, I need to
compose myself.
CHAIRPERSON: Okay. No, no that is fine.
JOHANN ANDRIES BESTER: Sorry Chair.

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CHAIRPERSON: If you want us to take five minutes we can take five minutes.
JOHANN ANDRIES BESTER: No, no it is fine. I would rather continue Chair.
CHAIRPERSON: Hm.
JOHANN ANDRIES BESTER: There still is a lot to be done. I dedicated my five years
to Eskom and I have sacrificed and, okay let us take five minutes.
CHAIRPERSON: Well I will take five minutes. We will take five minutes. We will take
five minutes. Let us adjourn for five minutes.
REGISTRAR: All rise.
INQUIRY ADJOURNS
10

INQUIRY RESUMES
CHAIRPERSON: Mr Bester how are you feeling?
MR JOHANN ANDRIES BESTER: I think I’ve composed myself Chair.
CHAIRPERSON: Okay, I just want to say this to you and I may have said it yesterday
already, I am interested in knowing and hearing about whatever pain people may have
suffered as a result of conduct that may be part of State Capture, may be part of
corruption in general in Government Departments and parastatals, I do want to hear
about that because that’s important and I think the nation needs to know what suffering
people may have gone through as a result of these things so I just want you to know
that I am interested in your sharing that with the Commission, if you are able to.

20

MR JOHANN ANDRIES BESTER: Yes thank you Chair.
CHAIRPERSON: Thank you.
MR JOHANN ANDRIES BESTER: So even though I had been at Eskom probably not
as long as some of the colleagues I referred to such as Ms Maharaj and Mr Brian
Damas, Mr Dan Marikani who I reported to, who initially appointed me, he was also only
there for a relatively short period, but these are people that I could look up to, that I

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could trust and that supported me when I wanted to do things like renegotiate the
Optimum contract, when I wanted to renegotiate the Medupi contract with Exxaro, when
they had been removed or left I definitely didn’t have someone in Mr Mboweni that I
could confide in, he didn’t give me guidance, he wouldn’t give me guidance and I
couldn’t, it was clear that I couldn’t trust him. I knew I couldn’t trust Mr Koko, he was
Mr Mboweni’s direct report and it was clear that my – that Ayanda was being influenced
and put pressure on from that – from the Executive, going over me, it was clear that
they wanted to replace me. I think at the time I had a massive workload but I was
prepared to shoulder that. Even the position I have now the company approached me
10

two years prior to that, I was always comfortable that I had somewhere to go but I was
more passionate and I think I picked up some of that passion from some of the good
colleagues at Eskom.
Sorry, it’s just the tragedy what happened to some of the people. So ja, as I
said there came a point when I think the last straw came when I still thought I could
maybe make a difference, I could ...
CHAIRPERSON: You can drink some water as well.
MR JOHANN ANDRIES BESTER: I thought I could still make a difference, and there’s
a lot of important work and there is a train coming, I mean when I left Eskom had ten
long-term supply contracts, twenty short-term supply contracts, it’s enough work for

20

anybody in a day. A lot of the – you may be aware and some people have told you, and
Mr Ephron even spoke a little bit about that, the Tide Collieries, those collieries where
the coal comes across the conveyer belts, especially the Cost Plus Mines, they’re
important for Eskom’s bottom line, that coal tends to be the cheapest coal. When
Eskom doesn’t continue investing in those contracts, and there was a – ever since I
joined Eskom the two power stations that were being built and the Ingula Pump Storage

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Scheme every single bit of money, and this is my perception, the accountants at Eskom
may say I’m a little bit wrong here, it’s my perception that all the cash that Eskom had
went on those three projects. We were always told to make do Cost Plus Mines, those
volumes kept dropping and I kept having to replace them from short-term contracts.
Those short-term contracts come at a high price, number one, and the delivery cost
adds another 30% onto that cost, so you are not doing what you should be doing for
Eskom.
About a year before I resigned I think it was towards the end of 2014 I wrote
a paper to the Board after having got several things in place, supported by my team,
10

supported by Finance, supported by Coal Planning, and a number of other clever guys
in the Primary Energy Department, we wrote a report that we wanted to table to the
Board that if Eskom didn’t spend R25billion over the next five years at the Cost Plus
Mines that the cost of not doing that would be R92billion. Mr Mboweni signed that
report but Mr Koko refused to sign it, it never reached the Board.
So those are the kind of things that started frustrating me. By – as you
heard by Dan Mashigo’s accounts now has 40 medium term supply contracts, and to
my knowledge when I left Eskom was receiving about 20% of its coal fro m Medium
Term Contracts, in other words delivered by road or rail. It is now receiving 40% of its
coal on road or rail and that adds an immense cost burden to Eskom.

20

So I didn’t only – I wasn’t really that much, in all honesty I wasn’t really that
much worried about my job, I wanted to get the job done and this Brakfontein contract
was actually just a frustration for me and I wanted to deal with it as efficiently and
effectively as I could without jeopardising my position because I would quite easily, the y
would quite easily replace me with somebody else, that would not – I would maintain
that would not have his eye on the ball, would potentially just be there at the behest of

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outside parties, and not be focused on achieving the long-term strategy that Eskom still
needs to actually implement to this day.
Thank you.
CHAIRPERSON: Thank you.
ADV KATE HOFMEYR:

Mr Bester thank you for that. I would like to move to your

involvement in the Optimum negotiations. You will find that in your statement in Exhibi t
U4 File 3, and if you turn to page 16 of that file you will see where that discussion
starts, at paragraph 38. Chair we are in file 3 at page 16, one six.
CHAIRPERSON: Okay thank you.
10

ADV KATE HOFMEYR:

That is in Mr Bester’s statement and we pick it up at

paragraph 38 because that as I have it is where you commence your discussion of your
involvement in the Optimum negotiations. Mr Bester I would like to turn over the page
and just start at paragraph 40, because you give some introductory background , but
what I would like to understand from you is your view in the course of these
negotiations of Eskom’s responsibility to ensure the sustainability of mines like
Optimum as you have just described which were built adjacent to power stations and as
a consequence of which could feed coal to power stations without the additional
attendant costs of road and rail transport. Could you please just indicate to the Chair
what role that sustainability played in your approach to these negotiations?
20

MR JOHANN ANDRIES BESTER:

Chair the – I think until I arrived at Eskom there

was a – with many suppliers there was almost like a them and us relationship, it was
acrimonious at times I felt when I arrived there and I felt it wasn’t – it didn’t help always
fighting with your supplier, there were always these penalties and – yes but they are
there, you have to administer the contract, you have to keep your supplier honest
otherwise they will take advantage of that. But in this – but this was a particular

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problem, it is clear to me and anybody looking at the facts that the contract had good
intentions initially and I don’t want to go into the detail that Mr Clinton went into but the
international coal price had dropped I think to about 75 dollars a ton, the long -term
average for coal is about 95 dollars a ton, so then all export is making good money,
when it drops to about 75 dollars a ton they’re making money but they’re not
necessarily happy shareholders.
It was at this point that Mr Ephron started making noises about being
unhappy with his contract because at those prices and the way the contract was
structured it was exporting and it was supplying Eskom, so the price to Eskom was one
10

of the lowest priced contracts to Eskom, it was not the lowest but it was one of the
lowest priced contracts and from my knowledge, from what costs should be from the
underground section from a large mine like that they were a little bit higher than I
anticipated from the studies that were done subsequently it didn’t surprise me that
Optimum were talking about declaring a hardship, that the initial intent of the contract
was not at that stage being fulfilled, if I can put it that way. When the coal price
dropped even further it actually I think went close to 53 dollars a ton on an export bas is,
to such a point that even Glencore stopped, or Optimum stopped exporting, it didn’t
even make sense for them to export coal, then there was no cross -subsidy obviously
happening so they couldn’t cross-subsidise the cost of supplying Eskom’s coal.

20

There is one other, in fact there were two others, I am aware of one other
mine where that is happening, where the coal is actually being supplied to Eskom at
lower than the cost to produce it.
So this particular mine though is not part of a bigger company, so to sustain
losses, although Glencore is the major shareholder it had other shareholders and it
stands to reason that a company like that would eventually declare itself bankrupt so I

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wasn’t surprised when Mr Ephron told me that they would eventually, I think that it’s not
far from bankruptcy but would go into business rescue, so I think it was important for
me before it got to that stage and so what had happened is already Optimum had said
or Mr Ephron had said that they wanted to start that arbitration process which I think
was discussed. The arbitration process would be – would take a long time, something
as complex as this contract it could take the better part of a year, at least six months,
and it would take the same resources out of my department and the Primary Energy
Department, Legal etcetera, and cost, as it would be to accept that there was a problem
and to try and renegotiate a new contract.
10

I had another objective, this contract would expire, it’s not like some of the
other contracts where Eskom had an option etcetera, this contract would expire
December 31 2018, so it’s last day was 31 December 2018, yet the power station’s life
was from – would start shutting down from 2023 to 2025 if I remember correctly but in
that time frame, so I said to myself, and I probably engaged with Ms Maharaj as well,
she was still there when I initially wanted to approach Optimum. I said to her look if I
was Glencore or Optimum and we forced them to carry on supplying at R150 a ton we
can guess what’s going to happen on the 31 st of December 2018, they will tell us they
are no longer supplying us, they are no longer interested in supplying us or the
alternative was they would dictate the price at which we – so if we waited till that point

20

we would have negotiating leverage, they would be quite happy to charge us R600 a
ton or R900 a ton whatever they felt like, and if the relationship was really acrimonious
they might refuse to supply us coal, so let’s use this position and say we will come to
sort of a middle ground.
I think that’s maybe enough.
ADV KATE HOFMEYR:

Thank you, just a few follow up questions, you’ve indicated

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that at the time that these negotiations were embarked upon they were being paid
effectively R150 per ton, that was pursuant to the long-standing coal supply agreement,
is that correct.
MR JOHANN ANDRIES BESTER: Thereabouts yes.
ADV KATE HOFMEYR:

Thereabouts.

I think you record it as R154 in your

statement. The other fact I just want to get your comment on is at paragraph 40 at
page 17 because there you say in the second line it was clearly not sustainable if
Optimum continued to lose R60million to R100million per month. Am I to understand
that as being the consequence of being kept at a price of R154 per ton.
10

MR JOHANN ANDRIES BESTER: Yes and I used that range because that’s what was
verbally conveyed to me by Mr Ephron, we subsequently obviously checked those
numbers.
ADV KATE HOFMEYR:

Indeed. But that’s the background as I have it to why you

wanted to take this longer term approach to the negotiation, not allow it simply to come
to an end at the end of 2018 and propose a price that as I read your statement you
regard it as fair to ensure the sustainability of the mine and to secure an important
resource of coal to the power plant, is that an accurate summary?
MR JOHANN ANDRIES BESTER: Correct, and the word “fair” I need to clarify, so the
one thing, principle I made very clear to Mr Ephron and to Optimum is that whatever
20

price we agreed on there would be no margin, it’s not our problem that they bought the
mine two or three years earlier that they didn’t do their due diligence properly, that they
didn’t forecast the market properly, it’s not Eskom’s problem, however we wanted to
make sure that the mine kept its doors open, or its gates open so when we did our due
diligence on what their costs were it would be merely to cover their cost. They had a
contract miner in there and there was obviously operating costs and there may have

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been some debt, but there was no – Eskom would not pay a margin. As I mentioned
yesterday it was fair for us to pay you your cost plus a margin, this was not going to be
that case.
ADV KATE HOFMEYR:

And as I have it you proposed after detailed investigations

with your team a new price of R442 per ton, is that correct?
MR JOHANN ANDRIES BESTER: Yes it was really not much of a proposal, I think we
both knew that – I mean we both agreed that the financial model actually gave us that
number.
ADV KATE HOFMEYR:
10

And just explain to the Chair if you will how you justified,

when you sought to make this proposal to the executives of Eskom, how did you justify
an increase of R154 to R442 for this coal source.
MR JOHANN ANDRIES BESTER: Ja, so obviously the next answer that they would
have come from any executive, even at an executive level, even from my very next
superior would be what is – what are your alternatives and because we do, we
obviously procure coal and there was one other supplier already that was supplying and
(indistinct) mentioned that name a couple of days ago, like it was already supplying
some volumes to, so it’s possible to supply some of the volume on road, so we did quite
an extensive study, obviously not done by myself, but it was done by my colleagues
and as I mentioned we had quite a good database and we had a pretty good idea

20

where we could get coal, we did engage actually with potential suppliers and we
modelled that so there were a number of suppliers we could get coal from but we
wouldn’t be able to get the volume from and the price was going to be relatively similar,
some of the prices that were lower we wouldn’t get the volume from and some of the
more expensive suppliers, none of them would be able to reach the volume but there
was a second probably bigger problem there, and that is the practically of actually

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delivering into the Hendriena Power Station. This power station was built next to a
mine that was supposed to supply across a conveyer belt, so the stockyard is not
designed to take its full volume in by truck. When the truck goes into a stockyard, it’s
got drive somewhere, it’s got to tip its load over, it’s got to go over a weighbridge, you
can’t depending on the size of the stockyard you can’t allow maybe more than two or
three trucks on that stockyard if it’s very small because you get a traffic jam, as simple
as that.
The road infrastructure around Hendriena town was also not conducive for
road trucking. One of the things, I’ve got to be careful I don’t get emotional here again
10

because one of the things that putting more trucks on the road it does result in
statistically there is a loss of life. I think on average when I was at Eskom there were at
least six to twelve fatalities per annum as a result of the trucks on the road, I am not
sure what the situation is now, putting more trucks on the road is something that you
should avoid, even at all costs.
CHAIRPERSON: The fatalities how do they, how are they connected with the trucks on
the road, was it drivers, or people who were, workers who were on the trucks or was it
pedestrians, or how did it come about.
MR JOHANN ANDRIES BESTER:

It’s most often it would be other road users that

would be affected by Eskom’s coal trucking. Ja in my term there were two instances
20

where school children were killed.
CHAIRPERSON: Ja, okay.
ADV KATE HOFMEYR:

Mr Bester you’ve indicated that there were a series of factors

you took into account in order to justify this increased amount and as I understand your
evidence you will use the comparator well if we’re not going to get it from Optimum
what are the likely costs if we bring it in from outside and what I understand you to have

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traversed now is some of the implications of bringing it in from outside with a power
plant that’s not designed to receive coal other than by way of conveyer belt, is that
correct?
MR JOHANN ANDRIES BESTER: Correct the cost would have been fairly similar at
best if not more and there would have been other knock-on effects which you can’t
price in, the loss of life and the logistics nightmare.
ADV KATE HOFMEYR:

So as I understand yours statement you then did this work,

arrived at a figure of R442 per ton and you justified it with reference to this comparison,
well if we’re not going to take it from Optimum what are we likely to get it at from other
10

suppliers, is that correct?
MR JOHANN ANDRIES BESTER: Yes, and I think it’s maybe important to note at that
stage there was distrust between the parties, maybe just to give more confidence
around the figure, the mine had been exporting as well and it had been su pplying
Eskom and it’s very important to have separated those costs and for a long time one of
the reasons it took so long is we struggled to get information not an unwillingness
necessarily from Optimum but an ability to distinguish what are Eskom costs a nd what
are Optimum’s costs and I think they stopped supplying the export market roundabout
November so within a couple of months the audit firm that we were – well it wasn’t an
audit firm we appointed Basis Points Capital, it’s a relatively small consulta ncy and then

20

we also appointed Nedbank to assist us with that, just to – well it was to give our
executives the comfort that it had been done by reputable parties, so we were relatively
comfortable that that was the actual costs that Optimum was incurring and that they
were not making any margin. I think a lot of people were hoping that there would be a
golden wand that we would wave and there would be some magic fix and that there
would be some better option but I had been busy with this for a year and a half and

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there was really no other solution.
ADV KATE HOFMEYR:

And as I understand your statement you then presented this

to the Executive of Eskom, and can you tell us about that engagement?
MR JOHANN ANDRIES BESTER: Ja, so there are a couple of steps so the – I think it
would have been an Exco and then it goes to a Board level as most large companies
would, but even larger companies, you don’t go straight to the full Board, you go to a
Board Tender Committee, so it – something like that would normally have been able to
be approved by the Board Tender Committee, I made mention in my statement that I
wasn’t surprised that the Board Tender Committee didn’t approve it, they didn’t not
10

approve it but they felt that they wanted the full Board to be appraise d or the full Board
to make a decision on that matter, which also didn’t surprise me.
ADV KATE HOFMEYR:

If you turn to page 20 of your statement, the first paragraph

on that page actually begins over the page, it’s paragraph 46, but what I’m interested in
in that paragraph is the sentence towards the end of the first paragraph which reads:
“I pleaded with my leadership not to allow a 15million ton per annum mine
shut down, one of the largest in the country, probably in the top five biggest
coal mines in the Continent.”
What gave rise to your need to plead with your leadership about this aspect?
MR JOHANN ANDRIES BESTER: I would have to reflect on the exact timing of that
20

but I think it was at the time when Mr Molefe had just joined Eskom and the report had
just been – he had just withdrawn the report from the Board Agenda and so it may have
been the day after or he may have asked me to brief him, I can’t reflect exactly on the
date, but I remember my reference to that, I remember being in Mr Brian Molef e’s office
with Mr Vusi Mboweni and there was one other gentleman that I didn’t interact with that
much, but I think he was in the office of the CEO – I really went through this full

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argument with those gentlemen again and I really tried to convey to them that there was
really no other option and how important this mine is at the time. I wasn’t seeing and
you may be fully aware that there is not that much investment happening in the mining
industry in South Africa as we would like there to be, especially i n the coal industry a
number of suppliers or mining companies were holding back, they were waiting to see
how the new regulations would pan out. The coal price, I mean export coal prices were
also low, so it was not likely that we would see anybody ever opening at that time, point
in time it’s not likely that somebody is ever going open another 15million ton per annum
operation, nothing that size. I think it’s got five drag lines, it’s one of the – it used to be
10

one of the top performers, they’re in an area where the geological conditions are
different, they are one of the closest mines to Richards Bay so they have a cost
advantage there, so whoever owns the asset, provided they can mine that resource
efficiently, the coal resource isn’t as great as it used to be but it was a fantastic mine.
The other consideration I had which in hindsight I should not have conveyed,
and I don’t really recall if I conveyed it at that meeting or whether it was subsequently in
the private meeting with Mr Koko, where I conveyed to them that we were having
problems, and as I said it may have been to Mr Koko, my memory is maybe a little
vague on this and I have to refer to the affidavit but I think I also conveyed that the
mine is one of the closest other resources we have to Arnot Power Station, Arnot Power

20

Station would also be struggling with its own supply over the next couple of years, I was
trying to renegotiate a new contract with Arnot as well from their open cast section, and
that it would be effective to supply it from there, so instead of letting the mine shut
down, instead of forcing it to shut down it would end up in somebody else’s hands and
we would negotiate from a zero base and they would dictate the terms.
If we even – if they really didn’t want to reach an agreement with Glencore

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well then let’s buy the mine, you’ve heard big numbers Chair for Eskom to buy a mine
and pay R2.5billion, whatever the figure is we would have come up with, for Eskom to
spend R2.5billion on a - to secure its supply would not have been a bad judgment call
either in my mind.
ADV KATE HOFMEYR:

And what was Mr Molefe’s response to this argument that

you presented to him about continuing with Optimum at a more reasonable price?
MR JOHANN ANDRIES BESTER: I will have to refer to that, but I think I remember
the one thing he did say is we will build a railway line and I said to him it doesn’t make
sense to me, by the time you’ve finished building that the power station will be in its
10

shut down years.
ADV KATE HOFMEYR:

Just take us through I know these facts are well known to

you but did Mr Molefe agree with you that you should enter into negotiations for a
longer term contract at R442 a ton?
MR JOHANN ANDRIES BESTER:

Look the negotiations were concluded so no he

was clear that he did not want to agree to that.
ADV KATE HOFMEYR: And how did the railway line come up in that discussion?
MR JOHANN ANDRIES BESTER: So I said to him we had no alternative and I think it
was at the point when I explained to him it doesn’t matter, even if he wanted Plan B,
even if he wanted me to go and buy the coal for him for Eskom from medium term
20

suppliers if I managed to get ten different suppliers to – I can’t – I’m guessing at what
the figure would be, it would be maybe something like 800 to 1 000 tr ucks delivering
there every day. I told him it’s physically impossible. I myself do admit I have never
been to the mine, but I rely on my technical colleagues they told me the stockyard is too
small, there’s a sub-way that you need to drive through, there’s a particular point in
accessing the power station where only one truck can pass that section of road in one

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time, so that’s a congestion point.
There were an number of points that, so the size of the stockyard, the road
infrastructure around Hendriena town that would prevent you actually from practically
delivering the full power station burn on road, and then he said well we will build a
railway line, and I said to him Mr Molefe with all due respect by the time we’ve got the
EIA approved and the railway line built the power station will be in its shutdown years,
which would be 2023 to 2025 in my memory.
ADV KATE HOFMEYR:

Mr Bester has ...(intervention)

CHAIRPERSON: Sorry. That engagement that you had with Mr Molefe on this issue
10

was it an engagement which you felt was on the part of both of you in terms of which
were – both of you were looking at trying to find genuinely trying to find a solution to the
issue in terms of you raised arguments supporting your view. He dealt with them in a
rational way. You might have disagreed with him but the – he was putting across
rational arguments based on somebody who was genuinely looking at trying to find a
solution or is it something that you could – you cannot tell – you could not tell?
MR JOHANN ANDRIES BESTER: Maybe I should mention one other aspect. As I
said Mr Mboweni was there as well and everything Mr Molefe said he agreed with
wholeheartedly and I was the only body – I was the only one arguing the other point.
Strangely enough even though Mr Mboweni had supported my document to the board it

20

was as if he was not going to challenge Mr Molefe. So – but to get back to your
question Chair ja it is maybe not fair but to my mind the options – and there were not
many the options that Mr Molefe had put to me were not thought through to my mind
they were very quick responses to everything I said. They were not considered.
CHAIRPERSON: Yes, yes. But that is how far you can – you can go in terms of
describing his approach or attitude to the issue that is how far you can go you cannot

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go beyond that?
MR JOHANN ANDRIES BESTER: I cannot – yes I – it would be difficult to speculate
further.
CHAIRPERSON: Ja okay. No that is fine thank you.
ADV KATE HOFMEYR: You go on in your statement to record the response from
Glencore or let me be specific from Optimum to the rejection of the fourth addendum.
As I have it that was to counteroffer to supply the coal at R300.00 per tonne is that
correct?
MR JOHANN ANDRIES BESTER: Yes that is correct.
10

ADV KATE HOFMEYR:

We have gone through some of that evidence with Mr

Opperman and the documents attached to your affidavit on the score are actually also
annexures to his statement so I do not propose to go through them again. What I am
interested in was the interaction that you had with Mr Molefe after that counteroffer was
received from Optimum. You will find that at page 20 of your affidavit at paragraph 47.
What was Mr Molefe’s response to that counteroffer?
MR JOHANN ANDRIES BESTER:

I think the first part does not deal with the

counteroffer. Ja so the first part I mean it was fairly public and then – but maybe I just –
just summarise. So there was a counteroffer and it was copied to me. So I drafted a
response. I would be the one who would draft a response in any event. So I am trying
20

to think what the date was?
ADV KATE HOFMEYR: Well I can give you the reference. The counteroffer appears
at page 110 of that file and you will see that it is the letter from Optimum Coal Mine
dated the 30 June 2015.
MR JOHANN ANDRIES BESTER: Okay if it was June then I still would have been
quite busy. But that is the only thing I am trying to reflect on. So I drafted two letters.

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One was an outright rejection and one was an acceptance. And it was – I took it to Mr
Mboweni’s office for him to take to see if Mr Molefe was happy with the drafting.
Because at that stage the other thing that happened with Mr Molefe acting in that way
he basically took the negotiations out of my hands. It – and that is also the other
abnormality when you – he had elevated the negotiations to his level. Well maybe if
you have a big problem like this it should be. So those letters all would have to go from
– it was just customary to go from his office. So I drafted those letters and Mr Mboweni
I think it Mr Mboweni told me that I should not even acknowledge the letter.
ADV KATE HOFMEYR: You should not acknowledge it at all?
10

MR JOHANN ANDRIES BESTER: At all yes. I think that is what my paragraph says I
have not read it.
ADV KATE HOFMEYR: Indeed.
MR JOHANN ANDRIES BESTER: Ja.
ADV KATE HOFMEYR: Indeed. Your draft just for your reference is at page 114.
MR JOHANN ANDRIES BESTER: I only found the one yes. I did not find the other
one.
ADV KATE HOFMEYR: But are we to understand that those drafts were rejected and
you were told not to communicate in relation to the counteroffer?
MR JOHANN ANDRIES BESTER: Yes and my understanding is that at the time there

20

was no – there was no correspondence on that. There may have been a meeting
afterwards which I have heard about subsequently.
ADV KATE HOFMEYR: What did you make of the counteroffer? Would you have
accepted it?
MR JOHANN ANDRIES BESTER: Yes.
ADV KATE HOFMEYR: It was R140 odd less than what you were proposing.

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12 MARCH 2019 – DAY 64
MR JOHANN ANDRIES BESTER: Yes.
ADV KATE HOFMEYR: Eskom should pay was it not?
MR JOHANN ANDRIES BESTER:

Ja.

Look we would have had to do some

calculations so then maybe it is not that relevant. The one thing that I had included in
our negotiations is that post 2018 I still reserved the right for Eskom to go out on tender
and to try and find its own alternative coal. And if I reflect correctly on the letter without
having to – without going to it now specifically I think what Optimum had done there
they had reserved their – a price to supply post that period. So they almost did build in
a little bit of a claw back and when it is – I cannot remember now not having looked at
10

the letter recently whether they had the right to or whether there was a commitment.
ADV KATE HOFMEYR: Well we did go through it with Mr Opperman but it is a point of
some significance because it – we will submit bears out the reasonableness of the
counteroffer. The counteroffer comes in at R300,00 per tonne.
MR JOHANN ANDRIES BESTER: Yes
ADV KATE HOFMEYR: Which is about R140,00 off what you were proposing should
be paid.
MR JOHANN ANDRIES BESTER: Yes.
ADV KATE HOFMEYR: But in addition to that it allows this tender process to be
conducted.

20

MR JOHANN ANDRIES BESTER: Ja.
ADV KATE HOFMEYR: So the post 2018 Eskom can ensure that it has tested the
market.
MR JOHANN ANDRIES BESTER: Yes.
ADV KATE HOFMEYR: That it sees what price it could get there
MR JOHANN ANDRIES BESTER: Ja.

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12 MARCH 2019 – DAY 64
ADV KATE HOFMEYR: And all that Optimum retains is an option to meet the price.
MR JOHANN ANDRIES BESTER: So then it would absolutely …
ADV KATE HOFMEYR: So it absolutely protected Eskom.
MR JOHANN ANDRIES BESTER: Ja.
ADV KATE HOFMEYR: We submit in relation to testing the market.
MR JOHANN ANDRIES BESTER: And the – yes so I mean with not having looked at
the letter recently based on what you have conveyed Ms Hofmeyr I would say it is a no
brainer. We should have accepted that.
ADV KATE HOFMEYR:
10

Thank you.

Chair those are the aspects in relation to

Optimum that we wanted to traverse with Mr Bester unless there is anything else?
CHAIRPERSON: No. Are you otherwise done with him?
ADV KATE HOFMEYR: I am otherwise done and I will hand over to Mr Maleka for the
next witness.
CHAIRPERSON: Okay alright. And we can excuse Mr Bester now.
ADV KATE HOFMEYR: Indeed.
CHAIRPERSON: Okay. Mr Bester thank you very much for coming to give evidence.
You are excused and if a need arises for the commission to ask you to come back you
will be contacted.
MR JOHANN ANDRIES BESTER: Thank you Chair.

20

CHAIRPERSON: Thank you. Mr Maleka.
ADV VINCENT MALEKA SC: Chair I see it is ten – five past eleven.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: I wonder whether we could not take an earlier tea
adjournment and resume earlier than normal.
CHAIRPERSON: The tea might be not be ready.

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12 MARCH 2019 – DAY 64
ADV VINCENT MALEKA SC: Okay. Well let us use the commission’s resources.
CHAIRPERSON: That is fine use the time that we have.
ADV VINCENT MALEKA SC: Chair there are some housekeeping matters that I would
like to bring to your attention and seek your direction.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: By now we are running a bit late in terms of the witness
scheduled.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: There are three witnesses who are here present whose
10

evidence we need to deal with.
CHAIRPERSON: Ja.
ADV VINCENT MALEKA SC: It is unlikely that we will deal with all three of them today.
Subject to your direction we have arranged with the last of the three to be excused and
return tomorrow.
CHAIRPERSON: Okay.
ADV VINCENT MALEKA SC: And that is Doctor Ramontja.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: So if it suits you Chair will ask him to go and do other
better things in his life.

20

CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: And come back tomorrow.
CHAIRPERSON: No that is in order.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: That is in order.
ADV VINCENT MALEKA SC: That leaves two remaining witnesses the first is Mr

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Sinton.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: He is here and he will be able to testify. The second is
Mr Pers Marsden.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: Supported by his colleague who at the time was the cobusiness rescue practitioner for Optimum Coal?
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: He comes all the way from Canada in order to assist the
10

commission.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: And he has constraints of time he would like to complete
his evidence by tomorrow so that he gets back to Canada.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: I am fairly confident that we should be able to complete
his evidence tomorrow.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: Subject to other more important intervening issues Chair
around tomorrow.

20

CHAIRPERSON: YEs.
ADV VINCENT MALEKA SC: But we would ask you to allow his evidence to be
completed immediately after Mr Sinton’s – Sinton completes his evidence?
CHAIRPERSON: Okay no that – what is your estimate of how long Mr Sinton…
ADV VINCENT MALEKA SC: I would like to complete Mr Sinton by three o’clock this
afternoon.

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CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: And his evidence is quite important.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: And it has attracted all manner of attention some of
which I will bring to your attention before I start. That leaves…
CHAIRPERSON: Yes. And Mr – and the other two witnesses are likely to take how
long each more or less?
ADV VINCENT MALEKA SC: Only one of them will testify Chair the other has made a
confirmatra affidavit to confirm matters that are referenced.
10

CHAIRPERSON: Okay.
ADV VINCENT MALEKA SC: To his participation in the BR process.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: Yes. So I estimate that if I were to start with Mr Piers
Marsden today
CHAIRPERSON: Ja.
ADV VINCENT MALEKA SC: At around three – three thirty.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: I should be able to conclude his evidence tomorrow by
tea time.

20

CHAIRPERSON: Okay, okay. No that is fine. I think that is in order. Ja the witness
that you thought maybe should be released for today and come back tomorrow is
released and must come back tomorrow.
ADV VINCENT MALEKA SC: Thank you very much Chair I will then indicate to my
colleagues that they can tell Doctor Ramontja that he is released for now.
CHAIRPERSON: Ja. Okay.

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ADV VINCENT MALEKA SC: Chair before I start with Mr Sinton well I see he is ready
here.
CHAIRPERSON: Well I think he must go to – he must [indistinct] as well go and sit
there he is not unfamiliar with that place. He has given evidence before.
ADV VINCENT MALEKA SC: Ja you can give it to him. Chair we propose to deal with
Mr Sinton’s evidence through a set of documentation which was previously handed up
to you.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: It is a file which is marked U10.
10

CHAIRPERSON: It is marked U?
ADV VINCENT MALEKA SC: U10 and you will see just below U10 it is marked IHS
Sinton. Chair if you do not have it readily available we have an extra copy.
CHAIRPERSON: Well I think the one I found should be the one. It is marked Volume
U10 and then it is written his initials and his surname.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: It is supposed to be Exhibit what?
ADV VINCENT MALEKA SC: U10.
CHAIRPERSON: U10?
ADV VINCENT MALEKA SC: Yes.

20

CHAIRPERSON: Can I ask for the umpteenth time will the legal team make sure it is
written Exhibit number.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: U10 and all the others because when I look for them that is what I
look for.
ADV VINCENT MALEKA SC: Yes.

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12 MARCH 2019 – DAY 64
CHAIRPERSON: What the exhibit number is.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: I am going to mark this one Exhibit U10.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: That is on the spine. If they can just write that on the spine it will
make things easier for me.
ADV VINCENT MALEKA SC: Chair I feel sabotaged because I have conveyed your
requirements.
CHAIRPERSON: Yes.
10

ADV VINCENT MALEKA SC: Umpteen time to the staff.
CHAIRPERSON: Ja.
ADV VINCENT MALEKA SC: And at some point I..
CHAIRPERSON: You threatened something?
ADV VINCENT MALEKA SC: I threatened something which did not endear me.
CHAIRPERSON: Ja.
ADV VINCENT MALEKA SC: But I really would take it back again.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: To make sure that your requirements are met.
CHAIRPERSON: Yes please I mean even among those that are here apart from this

20

one I see another one that is market Volume 5 but it is on the spine but it is not marked
what exhibit number it is.
ADV VINCENT MALEKA SC: Yes. I believe that [Rivedan Stimela] is here and he
would intervene on my behalf.
CHAIRPERSON: Ja. Okay alright.
ADV VINCENT MALEKA SC: Yes.

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12 MARCH 2019 – DAY 64
CHAIRPERSON: Thank you.
ADV VINCENT MALEKA SC:

What we have discovered as we read through the

statement and annexures of Mr Sinton’s file Exhibit U10 is that there was one document
or page that was missing and we asked him to bring it today and the page is going to
become important when we deal with his evidence concerning what he was told
regarding the relationship between Regiments on the one hand and McKinsey on the
other. So he has given us that page Chair and I have taken the liberty of marking it as
page 107A which will follow 107.
CHAIRPERSON: Okay.
10

ADV VINCENT MALEKA SC: And secondly Chair if you go to that file at page 143.
CHAIRPERSON: What page?
ADV VINCENT MALEKA SC: 143.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: You will see that there is Exhibit C there.
CHAIRPERSON: Yes 143 I have got ja.
ADV VINCENT MALEKA SC: Chair I have tried even with my magnified glasses to
read that document I failed and I asked Mr Sinton to see whether or not he cannot get
an A3 size copy of that document. He has kindly done so Chair.
CHAIRPERSON: Okay.

20

ADV VINCENT MALEKA SC: And I have marked it page 143 Exhibit C.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: And I would ask your permission to place both these
documents in your file?
CHAIRPERSON: Yes thank you very much.
ADV VINCENT MALEKA SC: And Chair that document is going to become important

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as and when Mr Sinton tracks and traces various transactions and money flow.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: Relating to accounts that he had some concerns with so
I would ask you to place Exhibit C A3 size next to Exhibit 3 A4 size.
CHAIRPERSON: Just hang on one second. Let me put these where they belong.
Page 107A should come…
ADV VINCENT MALEKA SC: Immediately before 10 – well immediately after 107.
CHAIRPERSON: Immediately after 107?
ADV VINCENT MALEKA SC: Yes. Chair you will see page 107 at the bottom is
10

CHAIRPERSON: Marked 3.
ADV VINCENT MALEKA SC: Internally paginated 3
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: And then if you go to the next page.
CHAIRPERSON: It is marked 5.
ADV VINCENT MALEKA SC: 5 so there is page 4 missing.
CHAIRPERSON: Okay. Thank you.
ADV VINCENT MALEKA SC: And Chair whilst you are there can I ask you to make a
note if not highlighting that section of 107A the heading Regiment To Essa.
CHAIRPERSON: Yes thank you.

20

ADV VINCENT MALEKA SC: We will come back to it in due course.
CHAIRPERSON: Okay thank you. Probably we can take the tea adjournment now or
are you…
ADV VINCENT MALEKA SC: Chair can I complete the documentation.
CHAIRPERSON: Ja.
ADV VINCENT MALEKA SC: Before we start I think it will make it much easier and

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convenient.
CHAIRPERSON: Yes, yes okay.
ADV VINCENT MALEKA SC: Chair we have given several notices to various persons
who are or may be implicated by the evidence of Mr Sinton. They all come down to
about 19 at this stage the list may grow or not.
CHAIRPERSON: Yes, yes.
ADV VINCENT MALEKA SC: We have not yet disclosed or included the notices in
your file.
CHAIRPERSON: Yes.
10

ADV VINCENT MALEKA SC: In line with your previous directions.
CHAIRPERSON: Ja.
ADV VINCENT MALEKA SC: But I have a copy here in case anything arises from the
notices.
CHAIRPERSON: Yes. Ja no that is fine.
ADV VINCENT MALEKA SC: We have only received two responses. The one is from
Mckinsey. We have communicated their stance to you in chambers and therefore
nothing further tends from what they had indicated in that response.
CHAIRPERSON: Ja.
ADV VINCENT MALEKA SC: I shall not deal with that response any further except to

20

say that their attorneys are present here.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: And if there is anything that arising and they want to
take up with Mr Sinton.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: He is here. We would simply ask them to comply with

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the rules to the extent possible.
CHAIRPERSON: Ja. Ja.
ADV VINCENT MALEKA SC: The next set of response Chair comes from Regiment.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: And I am afraid here I have to give you a bundle of
documents. Chair can I ask for your Registrar’s permission to give you two sets of
documents. The one is the response from Regiment and the commission’s reply
thereto.
CHAIRPERSON: Yes.
10

ADV VINCENT MALEKA SC: The next is a copy of the Financial Intelligence Centre
Act and I will indicate to you where that legislation becomes important. But first thing
first can I take you through the response?
CHAIRPERSON: I will tell you well I think we must take the break.
ADV VINCENT MALEKA SC: Okay Chair.
CHAIRPERSON: Where you can take me through when we resume.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: I see if we break at exactly quarter past it makes it easier to say we
come back at half past.
ADV VINCENT MALEKA SC: Yes my apologies Chair, my apologies.

20

CHAIRPERSON: If we break at 17 minutes past it becomes a problem.
ADV VINCENT MALEKA SC: No I have…
CHAIRPERSON: Because if I say half past it is less than the time and there are people
who need some comfort break.
ADV VINCENT MALEKA SC: I really apologise.
CHAIRPERSON: Might – okay we will take the tea break and resume at twenty five to.

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ADV VINCENT MALEKA SC: Thank you Chair.
CHAIRPERSON: We adjourn.
INQUIRY ADJOURNS
INQUIRY RESUMES
CHAIRPERSON: Yes Mr Maleka.
ADV VINCENT MALEKA SC: Chair thank you very much. Before the tea break I had
handed up to you correspondence.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC:
10

Chair we bring to your attention the body of the

correspondence just to keep you up to speed about where things are in relation to
Regiment.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC:

Unfortunately our administration has arranged the

correspondence in reverse order. I would ask you Chair to go to the last tagged
document. I have taken the liberty of putting the post-it stickers, the last one you will
see it is a Notice under Rule 33.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: To Regiment.
CHAIRPERSON: Yes.
20

ADV VINCENT MALEKA SC:

In response to that notice Chair the attorneys of

Regiment wrote a letter to the Commission dated 9 March 2019. You will find it as a
second last tagged document.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: All I wish to bring to your attention in that regard Chair is
their confirmation in paragraph 2 of that letter that they received the notice and

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paragraph 3 they indicated that they had previously made themselves available to
cooperate with the Commission and make statements to the Commission and that their
position in that regard has not changed.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: And then Chair if you go to page 2 paragraph 8 of that
letter you will see that they report the following:
“We accordingly request that the publication and presentation
of Mr Sinton’s evidence be postponed for 30 days so as to
afford our client an opportunity to make its application and/or
10

and the Commission to rule thereon and to afford our client an
opportunity to consult with counsel and prepare for crossexamination.”
Of course the Commission via the Legal Team responded to that letter and the
response is dated 11 March 2019. It is the document which is tagged in the middle of
that bundle and the sum total of the Commission’s response via Mr Pedlar was that we
do not accept that the evidence of Mr Sinton be postponed and what followed thereafter
Chair is the document which is the first in the bundle. It is dated 12 March 2019. Sorry
is the one before, 12 March 2019. The letter from the same attorneys of Regiment and
you will see Chair in paragraph 2 they accept that the Commission had informed them

20

that they are entitled to make an application for cross.
CHAIRPERSON: Which one now? Not the last one, not the top one?
ADV VINCENT MALEKA SC: The.
CHAIRPERSON: Second top?
ADV VINCENT MALEKA SC: The second top.
CHAIRPERSON: Okay.

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ADV VINCENT MALEKA SC: Where they confirm what the Commission told them, but
of importance Chair is paragraph 3 where they say we appreciate the need to do so
and our letter was not meant to circumvent due process, but rather to avoid our client
the opportunity to prepare the requisite application and in paragraph 4 the note that
Mr Sinton’s evidence will proceed today.
CHAIRPERSON: I am sorry Mr Maleka. Let us start again. You have four dividers
here?
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: If you start from the top one.
10

ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: Which one are you on right now?
ADV VINCENT MALEKA SC: The second one. The first.
CHAIRPERSON:

Is that the letter from the Commission to Smit Sewgoolam

Incorporated?
ADV VINCENT MALEKA SC:

No, the letter from Smit Sewgoolam Incorporated

Attorneys dated 12 March 2019.
CHAIRPERSON: Well I see one dated 9 March.
ADV VINCENT MALEKA SC:

That we have dealt with.

It was a request for a

postponement for 30 days. From the top Chair you could page two pages.
20

CHAIRPERSON: Oh, okay. Okay, I found it. Thank you. Yes, you were referring to
paragraph 3 of the letter?
ADV VINCENT MALEKA SC:

Yes.

You will see there that their request for

postponement was not meant to circumvent due process, but afford their client an
opportunity to prepare for the applications which it may be advised to make in terms of
the rules and if you go to page 2 on paragraph 5 you will see the requested

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confirmation of when Mr Sinton’s evidence will be presented.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: And then the Commission did inform them about those
requests in terms of the letter of 12 March 2019.
CHAIRPERSON: Huh-uh.
ADV VINCENT MALEKA SC: Where they were told that Mr Sinton’s evidence would
proceed.
CHAIRPERSON: Huh-uh.
ADV VINCENT MALEKA SC:
10

And they are entitled to get the statement and a

transcript of his evidence after he testified. Chair we have brought your attention to
these matters simply to show that there is no basis to postpone Mr Sinton’s evidence.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: And we will therefore with your leave proceed to present
that evidence before you.
CHAIRPERSON: Ja. That is in order.
ADV VINCENT MALEKA SC: The next issue Chair is I have presented a copy of the
Financial Intelligence Centre Act 38 of 2001 before you and I would like to take you to
some of the provisions and explain why it is important. Chair the first is page 18 of that
bundle where you will find Sections 20A, 21 and 21A.

20

CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: These provisions impose obligations on accountable
institutions and other persons who conduct business such as Standard Bank to ensure
firstly in terms of Section 20A that they do not deal with fictitious persons and in terms
of 21 there is an obligation for them to ensure that they know who their clients are and
they can verify their identity and also verify the sources of funds in the accounts opened

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by their clients and they have to do so in terms of a Risk Management and Compliance
Program. The Act provides for the elementary aspects of that Compliance Program in a
section which I will get to you Chair. I just think it is, it has escaped me now, but I will
get it to you Chair and then the next section that I would like to bring to your attention
Chair is Section 21B on page 19 which impose additional obligations on the part of the
accountable body to take additional due diligence matters relating to incorporated
entities such as companies or unincorporated entities such as trusts and partnership
and the obvious need for that provision Chair is clear that an entity that is required to
report ought not to take a defence that it was dealing with a legal person and did not
10

know who was behind that cooperate veil and Chair we would therefore suggest that it
was proper and right for Mr Sinton to report the transactions around which he had
suspicion and on which he is going to testify by reason amongst others of this provision
and then Chair the next provision is the obligation to report suspicious or unusual
transactions. You will get that in Section 29 on page 29 of the Legislation. The
obligation is wide Chair. It includes amongst others in terms of Section 29(1)(A) the
obligation to report transaction around which you conclude or have a reasonable
suspicion that funds in the account in your bank constitutes proceeds of unlawful
activities and then C is important because it is the one that Mr Sinton appears to have
relied on that is the obligation to report money which may constitute money laundering

20

or for the purposes of facilitating money laundering and Chair the next section which is
important is the Protection of Confidential Information because all of these things you
report them to the Financial Intelligence Centre and you do so in terms of the various
reports which are called STRs, Suspicious Transaction Reports, and I will in a moment
indicate to you why that is important and as you report them you do confidentially to
protect the identity and further details of the person on whom you report and the centre

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itself has an obligation to protect the confidentiality of that information, but the
confidentiality and protection of the information concerned it is not without exceptions.
Section 41 provides for exceptions and you will find Section 41 at page 37 and one of
the exceptions Chair is in paragraph D of that section where the information is sought
for legal proceedings including any proceedings before a Judge in chambers. We
would submit that that is broad enough to include proceedings such as the present and
it is for that reason that we by way of subpoena secured the presence of Mr Sinton
before you and we called upon him not only to provide information by way of affidavit,
but also to produce several suspicious transaction reports which Standard Bank may
10

have filed in regard to those transactions that he had some suspicions on. He has
done so Chair and has produced a bundle of STRs under a subpoena, but they have
been produced and they have been addressed to you. We have not looked at them,
because we do not want to violate any confidentiality protection. We will only do so if
you give us permission for us to look at them. For now Chair I merely want to record
that the reports are here and we would ask for your direction that we begin to look at
them.
CHAIRPERSON: Well I will need to apply my mind.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: To them. Of course a question that arises in relation to Section 41

20

whether proceedings such as this are legal proceedings.
ADV VINCENT MALEKA SC: Oh yes Chair.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: We submit that they are.
CHAIRPERSON: And it may well be that you are right and they are legal proceedings,
but one might just need to reflect.

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ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: On that.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: In part maybe because; so one might just need to reflect maybe on
that, but I; one would, the one approach would be to take the view that even though a
Commission is not a Court of Law. It is the function of a Commission such as this is
such as to place its proceedings within the ambit of that term.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON:
10

But it may well be that there may be an argument that its

proceedings are not legal proceedings in a certain sense and administrative
proceedings.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: Or something along those lines.
ADV VINCENT MALEKA SC: Chair you will see that.
CHAIRPERSON: Hm.
ADV VINCENT MALEKA SC: The Act does not define legal proceedings.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: There is no definition.
CHAIRPERSON: Yes.

20

ADV VINCENT MALEKA SC: And therefore it will boil down to.
CHAIRPERSON: Interpretation.
ADV VINCENT MALEKA SC: Interpretation.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: But on the interpretation we contend.
CHAIRPERSON: Hm.

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12 MARCH 2019 – DAY 64
ADV VINCENT MALEKA SC: The Commission is a product of the Commissions Act
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: Which gives the Commission and especially you Chair.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: The power to subpoena persons.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: By means of a subpoena properly issued under your
direction.
CHAIRPERSON: Yes.
10

ADV VINCENT MALEKA SC: And a subpoena is a legal process.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC:

And that process has been issued to secure the

presence of Mr Sinton here.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: And we would therefore submit that the Commission
processes such as these.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: Are legal proceedings within the broad definition or
understanding of that.
20

CHAIRPERSON: Yes and the Commissions Act says something to the effect that the
bringing of witnesses to appear before the Commission happens or is required to
happen following the same process as is used in the High Court. I think there is a
provision to that effect.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: So that may support that submission.

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ADV VINCENT MALEKA SC: Yes and Chair my colleagues.
CHAIRPERSON: Hm.
ADV VINCENT MALEKA SC: Especially Ms Hofmeyr wants me to make another point.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: In order to justify the production of these reports.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: May I ask you to go to Section 41 again?
CHAIRPERSON: Section 1?
ADV VINCENT MALEKA SC: 4-1.
10

CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: On page 37.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: You will see that another exception is where a person
acts within the scope of his or her powers and duties in terms of any legislation.
CHAIRPERSON: What paragraph of 41 is that?
ADV VINCENT MALEKA SC: 41, paragraph A.
CHAIRPERSON: “No person may disclose confidential information held by
or obtained from the centre except within the scope of that
persons powers and duties in terms of any legislation. No

20

person may disclose confidential information held by or
obtained from the centre except within the scope of that powers
and duties in terms of any legislation.”
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: Now the no person in this case would be Mr Sinton.
ADV VINCENT MALEKA SC: Sinton.

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12 MARCH 2019 – DAY 64
CHAIRPERSON: Ja, Sinton.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: So it would have to be that he makes the disclosure within the scope
of his powers and duties in terms of any legislation. Is it not?
ADV VINCENT MALEKA SC: Yes. We make two points there Chair.
CHAIRPERSON: Ja.
ADV VINCENT MALEKA SC: These reports were filed by him in terms of Section 34 of
PRECCA which is the Prevention and Combating of Corrupt Activities Act and secondly
flowing from that duty he had under Section 34(1) he also has a duty to disclose the
10

information before you via a subpoena which you issued in terms of section, I think it is
three of the Commissions Act read together with the rules and the regulations. So he
had the duty the moment that you say under that legislation I call upon you to produce
the information and to that extent the confidentiality provided for in the general
provisions of Section 41 would be overridden by reason of that exception. In other
words he, once you issue a subpoena and you issue it in terms of the Commissions Act
he has a duty to comply with that legislation and the process issued under that
legislation.
CHAIRPERSON: You see my inclination right now is that this might be something that
one needs more time to reflect on.

20

ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: Than just to deal with it in this fashion and that it would be good to
get something in writing that deals with the issues properly.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: Now it maybe that to the extent that I may be required to; you may
be needing my order or directive to see the information that is confidential there. It may

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be that I need an application.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: That sets out the background and everything and some of the points
that you have made and makes reference to the legislation to say such a directive or
order may be made because of A, B, C, D, E.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: Then I can look at that properly and then take an informed decision.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: So that is my inclination
10

ADV VINCENT MALEKA SC: Alright.
CHAIRPERSON: I do not know what you have [intervenes].
ADV VINCENT MALEKA SC: Chair that is fine.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: We are grateful for that suggestion.
CHAIRPERSON: Hm.
ADV VINCENT MALEKA SC: We will then not refer to.
CHAIRPERSON: Yes, for now.
ADV VINCENT MALEKA SC: The contents.
CHAIRPERSON: Yes.

20

ADV VINCENT MALEKA SC: Of the STR.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: But they need to be in safekeeping.
CHAIRPERSON: Safe custody.
ADV VINCENT MALEKA SC: For the time being.
CHAIRPERSON: Yes.

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12 MARCH 2019 – DAY 64
ADV VINCENT MALEKA SC: And the best we know is your office.
CHAIRPERSON: Ja.
ADV VINCENT MALEKA SC: Can I ask your permission to leave this documentation
in the safe hands of your Registrar?
CHAIRPERSON: Ja that is fine.
ADV VINCENT MALEKA SC: And there may be retrieved.
CHAIRPERSON: The envelope is sealed I assume?
ADV VINCENT MALEKA SC: Chair, I think.
CHAIRPERSON: It needs to be properly.
10

ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: Closed.
ADV VINCENT MALEKA SC: We will ask for the Commission’s staff to make sure that
it is sealed before it is [intervenes].
CHAIRPERSON: Well I would rather you keep it and you make sure that it is properly
sealed, because on its way from you to wherever before it comes back there may be a
risk of it being disclosed.
ADV VINCENT MALEKA SC: Yes, okay.
CHAIRPERSON: Or you can give it to Ms Hofmeyr.
ADV VINCENT MALEKA SC: I believe that.

20

CHAIRPERSON: Ja.
ADV VINCENT MALEKA SC: Ms Hofmeyr has.
CHAIRPERSON: And if it is sealed in front of us it would be all the better.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: Okay.
ADV VINCENT MALEKA SC: She has a double pair of safe hands than me.

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CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: Chair then that paves the way to the presentation of
Mr Sinton’s evidence, because that is not affected by.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: The niceties of the debate we have just had.
CHAIRPERSON: Ja.
ADV VINCENT MALEKA SC:

May I then ask for your registrar to administer the

prescribed oath.
CHAIRPERSON: Yes. Do that registrar.
10

REGISTRAR: Please state your full name for the record.
MR IAN HAMISH SCOTT SINTON: Ian Hamish Scott Sinton.
REGISTRAR: Do you have any objection with taking the prescribed oath?
MR IAN HAMISH SCOTT SINTON: No.
REGISTRAR: Do you consider the oath to be binding on your conscience?
MR IAN HAMISH SCOTT SINTON: Yes.
REGISTRAR: Do you swear that the evidence you will give will be the truth, the whole
truth and nothing but the truth if so please raise your right hand and say so help me
God.
MR IAN HAMISH SCOTT SINTON: So help me God.

20

MR IAN HAMISH SCOTT SINTON: (duly sworn, states)
ADV VINCENT MALEKA SC: Mr Sinton good morning and welcome once again. You
are no stranger to the proceedings or the Commission. Correct?
MR IAN HAMISH SCOTT SINTON: Correct Mr Maleka.
ADV VINCENT MALEKA SC:

Yes.

You have previously testified in relation to

paragraph 1.7 of the Commission’s terms of reference and your evidence is on record,

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but you appear here for the second time as a result of the subpoena which the
Commission served on Standard Bank. Correct.
MR IAN HAMISH SCOTT SINTON: That is correct.
ADV VINCENT MALEKA SC:

Yes and in response to that subpoena you have

produced a statement which comprises not only the body of the statement itself, but
also several annexures attached to it?
MR IAN HAMISH SCOTT SINTON: That is correct.
ADV VINCENT MALEKA SC: Can I makes sure that you are aware of what stateme nt
we will be dealing with and make sure that it is your statement? Before you there is a
10

bundle of documents which has now being presented before the Chairperson as
EXHIBIT U10 and I see that you are paging through that bundle.
MR IAN HAMISH SCOTT SINTON: Yes, I have it in front of me.
ADV VINCENT MALEKA SC: It is properly paginated from page 1 until the end. Can I
take you to page 1?
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: You recognise that document?
MR IAN HAMISH SCOTT SINTON: I do.
ADV VINCENT MALEKA SC: It is headed “Witness Statement of Mr Ian Sinton”. It is
your witness statement?

20

MR IAN HAMISH SCOTT SINTON: It is, yes.
ADV VINCENT MALEKA SC: Can you go to page 27 of that bundle?
MR IAN HAMISH SCOTT SINTON: I have it.
ADV VINCENT MALEKA SC: There is a signature there. Whose signature is it?
MR IAN HAMISH SCOTT SINTON: That is my signature.
ADV VINCENT MALEKA SC: Do you confirm that you appended that signature on that

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page?
MR IAN HAMISH SCOTT SINTON: Chair, yes I am willing to say I confirm. I would
like if I may just to correct an aspect of the submissions made by Advocate Maleka.
CHAIRPERSON: Yes.
MR IAN HAMISH SCOTT SINTON: He as is clear is he does not have any knowledge
of the content of the sealed envelope which I brought with me.
CHAIRPERSON: Yes.
MR IAN HAMISH SCOTT SINTON: And I would like to emphasise that we received, I
received personally a subpoena to give evidence to you about our dealings with a
10

range of named companies considering a range of named accounts.
CHAIRPERSON: Yes.
MR IAN HAMISH SCOTT SINTON: And included in the subpoena was a request that I
deliver all Suspicious Transaction Reports which may have been submitted in terms of
the Financial Intelligence Centre Act. Now I must make it clear that as a bank we are
obliged to report to the Financial Intelligence Centre on suspicious transactions. That
reporting is undertaken by a division in the bank that is dedicated to that role.
CHAIRPERSON: Yes.
MR IAN HAMISH SCOTT SINTON: And because of the prohibitions on disclosure of
whether a report has been submitted or not that division is in our terms behind an

20

information barrier. I personally have no knowledge of any Suspicious Transaction
Reports.
CHAIRPERSON: Yes.
MR IAN HAMISH SCOTT SINTON:

What I can attest to here is that quite

independently of suspicious transactions that have been reported to the Financial
Intelligence Centre we have ongoing surveillance of clients for suspicious transactions

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generally to make a decision as to whether we can continue to deal with them or not.
CHAIRPERSON: Yes.
MR IAN HAMISH SCOTT SINTON: And it is that function that I performed while at
Standard Bank and it is information that I feel is confidential in performing that function
in particular reports submitted under Section 34 of the Prevention and Combating of
Corrupt Activities Act. That is a; it is reckless to me in the sense that the Financial
Intelligence Centre Act says that any person who submits a report to the Financial
Intelligence Centre is immune from either civil or criminal proceedings flowing from the
fact of that making that report.
10

CHAIRPERSON: Yes.
MR IAN HAMISH SCOTT SINTON:

PRECCA as we call it, the Prevention and

Combating of Corrupt Activities Act obliges any Manager who has knowled ge of
corruption to report that to the Hawks.
CHAIRPERSON: Yes.
MR IAN HAMISH SCOTT SINTON: But there is no equivalent protection. So if those
reports are passed on to the Hawks it is possible that the person who makes that report
can become exposed to criminal or civil proceedings.
CHAIRPERSON: Yes.
MR IAN HAMISH SCOTT SINTON:
20

And for that reason that I have included in a

separate affidavit information concerning those types of report which I think it would be
hopefully inappropriate for me to talk about on national TV.
CHAIRPERSON: Yes.
MR IAN HAMISH SCOTT SINTON: I would prefer that to be a subject matter that
comes to your attention. You can, may rule on it and it’s for your knowledge only at this
stage, if that makes sense.

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12 MARCH 2019 – DAY 64
CHAIRPERSON: Yes, what you are talking about now is it what is in the envelope that
Mr Maleka sought to give to me?
MR HAMISH SCOTT SINTON: That’s correct Judge, what’s in my statement here is
information which is wholly unrelated to Suspicious Transaction Reports made to th e
Financial Intelligence Centre.
CHAIRPERSON: Yes, so the point you are making is that what is in your statement
you have no problem talking about it openly but what is in that envelope is something
that you would like to be dealt with differently.
MR HAMISH SCOTT SINTON: On a confidential basis yes.
10

CHAIRPERSON: On a confidential basis.
MR HAMISH SCOTT SINTON: Yes Chair.
CHAIRPERSON: Okay, well Mr Maleka does hear that, I hear that, I think that the legal
team will reflect on that in the context of what you have just said and the discussion I
had with Mr Maleka a few minutes ago and at a certain stage, they would indicate to
you or Standard Bank’s lawyers what they – how they propose it should be dealt with
before I make any decision probably Standard Bank’s lawyers, it might be a good thing
for Standard Bank’s lawyers to make some submissions as well as to how it should be
handled, I just mention that, would that be fine with you?
MR HAMISH SCOTT SINTON: That’s fine Chair, thank you.

20

CHAIRPERSON: Okay, thank you. Mr Maleka is that fine?
ADV VINCENT MALEKA SC: Yes, I understand but there’s a reason why firstly we did
not open the reports, there is also the reason why we thought we should get the
guidance of the Chairperson, but Mr Sinton if I can give you the assurance that at the
right time and once we get the direction of the Chairperson we would be able to
authenticate the reports we have received from you, from the Financial Intelligence

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Centre itself because the Commission has been designated as an investigative body for
purposes of cooperation with the Financial Intelligence Centre and to the extent that the
information which you have made available to the Commission requires further
verification we will do so with the Financial Intelligence Centre, through the cooperative
relationship it has with the Commission.
MR HAMISH SCOTT SINTON: Thank you.
ADV VINCENT MALEKA SC: Yes, Chair we will get to that issue after we have
addressed you on the legal niceties.
CHAIRPERSON: Yes thank you.
10

ADV VINCENT MALEKA SC: But you were comfortable to testify today based on your
statement openly and before national TV?
MR HAMISH SCOTT SINTON: Yes I am.
ADV VINCENT MALEKA SC: Okay, can I make sure that as you testify based on your
statement you accept that you have read it before you took the witness stand, correct?
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Is there any aspect of the statement you would like to
reflect upon with the view to modify it, alter it, or in any way change its context?
MR HAMISH SCOTT SINTON: No.
ADV VINCENT MALEKA SC: You confirm that that statement is true to the best of

20

your knowledge and ability?
MR HAMISH SCOTT SINTON: I do.
ADV VINCENT MALEKA SC: Yes. Mr Sinton I am going to confirm quite quickly
background matters without repeating the contents of your statement given the time
constraints we have. Can I ask you to go to page 1 of Exhibit U10.
MR HAMISH SCOTT SINTON: I have it.

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ADV VINCENT MALEKA SC: You indicate there that up until last year June you had
been the General Group Counsel of Standard Bank Group Limited including its
subsidiary Standard Bank of South Africa Limited, correct?
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: And you say that from June 2018 you stepped down, but
you are still with Standard Bank?
MR HAMISH SCOTT SINTON: That is correct.
ADV VINCENT MALEKA SC: What do you?
MR HAMISH SCOTT SINTON:
10

I remain in the Legal Division Standard Bank

managing its engagements with specific issues such as this Commission and other
litigation.
ADV VINCENT MALEKA SC: Yes, and you have an interest in matters that are
presently being investigated by the Commission, correct?
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: And you cooperate with the Commission from time to
time?
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: It is in that context that as a result of the subpoena you
responded cooperatively to present your evidence today?

20

MR HAMISH SCOTT SINTON: That is correct.
ADV VINCENT MALEKA SC: Yes. Mr Sinton if you go to page 2 in paragraph 2 you
confirm that you received a subpoena from the Commission, identifying various entities
who held accounts with Standard Bank in which there was a movement of cash relating
to those entities, correct?
MR HAMISH SCOTT SINTON: That is correct yes.

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ADV VINCENT MALEKA SC: And you confirm that after receiving that subpoena you
did your own investigation relating to those entities and movement of cash in the
accounts held by them with Standard Bank?
MR HAMISH SCOTT SINTON: That is correct.
ADV VINCENT MALEKA SC: I am not suggesting that you yourself did the exercise,
you did so with the help of your colleagues, is that correct?
MR HAMISH SCOTT SINTON: That’s correct yes.
ADV VINCENT MALEKA SC: Now you say that you had previously testified before the
Commission with reference to paragraph 1.7 of the terms of reference, we say so in
10

paragraph 3 of our statement and you explain the risk management policy of Standard
Bank relating to the accounts held by its clients with it from paragraph 6, do you see
that?
MR HAMISH SCOTT SINTON: Yes I do.
ADV VINCENT MALEKA SC:

And as I understand your evidence that risk

management exercise has two components to it, the one is statutory obligations
imposed upon Standard Bank, correct?
MR HAMISH SCOTT SINTON: That is correct.
ADV VINCENT MALEKA SC: Can you just give us the highlights of those statutory
obligations.
20

MR HAMISH SCOTT SINTON: There are many obviously but in the context of the
business of this Commission ...(intervention)
ADV VINCENT MALEKA SC: The major ones.
MR HAMISH SCOTT SINTON: The major ones are the Financial Intelligence Centre
Act, the Prevention of Organised Crime Act and the Prevention and Combating of
Corrupt Activities Act. All the Acts prohibit certain conduct and all the Acts impose

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severe penalties for non-compliance. From the Financial Intelligence Centre Act point
of view the prohibition most relevant to us on an ongoing basis is the prohibition on
entering into transactions that are suspicious and has not been reported to the
Financial Intelligence Centre, that of itself is a crime.

Under the Prevention of

Organised Crime Act there are various provisions but the one that matters most to us is
the prohibition on dealing in the proceeds of crime effected in money laundering and
then the third is the Prevention and Combating of Corrupt Activities Act which prohibits
us as a bank from in any way knowingly facilitating corrupt activities.
Judge it’s important to appreciate that in all three of those statutes they – the
10

offence is knowingly doing a prohibited act but importantly knowingly is defined as
actual knowledge that what is being done is a prohibited act but there’s also deemed
knowledge ie what would a reasonable person – it’s an objective test, what would a
reasonable person in the circumstances should/ought such a person to suspect and
has that person with that suspicion done enough to satisfy him or herself that
proceeding is not committing the offence itself, so it’s not good enough to say well we
had no knowledge of wrongdoing, we have to worry about whether there are suspicions
of wrongdoing, have we investigated the facts to determine whether or not the
wrongdoing is occurring before we can proceed with any transaction.
So based upon this policy we monitor all of our clients activities on an

20

ongoing basis and where we have reason to believe quite apart from what is reported
on the Financial Intelligence Centre where conduct appears to us to be suspicious we
will investigate and if we think that conduct is such as it will expose us to contravention
of any of these acts we typically prefer to terminate the relationship, rather than face
the risk of prosecution ourselves.
ADV VINCENT MALEKA SC: Mr Sinton the second leg of that risk management policy

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and process your bank pursues is based on something less than the statutory
obligation to report which in your affidavit you call a reputational risk?
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: From your testimony that you gave previously y ou peg
or base reputational risk on a private loyal relationship between a bank and a client?
MR HAMISH SCOTT SINTON: That is correct yes.
ADV VINCENT MALEKA SC: Can you just take us through the highlights of why
Standard Bank would at some point as part of its risk management policy a reputational
risk test to determine whether or not it should hold, continue, or terminate accounts of
10

its clients?
MR HAMISH SCOTT SINTON: Chair yes we obviously as a bank we have various
stakeholders who are very concerned with the reputation we have for integrity and
honesty, clearly many of our, not many, most of our customers, I would say probably all
of our customers are concerned to be dealing with a bank that does not knowingly
expose itself to wrongdoing.

We obviously are a regulated entity, we are highly

regulated, we have ongoing oversight from the regulators both here and internationally,
they are very concerned to know that we do not knowingly engage in activities which
would seem to be wrongdoing. We clearly have shareholders who invest in our bank
and expect us management to behave in a way which is beyond reproach and we also
20

have employees who insist that if they work for us they like to know they’re working for
a business that has a reputation for integrity and ethics, and all these considerations
put together really give rise to the idea that if we find ourselves dealing with
counterparties generally, it’s not only just customers, some of the people who supply us
are also in the same category, and some people to whom we supply services are in the
same category, where we think we’re being exposed to dealings which are considered

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illegal or immoral, unethical we reserve the right contractually, ie in terms of the
common law, to terminate those dealings, and that is because we think that we’re
exposed to reputational risk which we regard to be unacceptable.
ADV VINCENT MALEKA SC: Thank you Mr Sinton. If I may take you back to the first
leg of your risk management process and policy. You identified money lau ndering as
one of the transactional activities that you would be required to report on. Now for
those of us who are not steeped in your industry can I ask you to decode the meaning
of the term, how does money laundering manifest itself practically?
MR HAMISH SCOTT SINTON: The most typical format is where money is used or
10

generated in the commission of a crime the source of the money being crime is sought
to be hidden often through the banking system, ie it is paid to numerous accounts in
different denominations, different multiples in order to disguise its origin and so that
money being the proceeds of crime will end up ostensibly being for a legitimate purpose
like bank salaries and wages and there are multiple transactions in between and the
banking system is enjoined by the statutes to be particularly alert to this and to report it
when it sees it.
ADV VINCENT MALEKA SC: As I understand your explanation it is an attempt to hide
or conceal the original source of the money.
MR HAMISH SCOTT SINTON: That is correct.

20

ADV VINCENT MALEKA SC: It is what I think one of the bankers described as using a
banking system as a Laundromat to wash dirty money?
MR HAMISH SCOTT SINTON: That’s a fair description Mr Maleka.
ADV VINCENT MALEKA SC: Mr Sinton you being to address the concerns you had
relating to entities that you described as Gupta hold or Gupta related entities or persons
associated with the Gupta Family from page 5 of your statement, correct?

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MR HAMISH SCOTT SINTON: That is correct.
ADV VINCENT MALEKA SC: Can you just summarise if you could quickly what gave
rise to your concerns in that regard and how you dealt with those concerns
MR HAMISH SCOTT SINTON: In the second half of 2015 Chair we obviously noticed
the well publicised reports concerning the – in terms of commerciality, there was the
prior landing of an aircraft at an air force base a couple of years before which was
deemed suspicious but it didn’t necessarily impact upon any banking relationship but
from 2015 ABSA Bank announced that it had terminated all dealings with the Gupta
family an entities that it controlled. Obviously they are subject to the same laws as us,
10

they apply in our view similar reputational standards they would have had good cause
to that, that was concerning and that was followed soon thereafter by KPMG
announcing that they are withdrawing all their audit services from those same entities,
citing reputational risk and then I think their sponsor for Oakbay on the Stock Exchange
similarly said they are withdrawing. Now obviously those are for us red flags, we
considered that if other banks had information which they found concerning enough to
warrant termination of relationships we ought to investigate ourselves so we then set
about an analysis in our records as to which entities we had dealings with which were
linked in any way to the Gupta family and that was done both using internal resources
and we also used external investigative resources to gather together information with

20

which we could then make our own independent assessment of whether we could to
the extent that we may have these entities banking with us continuing the relationship
in the light of what other banks have done and other entities have done.
ADV VINCENT MALEKA SC:

Yes, Mr Sinton you canvassed what you did from

paragraph 12 on page 5 of your statement and it is essentially a repeat of the evidence
you have previously given. I don’t think that there is a need to repeat it unless you

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insist that it should be repeated.
MR HAMISH SCOTT SINTON: No, no need to.
ADV VINCENT MALEKA SC: Yes, but you mention in paragraph 16 on page 7 the fact
that Optimum Colliery was a customer of Standard Bank, we have received a lot of
evidence about the relationship between Optimum Coal Pty Limited and Optimum Coal
Holdings and Glencore AG, Glencore International AG. I take it that you are aware of
those entities?
MR HAMISH SCOTT SINTON: I am yes.
ADV VINCENT MALEKA SC: Can I ask you which of those entities at that point in time
10

held transactional accounts with Standard Bank?
MR HAMISH SCOTT SINTON: Optimum Coal Mine itself had transactional accounts
with Standard Bank, there was a trust, a rehabilitation trust set up by Glencore for
Optimum Coal Mine that also had an account with Standard Bank, I don’t – I can’t tell
you now whether Optimum Coal Holdings, the parent company, had an account with us,
but I would surprised they didn’t because generally we have banking relations with the
Glencore Group so I can’t say precisely which entities but certainly Optimum Coal Mine
did.
ADV VINCENT MALEKA SC: Yes, you are aware that in terms of the mining legislation
those who conduct money activities or own mines are required to provide some sort of

20

funds or guarantee for the rehabilitation of the damage to the environment caused by
the mining entities.
MR HAMISH SCOTT SINTON: I’m aware of that yes.
ADV VINCENT MALEKA SC: I think they call them the rehabilitation funds?
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Are you aware whether there were any rehabilitation

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funds which were created by or on behalf of Optimum Coal Mining or Optimum Coal
Holdings or an entity called Koorfontein?
MR HAMISH SCOTT SINTON: I am aware we – Optimum – I can’t remember the
correct name of it but the Optimum Rehabilitation Trust was a trust se t up to house the
rehabilitation fund for the Optimum Coal Mine and those funds were deposited with
Standard Bank and they were with Standard Bank at the time of the change in control.
ADV VINCENT MALEKA SC: Yes. And you – those accounts were held with Standard
Bank by the Trust?
MR HAMISH SCOTT SINTON: The Trust.
10

ADV VINCENT MALEKA SC: So the Trust was your client?
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC:

Yes, now in paragraph 16

you talk about what

happened in relation to the change of ownership relating to Optimum Coal, correct?
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC:

And then you take the development further from

paragraph 17 on the same page, and there you talk about the involvement of persons
who at the time I suppose were acting on behalf of the new owner of Optimum Coal
which was Tegeta?
MR HAMISH SCOTT SINTON: Correct yes.
20

ADV VINCENT MALEKA SC: Can you just give us the highlights of what happened in
relation to your engagements with those who represented the new owner at the time.
MR HAMISH SCOTT SINTON: Shortly after the change in control of the Optimum Coal
Mine was announced we were contacted by a representative of Oak Bay who were the
ultimate owners I think or controllers of Tegeta to ask whether we wo uld continue to
provide banking services to Optimum Coal Mine in the light of, the chain of control

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where they had acquired control but also in light of our stated desire to terminate all
dealings with them and that was a consideration which we had to tak e into account. At
the same time we received an email from a Ms Veronica Ravagahn of Oakbay asking
us to transfer the funds we’re holding on behalf of the trust to Oakbay, there were
R1.7billion odd, I think it was, we refused to transfer the funds held for the trust
because we said we required a directive from the trustees themselves, not from the
new shareholders of the mine, and within a few days the trustees were changed and
Oakbay appointed new trustees to the trust and the new trustees gave us instru ctions
to transfer the funds to the Bank of Baroda. And we still resisted, we still we would like,
10

because the beneficiary of the trust was the Minister of Mineral Resources, we wanted
his permission to transfer the funds to the Bank of Baroda and that pe rmission was
forthcoming in the form of a letter that these funds could be transferred from us to the
Bank of Baroda.
ADV VINCENT MALEKA SC: Yes.
MR HAMISH SCOTT SINTON: As far as the mine was concerned we decided that the
new controlling shareholders were directly and indirectly the same entities with whom
we decided to terminate all dealings so we gave notice that we could not continue to
provide transactional services to Optimum Coal Mine, as a result of the change in
control.

20

ADV VINCENT MALEKA SC: So that was the end of your transactional relationship
between you and Optimum Coal Mine?
MR HAMISH SCOTT SINTON: That’s correct yes.
ADV VINCENT MALEKA SC: Do you know who then provided transactional activities
to Optimum Coal Mine after you terminated your relationship with it?
MR HAMISH SCOTT SINTON: No I have no knowledge.

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ADV VINCENT MALEKA SC: You have no knowledge, okay. You say that in the
course of your discussions with the new owners or their representatives of Optimum
Coal you had occasion to peruse the share sale agreement that was executed between
Optimum Coal or Optimum Coal Holdings with Tegeta and/or Oakbay?
MR HAMISH SCOTT SINTON: That is correct.
ADV VINCENT MALEKA SC: And you realised that it provided for several conditions,
one of which was the release of a guarantee. Can you just give us some sense of what
the share sale agreement provided in relation to that guarantee? Chair we will deal
with that issue in detail when Mr Marsden takes the stand but I think it’s important from
10

the perspective of Mr Sinton to tell us what he noticed and what was so important about
it.
CHAIRPERSON: Yes, thank you.
MR HAMISH SCOTT SINTON:

Our understanding Chair is that Optimum Coal

Holdings was the parent company of Optimum Coal Mine. Optimum Coal Holdings in
its capacity as the parent had given a guarantee in favour of Eskom for the due
performance by Optimum Coal Mine’s obligations to Eskom that Eskom had imposed a
penalty of about R2.1billion upon Optimum Coal Mine for allegedly defective coal
delivered and had then issued a summons out of court for recovery of that amount from
both the Coal Mine as the principal obligor and from Optimum Coal Holdings as the
20

surety or guarantor, and we noticed that it was a condition precedent in this transacti on
that the buyer, Tegeta, procure that Optimum Coal Holdings and its parent companies
and all employees of its parent companies be released from this claim against the
guarantor and for a R2.1billion claim and we out of interest asked Mr Naziem Howa at
a meeting we had with him, he represented the Oakbay Group of Companies, what
consideration had been given by Tegeta to persuade Eskom to effectively release

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Optimum Coal Holdings and its shareholders and employees etcetera from this
R2.1billion claim and he told us that there had been no requirement other than that
Tegeta step into the shoes of the guarantor.
There may well have been other compelling commercial reasons around that
but from our perspective as bankers we thought that it be highly unusual t hat if Eskom
genuinely believed they had a claim for R2.1billion that they would waive it to enable
Tegeta to acquire control of the mine, so we were not satisfied that that was an arm’s
length arrangement at the time.
ADV VINCENT MALEKA SC:
10

Well Mr Sinton you will be interested to know that the

Chair has heard a lot about how the condition in this new agreement dealt with the
question of the guarantee. There was the release of the guarantee then in existence
that was provided by Optimum Coal Holdings on condition that Tegeta and Oakbay put
up a substitute guarantee and that never happened. Are you aware of that fact?
MR HAMISH SCOTT SINTON: I am aware only to the extent that at the time I spoke to
Mr Howa I asked whether the substitute guarantee had been provided, his words were
“not yet”, yet the transaction had been completed.
ADV VINCENT MALEKA SC: Yes, and the Chair has heard evidence about the
implication of the failure to put up that substitute guarantee firstly any liability arising
from the R2.1billion arbitration claim will be gone, but secondly continuing obligations

20

under the CSA were not secured by means of a guarantee, and to the extent that there
were penalties for the defective coal Eskom was not secured by means of a guarantee,
but anyway can I get back to your statement. You deal with several meetings you had
between yourself and some of your colleagues with representatives of Oakbay from
paragraph 19 on page 9. You have previously said a lot about this and I am not going
to ask you to repeat what you said in that regard, unless you want to reflect on it and

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deal with it?
MR HAMISH SCOTT SINTON: I have nothing to add at this stage.
ADV VINCENT MALEKA SC: Yes, I then would like to take you to the substance of
this round of your evidence. You begin with it from paragraph 23 on page 11. Are you
happy that we should go there?
MR HAMISH SCOTT SINTON: I am.
ADV VINCENT MALEKA SC: The heading on that page before paragraph 23 is
Regiments Capital Pty Limited, do you see that?
MR HAMISH SCOTT SINTON: I do.
10

ADV VINCENT MALEKA SC: Can you just explain to us who Regiment is and what
relationship if any it had with Standard Bank at the time?
MR IAN HAMISH SCOTT SINTON: Regiments Capital PTY Limited was at the time
well – from as early as about 2012 conducted was transactional accounts with Standard
Bank and he had acquired a reputation as being an advisor of choice of black owned
advisor of choice to many of the SOE’s and so we encountered it in various guises in
the market as being advisor to SOE’s but in this context it was – had transactional
accounts with Standard Bank.
ADV VINCENT MALEKA SC: How many accounts to the best of your recollection?
MR IAN HAMISH SCOTT SINTON: I am aware – I am aware of only one.

20

ADV VINCENT MALEKA SC: Alright. And in paragraph 23 you say that what was of
concern to you regarding Regiments and your relationship with it is a media article that
appeared that you annex on page 77 of your statement. Correct?
MR IAN HAMISH SCOTT SINTON: That is correct yes.
ADV VINCENT MALEKA SC: Can I ask you to look at page 77 and tell us what was of
concern to you that impacted on your relationship with Regiments? If necessary you

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can read out portions of the article that you relied on to form the view you express in
paragraph 23 of your statement?
MR IAN HAMISH SCOTT SINTON: It is not mentioned specifically in the statement but
in – there was a report commissioned by the Chairman of Trillian by Advocate
Budlender SC into Trillian’s dealings at Eskom and that had been publis hed and that
led to a lot of media attention being placed on Eskom and Eskom’s reliance upon
Trillian. At the time McKinsey which is mentioned in that report was a supplier of
services to Standard Bank and therefore the whole adverse media reports caused us
concern.
10

ADV VINCENT MALEKA SC: Can I ask you to pause there. You talk about McKinsey
supplying services to Standard Bank?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Can you elaborate a bit about what sort of services?
MR IAN HAMISH SCOTT SINTON: Consultancy services they were advising the bank
on strategy and adapting our processes for the New Age for technology and what have
you.
ADV VINCENT MALEKA SC: Yes.
MR IAN HAMISH SCOTT SINTON: It was quite wide scale services.
ADV VINCENT MALEKA SC: McKinsey is a management services global entity?

20

MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC:

Yes.

So was it providing management consulting

services to you?
MR IAN HAMISH SCOTT SINTON: To Standard Bank yes.
ADV VINCENT MALEKA SC: And it would therefore have access to your management
processes?

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12 MARCH 2019 – DAY 64
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC:

Part of which will include the obligation to report?

MR IAN HAMISH SCOTT SINTON: I would imagine so yes.
ADV VINCENT MALEKA SC: Yes.
MR IAN HAMISH SCOTT SINTON: At page 77 there is a news report where it says it
reads as follows:
“After a week of global consulting firm McKinsey trying to
distance itself from the Gupta’s and questionable contracts at
Eskom more details have emerged of kickbacks to Gupta linked
10

shelf companies. AmaBhungane is reporting on Monday how
McKinsey and Regiments Capital scored a massive consulting
tender at Transnet but Regiments internal records show half of
the profits were siphoned off to so called business development
partners. In 2015 Transnet awarded at R375 million consulting
project to Regiments Capital and McKinsey. Regiments Capital
Director Eric Wood would later join Gupta Associate Salim Essa
to start Trillian. Regiments internal documents reveals that it
paid over half its contract income to facilitators including shelf
companies linked to the Gupta and their associates. Records

20

show that over a ten month period it diverted 55% of its income
from the deal to so called business development partners.
Coming records reveal that these development partners have
direct link to the Gupta’s.”
That was one such report that obviously …
ADV VINCENT MALEKA SC: Yes. Of course these are media reports?

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12 MARCH 2019 – DAY 64
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: They may be true, they may not be true but what did you
do you were Standard Bank after you got to know about this media report relating to
firstly your service provider being McKinsey, secondly your client being Regiment –
Regiments?
MR IAN HAMISH SCOTT SINTON: We requested a meeting with senior management
of McKinsey.
ADV VINCENT MALEKA SC: Who were they?
MR IAN HAMISH SCOTT SINTON: And the initial meeting was the head of risk the
10

senior people from the country – South Africa country office and the head of risk from
the UK. That was the initial meeting and then was then escalated to a Mr Dominic
Barton I think is the Global Head for McKinsey or he was at the time and their global
general counsel Jean Malena her name was they were all flown to South Africa to meet
with us so we could express to them our concern about this adverse information as had
emerged about their dealings at Transnet and at Eskom. Their response was to say… I
am sorry.
ADV VINCENT MALEKA SC: Yes. Mr Sinton I mean – I am sorry to take you back
and I am sorry to ask you to recall things that may have happened months if not years
ago. But I think it is important for us to get matters of detail. You seem to indicate that

20

there was an initial and a follow up meeting with McKinsey?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Are you able to tell us more or less the dates?
MR IAN HAMISH SCOTT SINTON: I cannot tell you now but I can certainly get the
dates for you and tell you in due course.
ADV VINCENT MALEKA SC: It will be helpful if you could. In relation to the initial

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meeting who attended that meeting on behalf and representing Standard Bank?
MR IAN HAMISH SCOTT SINTON: Again I will have – I have – I will have a record but
I certainly recall it was myself and the head of compliance for our corporate investment
bank.
ADV VINCENT MALEKA SC: And from…
MR IAN HAMISH SCOTT SINTON: Was in the meeting.
ADV VINCENT MALEKA SC: From the part of McKinsey?
MR IAN HAMISH SCOTT SINTON: It was a Mr Levi who was introduced as the head
of risk based in London and then there were two or three partners from the
10

Johannesburg office. Again I can get their names for you I do not know I cannot recall
offhand.
ADV VINCENT MALEKA SC: Can I just rattle one or two names and see whether…
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: They would ring a bell to you. Do you know Mr Vikas
Sagar?
MR IAN HAMISH SCOTT SINTON: He was not at the meeting.
ADV VINCENT MALEKA SC: He was not at the meeting. Do you know Doctor Eric
Weiss?
MR IAN HAMISH SCOTT SINTON: Yes the name rings a bell.

20

ADV VINCENT MALEKA SC: Was he to your recollection at or not at the meeting?
MR IAN HAMISH SCOTT SINTON: I cannot say.
ADV VINCENT MALEKA SC: Okay. Do you know the name I think it is Yungling?
MR IAN HAMISH SCOTT SINTON: The name rings a bell.
ADV VINCENT MALEKA SC: Lawrence Yungling?
MR IAN HAMISH SCOTT SINTON: I would hesitate to say he was at the meeting.

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ADV VINCENT MALEKA SC: Do you know the name David Fine?
MR IAN HAMISH SCOTT SINTON: I know the name but no he was not at the meeting
as far as I can recall.
ADV VINCENT MALEKA SC: Okay. So we would proceed on the basis that you
cannot recall the names of the representatives of McKinsey at the first meeting?
MR IAN HAMISH SCOTT SINTON: Apart from Mr Levi?
ADV VINCENT MALEKA SC: Yes.
MR IAN HAMISH SCOTT SINTON: I certainly remember him [indistinct].
ADV VINCENT MALEKA SC: Yes okay. You will come back to us about the date?
10

MR IAN HAMISH SCOTT SINTON: I will yes.
ADV VINCENT MALEKA SC: And were these discussion recorded or not in any form
to the best of your recollection?
MR IAN HAMISH SCOTT SINTON:

The actual discussions themselves were not

recorded but the import of the discussion was that the adverse reports had taken
McKinsey by surprise and McKinsey the international firm by surprise. That they had
appointed both local and international lawyers to do a thorough investigation of the
information to try and get to the truth of the matter and that they would share that
information with us in due course. There was subsequent correspondence between us
and McKinsey where we reminded them of that – of that promise a few times.
20

ADV VINCENT MALEKA SC: We will get back to the promise because it is one matter
where I would like to get your evidence. That was the first meeting. We go to the
follow up meeting. Again you will come back to us with the date.
MR IAN HAMISH SCOTT SINTON: I will yes.
ADV VINCENT MALEKA SC: And was it ever recorded or was the end points of the
meeting ever recorded?

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12 MARCH 2019 – DAY 64
MR IAN HAMISH SCOTT SINTON:

There were exchanges of mails and

correspondence around it but there was no minute produced of the meeting that I am
aware of.
ADV VINCENT MALEKA SC: Okay. Subject to questions of confidentiality are you
able to and prepared to produce the exchange of correspondence for the benefit of the
commission?
MR IAN HAMISH SCOTT SINTON: Yes I am.
ADV VINCENT MALEKA SC: Okay. Would you please give them to us in due course
and if you claim confidentiality let us know
10

MR IAN HAMISH SCOTT SINTON: Yes I have no difficulty it is – it really consists of us
asking if there are any news about their own investigations and them telling us that they
could find no wrongdoing.
ADV VINCENT MALEKA SC: Yes. It seems to me from your evidence that you took
this matter fairly seriously because you thought that it is a matter that ought to be dealt
with and resolved just between you and your service provider?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: You mentioned that McKinsey undertook to come back
to you on what they were doing with those media reports. The question is did they ever
come back to you?

20

MR IAN HAMISH SCOTT SINTON: They did – they did eventually come back to say
that they had done their own investigations and had found evidence of choose my
words carefully – reckless behaviour, bad mistakes made but no wrongdoing of the type
that had been suggested in the media.
ADV VINCENT MALEKA SC: Ja these are generalities and commercial camouflage
not to tell the details. With this behaviour…

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MR IAN HAMISH SCOTT SINTON: I am just summarising what they told us yes.
ADV VINCENT MALEKA SC: Ja, ja but did you ask them what did they mean by
suggesting that they found reckless behaviour or bad mistakes?
MR IAN HAMISH SCOTT SINTON: Yes for example one of the issues raised in the
Budlend Report was a letter written by Mr Vikas Sagar to Eskom authorising that a
substantial sum of money be paid to Trillian and they described that letter as a bad
mistake and I took issue with that description of that letter and I do not recall ever
receiving a response.
ADV VINCENT MALEKA SC: Was that the only indication of bad mistake or reckless
10

behaviour which came up in the course of your conversation with them?
MR IAN HAMISH SCOTT SINTON: Well shortly after they commenced with their own
investigations we took a decision to terminate all dealings with McKInsey and so I really
had no reason to push hard after that for an explanation.
ADV VINCENT MALEKA SC: But before you terminated the relationship all I wanted to
establish really was did they share with you any documentation or investigative reports
of the outcome of investigations that they said they undertook?
MR IAN HAMISH SCOTT SINTON: No we requested such information but it was
declined.
ADV VINCENT MALEKA SC: Do you know why it was declined? I mean did you find

20

out?
MR IAN HAMISH SCOTT SINTON:

I – I – my understanding based upon one

conversation with one of the attorneys is that the investigation reports were provided by
lawyers under the cloak of legal privilege and therefore they did not want to waive that
privilege.
ADV VINCENT MALEKA SC: Alright. You say then you decided to terminate your

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relationship with McKinsey?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: When more or less did you do so?
MR IAN HAMISH SCOTT SINTON: It was shortly – it was shortly after the initial
meeting when they undertook to do that investigation so we said well pending your
investigations we would have no further dealings with you. When you come back with
the exculpatory report well then perhaps we can resume but until then we cannot deal
with you.
ADV VINCENT MALEKA SC: Okay.
10

MR IAN HAMISH SCOTT SINTON: The date I can get it was a formal meeting with
formal conveyance of that I can get that for you.
ADV VINCENT MALEKA SC: Yes. And I understand these sort of relationship or
relationships Mr Sinton there is a closure process that takes place. Correct? I mean
you do not terminate the relationship and parties walk away without finalising.
MR IAN HAMISH SCOTT SINTON: As luck would have it at this time McKinsey when
we terminated had just completed a major piece of work for us and we were about to
commence a new – a new round of work and we said they need – we terminate – we
said we are not going to sign you up for the new round until this is all clarified.
ADV VINCENT MALEKA SC: Alright. That completes the risk that you identified in

20

relation to McKinsey. Unless you have further information to share with us in that
connection I would like you to talk about the risk that you identified in relation to
Regiments and what you did in that regard? You begin to deal with that issue from
paragraph 26 on page 12 of your statement.
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: You mention two entities in that regard. Well let me start

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first with the transactional account that you say you recall Regiments had at Standard
Bank. You identify it by a number there. Again I would like to confirm with yo u that that
is the only banking account you are aware of that Regiments had with Standard Bank?
MR IAN HAMISH SCOTT SINTON: Certainly that I am aware of yes I cannot say that
there are not others but that was the one that was flagged for me as being one
warranting in a further investigation.
ADV VINCENT MALEKA SC: Yes. Chair you would recall that Mr Sinton in his
statement annexes extracts of the bank accounts under that account number. They
begin from page 80.
10

CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: I will get to them in some detail.
CHAIRPERSON: Okay.
ADV VINCENT MALEKA SC:

I am just mentioning them purely for orientation

purposes.
CHAIRPERSON: Okay.
ADV VINCENT MALEKA SC: Mr Sinton in paragraph 26 you begin to mention two
entities Chivita, C-h-i-v-i-t-a Trading PTY Limited and Homix PTY Limited.
MR IAN HAMISH SCOTT SINTON: That is correct.
ADV VINCENT MALEKA SC: Yes. Did any or all of those entities hold accounts with
20

Standard Bank to the best of your recollection?
MR IAN HAMISH SCOTT SINTON: Homix did yes.
ADV VINCENT MALEKA SC: Homix did?
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: Chivita?
MR IAN HAMISH SCOTT SINTON: No I do not recall Chivita having an account with

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us.
ADV VINCENT MALEKA SC: Alright. You say something about those entities and I
would like you to reflect on what you say about them in paragraph 26 and tell us your
concern in your own words relating to those entities?
MR IAN HAMISH SCOTT SINTON: Chair in the light of the adverse media reports
suggesting that Regiments Capital had been guilty of wrongdoing especially at Transnet
I asked people who are responsible for managing accounts and on myself to look
through the accounts and to highlight if they could transactions which looked out of the
ordinary. And they brought to me a pack of a printout of the statement some of which
10

are attached to my affidavit. And if you looked in the statements you could see there
was – there were large transfers into the account in other words you could day to day
transactions, salaries and payments to SARS and some things that look like rent
payments what have you but from time to time there would be a large amount coming in
that seemingly came from Transnet and then shortly thereafter were – there were
amounts large amounts paid away. You could see that often the directors of Regiments
would each take an amount typically about R2 million each out of the monies deposited
and then there were big payments made initially to a company called Chivita Trading
and then also – and then later on to a company called Homix PTY Limited and those I
thought because it was my call at the time needed to be explained. We had no idea

20

what source the money was the application was. Advocate Maleka did mention to you
that we need as bankers to be on top of what those are.
ADV VINCENT MALEKA SC: Chair I am going to go with some reasonable detail to
the accounts that reflect movement of bank balances.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: From page 80. If you could go there Mr Sinton. You will

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see that that is a bank statement dated 28 February 2014 covering the transactional
period 1 February 2014 to 28 February 2014 so it is a period of a month. And its
statement number 31 correct?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC:

And you will see that the banking statement was

provided through a pack of pages beginning from page 1 to page 17, correct? For the
present purposes you chose to give us page 9 of
MR IAN HAMISH SCOTT SINTON: Oh yes that is correct I extracted this – these
statements were attached to a letter which I wrote to Regiments.
10

ADV VINCENT MALEKA SC: Yes. We will get back to the letter.
MR IAN HAMISH SCOTT SINTON: Well I took the whole pack I took out of the pack
numbered 1 to 17 those which contained the transactions which I wanted explanations
for and only sent those to Regiments.
ADV VINCENT MALEKA SC: Yes the point really is that and let us be clear here all
you was to take the bank statements for February which was in more than one page.
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: But for the present purposes or the purposes of the
commission you merely extracted one page of concern to you. In other words a page
that reflected a transaction of concern to you?

20

MR IAN HAMISH SCOTT SINTON: Yes if you go to the previous page, page 79.
ADV VINCENT MALEKA SC: Yes.
MR IAN HAMISH SCOTT SINTON: You will see in the fourth paragraph I say to
Regiments “I attach our statements for your kind – with us numbered 31, 32, 33, 34, 36,
37, 38, 40 and 41 so I only sent them certain of the pages from the compensate
February statement

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12 MARCH 2019 – DAY 64
ADV VINCENT MALEKA SC: And that is understandable because they would have
received the full statement.
MR IAN HAMISH SCOTT SINTON: They would have yes.
ADV VINCENT MALEKA SC: Yes. Now page 9 which is of concern to you and which
is on page 80 reflects an entity called Chivita, do you see that?
MR IAN HAMISH SCOTT SINTON: I do.
ADV VINCENT MALEKA SC: And it reflects an amount as a debit on the account of
Regiments, correct?
MR IAN HAMISH SCOTT SINTON: Correct.
10

ADV VINCENT MALEKA SC: And by debit on a statement it means that money flew
from Regiments account to the account of Chivita?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: How much was it?
MR IAN HAMISH SCOTT SINTON: R5 130,000,00.
ADV VINCENT MALEKA SC: Alright. We will get back to what you did once you
picked up this debit entry on Regiments account. Can we go to the next statement?
Again it is for the same period 1 Feb to 28 Feb 2014. Again it is part and parcel of
statement 31 but this is page 10 of that statement, correct?
MR IAN HAMISH SCOTT SINTON: Correct.

20

ADV VINCENT MALEKA SC: It reflects an amount under an entity called Group
Serve. Do you see that?
MR IAN HAMISH SCOTT SINTON: I do.
ADV VINCENT MALEKA SC: From your investigations who is Group Serve?
MR IAN HAMISH SCOTT SINTON: That is Transnet.
ADV VINCENT MALEKA SC: Transnet?

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12 MARCH 2019 – DAY 64
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: And there there is an amount which is not squarely fitted
alongside debits. It covers both the debit and the credit columns, do you see that?
MR IAN HAMISH SCOTT SINTON: I do.
ADV VINCENT MALEKA SC: When I do the mathematics here it seems as if that
amount was – it seems as if that amount was a credit because immediately after that
entry the balance which is reflected on the last right hand column of that statement
increases from R5.9 million to R11.65 million.
MR IAN HAMISH SCOTT SINTON: That is correct.
10

ADV VINCENT MALEKA SC: So in other words it is money coming into the account of
Regiments.
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC:

Yes.

So the bank balance improves.

What is a

reasonable conclusion you draw from this?
MR IAN HAMISH SCOTT SINTON: Well that was a payment made by Transnet to
Regiments in that amount.
ADV VINCENT MALEKA SC: Yes. Let us go to the next one which is page 82. What I
picked up there again it is part and parcel of statement 31 but this time it is page 11 of
it, do you see that?
20

MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: I picked up an entry there of concern because it is a
substantial amount of R15 million. It is described as an interbank credit transfer, do
you see that?
MR IAN HAMISH SCOTT SINTON: I do yes.
ADV VINCENT MALEKA SC: And from the mathematics of it it improves the balance

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from R10 million to R25 million so it seems as if it is inflow funds.
MR IAN HAMISH SCOTT SINTON: That is correct.
ADV VINCENT MALEKA SC: Do you know who paid this money into the account of
Regiments?
MR IAN HAMISH SCOTT SINTON: No I do not.
ADV VINCENT MALEKA SC: You do not?
MR IAN HAMISH SCOTT SINTON: No.
ADV VINCENT MALEKA SC:

Have you managed – have you not made an

investigation in that regard?
10

MR IAN HAMISH SCOTT SINTON: We would have but I do not know the answer now.
ADV VINCENT MALEKA SC: Okay. Won’t you reflect on it and if necessary come
back to us with ..
MR IAN HAMISH SCOTT SINTON: Yes I will.
ADV VINCENT MALEKA SC: Yes. I would like to complete two more before lunch.
The next one is page 83. Page 12 of the same statement 31, do you see that?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: And there there are two names that appear which I
would like you to deal with. The first is under the name Mohamed Bobat FSF1113.03
do you see that?

20

MR IAN HAMISH SCOTT SINTON: I do.
ADV VINCENT MALEKA SC: What is that amount for?
MR IAN HAMISH SCOTT SINTON: It is R560,00 I think. Oh no sorry R177 515,00
ADV VINCENT MALEKA SC: Yes that is how I read it.
MR IAN HAMISH SCOTT SINTON: That is the payment to Mohamed Bobat ja.
ADV VINCENT MALEKA SC: Do you know who is Mohamed Bobat?

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12 MARCH 2019 – DAY 64
MR IAN HAMISH SCOTT SINTON: I do not know who he is but I have heard of him as
being associated with Mr Salem Essa.
ADV VINCENT MALEKA SC: Yes.
MR IAN HAMISH SCOTT SINTON: And Trillian.
ADV VINCENT MALEKA SC: The next payment is Chivita, do you see it?
MR IAN HAMISH SCOTT SINTON: I do.
ADV VINCENT MALEKA SC: How much was it?
MR IAN HAMISH SCOTT SINTON: R1 385 100,00.
ADV VINCENT MALEKA SC: When was it paid?
10

MR IAN HAMISH SCOTT SINTON: On the 27 February.
ADV VINCENT MALEKA SC: And the mathematics show that there was a reduction in
bank balance which suggests that this money had flown from Regiments account to
that of Chivita?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Yes. Chair can I deal with the last one before the tea
adjournment – the lunch adjournment?
CHAIRPERSON: Ja.
ADV VINCENT MALEKA SC: We go to page 15 of the same statement number 31.
There are five huge debit amounts. The first is the one on I think it is second entry from

20

the top described as Cats Fed Party Payment. How much is the amount there?
MR IAN HAMISH SCOTT SINTON: R5 171 765.00.
ADV VINCENT MALEKA SC: Again the bank balances – the bank balance decreases
and therefore there is money flowing out of Regiments account to that third party.
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Do you know whose that third party?

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12 MARCH 2019 – DAY 64
MR IAN HAMISH SCOTT SINTON: It says her SARS.
MR IAN HAMISH SCOTT SINTON: SARS?
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: Okay. The next amount is Group Serve and it is in the
order of R45.4 million. Do you see that?
MR IAN HAMISH SCOTT SINTON: That is correct.
ADV VINCENT MALEKA SC: Is it the same entity that you described as Transnet?
MR IAN HAMISH SCOTT SINTON: Correct that is a Transnet payment.
ADV VINCENT MALEKA SC: The bank balance increases to R55 odd million.
10

MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: So money had flown in from Transnet into that account
of Regiments?
MR IAN HAMISH SCOTT SINTON: Corect.
ADV VINCENT MALEKA SC: And the last one is Chivita how much is the amount
there?
MR IAN HAMISH SCOTT SINTON: R5 643 00,00 on the 28 February. It was paid
from this account to Chivita.
ADV VINCENT MALEKA SC: Yes because the bank balance decreases there, correct.
MR IAN HAMISH SCOTT SINTON: Correct.

20

ADV VINCENT MALEKA SC: Yes. Chair would this be a convenient stage to take the
lunch adjournment?
CHAIRPERSON: Yes Thank you very much we will take the lunch adjournment and we
will resume at two. We adjourn.
ADV VINCENT MALEKA SC: Thank you.
INQUIRY ADJOURNS

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12 MARCH 2019 – DAY 64
INQUIRY RESUMES:
CHAIRPERSON: Yes you may proceed Mr Maleka.
ADV VINCENT MALEKA SC: Thank you Chair. Mr Sinton can you go to page 86?
MR IAN HAMISH SCOTT SINTON: Yes, I have it.
ADV VINCENT MALEKA SC: You will see for the first time we see a big jump in the
debits relating to Chivita. How much is the debits in this statement?
MR IAN HAMISH SCOTT SINTON: R19 494 000.
ADV VINCENT MALEKA SC: Yes. Then you go to page 87? How much are the
debits of funds going to the account of Chivita?
10

MR IAN HAMISH SCOTT SINTON: The first one is R2 233 393.
ADV VINCENT MALEKA SC: And then? I only picked up that debit and that is.
MR IAN HAMISH SCOTT SINTON: That is right. That is the only one.
ADV VINCENT MALEKA SC: Ja and then if you go to page 88 it is the statement for
the period the 1 st to 30 April 2014. It is statement number 33. Correct?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: There is a deposit from Group Serve. How much is it?
MR IAN HAMISH SCOTT SINTON: R5 848 085 or 86, I am not sure.
ADV VINCENT MALEKA SC: And the next day there is a payment to Chivita. How
much is it?

20

MR IAN HAMISH SCOTT SINTON: R1 897 074.
ADV VINCENT MALEKA SC: And then almost three days later that is 15 April there is
another payment to Chivita. Do you see that?
MR IAN HAMISH SCOTT SINTON: That is correct.
ADV VINCENT MALEKA SC: How much is it?
MR IAN HAMISH SCOTT SINTON: R12 428 793.

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12 MARCH 2019 – DAY 64
ADV VINCENT MALEKA SC: Of course the effect of that payment was to put the
Regiments account into a negative balance. Do you see that?
MR IAN HAMISH SCOTT SINTON: That is correct.
ADV VINCENT MALEKA SC:

Did Standard Bank allow that payment in R12-odd

million to be affected even though it would create a negative balance in the account of
Regiment?
MR IAN HAMISH SCOTT SINTON: [Intervenes].
ADV VINCENT MALEKA SC: [Intervenes].
MR IAN HAMISH SCOTT SINTON: I do not have the detail if there was an agreement
10

to allow an overdraft then it would have been permissible.
ADV VINCENT MALEKA SC: Well.
MR IAN HAMISH SCOTT SINTON: If there was no such an agreement they would
have been called upon to rectify it.
ADV VINCENT MALEKA SC: And that is the point I am trying to find out from you
whether, do you know offhand if you do not can you please establish whether or not
Regiment had an overdraft account with Standard Bank.
MR IAN HAMISH SCOTT SINTON: Yes. I do not offhand and I will establish that, yes.
ADV VINCENT MALEKA SC: Thank you. The next is page 6 of the same statement
which you find on page 89. Are you there?

20

MR IAN HAMISH SCOTT SINTON: Correct, yes.
ADV VINCENT MALEKA SC: For the first time we see payment to an entity called
Albatime, A-L-B-A-T-I-M-E. Do you see that?
MR IAN HAMISH SCOTT SINTON: I do.
ADV VINCENT MALEKA SC: How much is it?
MR IAN HAMISH SCOTT SINTON: R1 397 233,87.

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12 MARCH 2019 – DAY 64
ADV VINCENT MALEKA SC: Have you conducted investigations about this entity,
Albatime?
MR IAN HAMISH SCOTT SINTON: To the best of my knowledge they do not bank with
Standard Bank. So I have not had reason to investigate them, but I have seen media
reports to the effect that they are part of the Gupta entities.
ADV VINCENT MALEKA SC:

Yes.

Chair you will hear a lot about it when the

colleagues from Transnet begin their fair share of presenting evidence on Transnet.
CHAIRPERSON: Okay.
ADV VINCENT MALEKA SC: Then there is payment to Chivita, how much is it?
10

MR IAN HAMISH SCOTT SINTON: It is on 19 April. It was R11 913 000.
ADV VINCENT MALEKA SC: Mr Sinton if I look at the total of the money that had
been paid to Chivita for April out of Regiments’ account. It comes to a total of about
R24-odd million if you take the payments on page 88, add those on page 89.
MR IAN HAMISH SCOTT SINTON: That would be about right, yes.
ADV VINCENT MALEKA SC: It is more than the amount which was in the account of
Regiments for that month.
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Given that fact that it went into a debit or a negative
balance?

20

MR IAN HAMISH SCOTT SINTON: Yes, correct.
ADV VINCENT MALEKA SC: Ja. If you go to the month of May it is from page 90.
You will see page 1 of statement number 34. Do you see that?
MR IAN HAMISH SCOTT SINTON: I do, yes.
ADV VINCENT MALEKA SC: By that time the negative balance had been rectified
because the opening balance which is brought forward, it is about R80 million. Do you

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12 MARCH 2019 – DAY 64
see that?
MR IAN HAMISH SCOTT SINTON: Correct, yes.
ADV VINCENT MALEKA SC: And on the same day that is 2 May there is a R20 million
payment made to Chivita. Do you see that?
MR IAN HAMISH SCOTT SINTON: I do, yes.
ADV VINCENT MALEKA SC: A day later there is another amount paid to Chivita from
the same account.
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: How much is it?
10

MR IAN HAMISH SCOTT SINTON: R20 million.
ADV VINCENT MALEKA SC: So only on two days alone R40 million exits the balance
of Regiments account?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: If you go to the next page which is page 94. It is page 2
of statement 34.
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Further payments are being made to Chivita.
CHAIRPERSON: I am sorry. You are now going to what page?
ADV VINCENT MALEKA SC: 91.

20

CHAIRPERSON: Oh, okay.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: Thank you.
ADV VINCENT MALEKA SC: Thank you Chair. It is page 2 of 16, statement number
34.
CHAIRPERSON: Thank you.

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12 MARCH 2019 – DAY 64
ADV VINCENT MALEKA SC: It is for the same period, 2 May to 31 May 2014. I
suppose the reporting period is 2 May because 1 May is a holiday.
CHAIRPERSON: Ja.
ADV VINCENT MALEKA SC: Mr Sinton what is the payment that goes to Chivita?
MR IAN HAMISH SCOTT SINTON: On 5 May there was an amount of R5 856 500
paid to Chivita.
ADV VINCENT MALEKA SC: So the amount increases to about 45.8 million for that
month alone?
MR IAN HAMISH SCOTT SINTON: Correct.
10

ADV VINCENT MALEKA SC: There are three other payments of R2 million each made
to Directors of Regiments. I am not going to ask you to mention names, but can you
identify them in terms of amounts only and the dates possibly?
MR IAN HAMISH SCOTT SINTON: On 6 May R2 million was paid to each of the three
Directors of Regiments.
ADV VINCENT MALEKA SC: Yes. That is the amount of R2 million that you talked
about earlier?
MR IAN HAMISH SCOTT SINTON: Hm.
ADV VINCENT MALEKA SC: Can you go to page 92? It is for the same period
beginning of the 2 nd and 31 May 2014. There is a huge deposit from Group Serve that

20

is Transnet. How much is it?
MR IAN HAMISH SCOTT SINTON: R22 800 000.
ADV VINCENT MALEKA SC: And the next day payment leaves that balance in favour
of Chivita. How much is it?
MR IAN HAMISH SCOTT SINTON: R3 990 000.
ADV VINCENT MALEKA SC: And there is another amount which is paid to Albatime.

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12 MARCH 2019 – DAY 64
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: I think you have identified that entity, but you do not
know its details. I think you confirmed that it does not hold an account with Standard
Bank. How much is the amount paid to it?
MR IAN HAMISH SCOTT SINTON: R399 000.
ADV VINCENT MALEKA SC: And for the first time we see payment to Homix the same
month payment was made to Chivita?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: How much is it?
10

MR IAN HAMISH SCOTT SINTON: R15 500 00.
ADV VINCENT MALEKA SC: And the next day there is further millions of Rands paid
to Homix?
MR IAN HAMISH SCOTT SINTON: The next day another R6 160 00 to Homix.
ADV VINCENT MALEKA SC: In two days alone 21.7 million leaves the funds of
Regiments to Homix?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Yes and then from page 93 there are further payments
to Homix. Page 93 Mr Sinton as I have it is for the month July 2014. Do you see that?
MR IAN HAMISH SCOTT SINTON: I do, yes.

20

ADV VINCENT MALEKA SC: Statement number 36?
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: How much was paid to Homix?
MR IAN HAMISH SCOTT SINTON: On 16 July R14 525 802 was paid to Homix.
ADV VINCENT MALEKA SC:

If you go over to the next page there are further

payments to Homix.

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12 MARCH 2019 – DAY 64
MR IAN HAMISH SCOTT SINTON: Correct on 18 July, R3 990 000 was paid to Homix.
Then on 22 July another R3 799 050 was paid to Homix.
ADV VINCENT MALEKA SC: So if you do a quick mathematical calculation for that
month alone how much would have been paid to Homix? On my calculation it is almost
R22 million.
MR IAN HAMISH SCOTT SINTON: That is correct, yes.
ADV VINCENT MALEKA SC: Yes. Then I want you to look at the period August, the
1st to August, the 30 th. It is on page 95.
MR IAN HAMISH SCOTT SINTON: Yes.
10

ADV VINCENT MALEKA SC: Transnet put a deposit of R34 million. Do you see that?
MR IAN HAMISH SCOTT SINTON: I do, yes.
ADV VINCENT MALEKA SC: And then thereafter payments are made to Homix?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Can we identify them? The first is on 7 July. How much
is it?
MR IAN HAMISH SCOTT SINTON: R4 902 000 was, sorry 7 August?
ADV VINCENT MALEKA SC: Yes. 7 August.
MR IAN HAMISH SCOTT SINTON: R4 902 000.
ADV VINCENT MALEKA SC: And on the same day payments of R2 million is made to

20

each of the Directors. Correct?
MR IAN HAMISH SCOTT SINTON: That is correct, yes.
ADV VINCENT MALEKA SC: And then there is another amount that is paid by Group
Serve on 8 August. How much is it?
MR IAN HAMISH SCOTT SINTON: R22 296186.
ADV VINCENT MALEKA SC: On the same date payment is made to Homix?

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MR IAN HAMISH SCOTT SINTON: Correct. R12 108 620.
ADV VINCENT MALEKA SC: And three days later another amount is paid to Homix.
How much is it?
MR IAN HAMISH SCOTT SINTON: R11 148 092.
ADV VINCENT MALEKA SC: So in total how much was paid to Homix?
MR IAN HAMISH SCOTT SINTON: Hm.
ADV VINCENT MALEKA SC: I come to the conclusion of 25 million more or less.
MR IAN HAMISH SCOTT SINTON: That seems about right, yes Mr Maleka.
ADV VINCENT MALEKA SC: Then let us look at September. It is on page 96. How
10

much is paid to Homix?
MR IAN HAMISH SCOTT SINTON:

It seems on 30 September an amount of

R8 027 025 was paid to Homix.
ADV VINCENT MALEKA SC: And then if you go to page 97 or know sorry that is for
November. So in September that is the only payment I could pick up of concern to
you?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Then November is page 97. How much is paid to
Homix?
MR IAN HAMISH SCOTT SINTON:
20

[Intervenes]

November

paid

to

Homix

R16 521 968.
ADV VINCENT MALEKA SC: That is the only payment I could pick up in November?
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: Then on page 98 is the statement for December. I am
not too sure if I understand why you had some problem with transactions on this
statement, because I could not pick up any payment to either Homix, Chivita or

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Albatime.
MR IAN HAMISH SCOTT SINTON: On 5 December you will see R1 688 000.
ADV VINCENT MALEKA SC: Oh, yes.
MR IAN HAMISH SCOTT SINTON: R187 to Homix.
ADV VINCENT MALEKA SC: I see. Chair it is about the sixth from the top. I missed
that one.
CHAIRPERSON: Yes, I have found it.
ADV VINCENT MALEKA SC: Is the reason why you give us this document?
MR IAN HAMISH SCOTT SINTON: Yes.
10

ADV VINCENT MALEKA SC: Okay, thank you. We have explored the details relating
to these payments and thereafter you did something about these statements. You
explain what you did at page 12 paragraph 27.
CHAIRPERSON: That is of his statement?
ADV VINCENT MALEKA SC: Of his statement, Chair. Page 12 paragraph 27. You
say if I may summarise your evidence that you then wrote to Mr Niven Pillay who is a
Director at least at that point in time of Regiments and called for him to explain these
transactions. Correct?
MR IAN HAMISH SCOTT SINTON: That is correct.
ADV VINCENT MALEKA SC: Your letter is at page 79. Correct?

20

MR IAN HAMISH SCOTT SINTON: That is correct.
ADV VINCENT MALEKA SC: What happened after you addressed this letter calling
for explanations of the transactions we have dealt with?
MR IAN HAMISH SCOTT SINTON: There were responses from Regiments in which
they indicated would take them a while to gather the information I had asked and they
asked for forbearance and eventually contacted me to say they would like a meeting.

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ADV VINCENT MALEKA SC: Yes.
MR IAN HAMISH SCOTT SINTON: To give us, to convey their response to my letter.
ADV VINCENT MALEKA SC: And that meeting as I have our statement took place on
6 October 2017. You say so in paragraph 28.
MR IAN HAMISH SCOTT SINTON: That is correct.
ADV VINCENT MALEKA SC: Yes. So it took them almost a month and three weeks to
gather the necessary information so that they could respond to you at that meeting.
Correct?
MR IAN HAMISH SCOTT SINTON: Correct.
10

ADV VINCENT MALEKA SC: Just take us through what happened at that meeting.
MR IAN HAMISH SCOTT SINTON: The meeting was held at Standard Bank’s Offices.
Regiments was represented by Mr Niven Pillay who for basic purposes was the Chief
Executive Officer and Mr Litha Nyhonyha who was a Director of Regiments and a
Mr John Rossouw who was described as being the Chief Operating Officer of
Regiments. I represented Standard Bank in that meeting and I was accompanied by
Ms Suzette Els is a Senior Compliance Officer of Standard Bank.
ADV VINCENT MALEKA SC: And you started to pose oral questions to them and they
responded orally?
MR IAN HAMISH SCOTT SINTON: Correct.

20

ADV VINCENT MALEKA SC: Can you just give us a sense of the oral questions you
posed?
MR IAN HAMISH SCOTT SINTON: I basically as far as I can recall repeated my need
to understand what the source was of the deposits which seemingly came all from
Transnet and these payments that had been made. There were three companies that
we were interested in because we needed an explanation. One was Chivita Trading.

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The other was Homix and the third was an entity by the name of Kupanua Investments.
They explained to me that Kupanua Investments was an advisory company that they
had subcontracted work for at Transnet and the Director of that company is well known
to Standard Bank and we were satisfied that there was no need to pursue that enquiry.
As regards the other two however he explained to us that in or about October 2012
Mr Niven Pillay and Mr Eric Wood who were both Directors of Regiments at the time
had been invited to a meeting in Sandton Johannesburg by Mr Kuben Moodley who
was well known to Mr Niven Pillay and he had some form of arrangement whereby he
would look for the opportunity for Regiments in the Public Sector. When they arrived
10

for the meeting they met for the first time Mr Vikas Sagar who was introduced as being
a partner of McKinsey based in Johannesburg and Mr Salim Essa was at that meeting.
In summary it was explained to me that the people who, Mr Sagar and Mr Essa
explained that McKinsey had secured consultancy work with Transnet. That Transnet
required that McKinsey have a black owned supplier development partner for at least
30 percent of the work that had been allocated by Transnet and they were offering that
role to Regiments because Regiments was a black owned firm with the requisite skills.
However there was a condition attached to that and that is that Regiments was obliged
to pay 30 percent of all fees earned to Mr Salim Essa as a condition for getting this
appointment and.

20

ADV VINCENT MALEKA SC: Can I ask you to break it down?
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: You have talked about this meeting and at that meeting
they told you about the engagement of Regiments as DL partner of McKinsey in regard
to Transnet work?
MR IAN HAMISH SCOTT SINTON: Correct.

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ADV VINCENT MALEKA SC: For that partnership how much would Regiments have
earned?
MR IAN HAMISH SCOTT SINTON: Regiments could have earned 30 percent of the
fees to be paid by Transnet for that work. So for the consultancy contract awarded to
McKinsey, McKinsey would get to keep 70 percent and have include Regiments for the
other 30 percent.
ADV VINCENT MALEKA SC: Yes and you say there was a condition attached to that
relationship?
MR IAN HAMISH SCOTT SINTON: Correct.
10

ADV VINCENT MALEKA SC: What was the condition as far as?
MR IAN HAMISH SCOTT SINTON: That.
ADV VINCENT MALEKA SC: It was conveyed to you?
MR IAN HAMISH SCOTT SINTON:

For Regiments to be appointed as a supplier

development partner for work at Transnet Regiments had to agree to give 30 percent of
its fees i.e. 30 percent of the 30 percent.
ADV VINCENT MALEKA SC: Yes.
MR IAN HAMISH SCOTT SINTON: To Mr Salim Essa and they were not explained that
they also had an existing arrangement with Mr Kuben Moodley that he would be paid
five percent of all fees that might be earned from work with Public Sector entities. So
20

the effect of all of this was they had to agree to pay away 35 percent of their revenues
from Transnet work to five percent to Mr Moodley, 30 percent to Mr Salim Essa and
from there they went on to say that Chivita Trading and later Homix were the corporate
entities that had been put up by Messieurs Moodley and Essa as the entities to receive
that money.
CHAIRPERSON: So Transnet would pay Regiments a certain amount of fees for work

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done?
MR IAN HAMISH SCOTT SINTON: Correct Chair.
CHAIRPERSON: And Regiments would take 30 percent off their fees and pay to
McKinsey.
MR IAN HAMISH SCOTT SINTON: [Intervenes].
CHAIRPERSON: Is that right? The other way around?
MR IAN HAMISH SCOTT SINTON: No, not McKinsey.
CHAIRPERSON: Ja.
MR IAN HAMISH SCOTT SINTON: To Mr Salim Essa.
10

CHAIRPERSON: Oh, okay and then there were other entities in the picture that would
come after that as well?
MR IAN HAMISH SCOTT SINTON: Correct.
CHAIRPERSON: The last ones that you mentioned?
MR IAN HAMISH SCOTT SINTON: Yes. Mr Salim Essa nominated two companies to
receive the money that had been promised to him. Initially it was Chivita Trading and
there after it was Homix. The two entities that we have just been talking about.
CHAIRPERSON: Okay.
ADV VINCENT MALEKA SC: So Chair the pyramid is this. You have Transnet at the
top.

20

CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC:

It pays fees to two entities.

One is McKinsey, 70

percent of the fees earned. The remainder is 30 percent to Regiment.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: Regiment itself has to pay.
CHAIRPERSON: Fees.

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12 MARCH 2019 – DAY 64
ADV VINCENT MALEKA SC: 35 percent in total.
CHAIRPERSON: Ja.
ADV VINCENT MALEKA SC: 30 percent to Mr Essa and five percent to Mr Moodley.
CHAIRPERSON: Ja.
ADV VINCENT MALEKA SC: All of that Chair is said in express details at paragraph
28.1.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: And you will see Chair the fifth or sixth sentence from
the bottom, if you could read it Mr Sinton?
10

MR IAN HAMISH SCOTT SINTON: On page 13/
ADV VINCENT MALEKA SC: Yes.
MR IAN HAMISH SCOTT SINTON:

“Regiments informed us that they

accepted McKinsey’s offer and was constantly appointed as a
supplier development partner to Transnet with McKinsey for
consultancy work for Transnet. Regiment stated the amounts
transferred to Chivita and Homix…”
Which according to my calculations exceeded R210 million in aggregate with the bank
statements we have just been through.
“…were the agreed five percent for Mr Moodley plus the agreed
20

30 percent for Mr Essa.

Mr Pillay and Nyhonyha then

explained to us that without their knowledge subsequently
Mr Eric Wood agreed with Mr Essa to increase the amount due
to Mr Essa from 30 percent to 50 percent.”
So there was a time after this agreement was reached when half of Regiments revenue
from work at Transnet was being paid to Mr Essa.

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ADV VINCENT MALEKA SC: Alright.
MR IAN HAMISH SCOTT SINTON: In the form of Chivita and.
ADV VINCENT MALEKA SC: Yes.
MR IAN HAMISH SCOTT SINTON: And [intervenes].
ADV VINCENT MALEKA SC: We were not there and we can miss, we might miss a bit
of detail of the oral conversation that took place there.

From your evidence I

understand that this opportunity was introduced to Regiments by Mr Moodley?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: I can see his relevance to a discussion about whether
10

he should be paid something. Forget about whether or not that arrangement would be
lawful or not. Let us take that. He gets five percent of the 30 percent p aid to Regiment,
but someone else whose relevance in your explanation I do not pick up and that is
Mr Essa.
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Who gets the lion’s share of Regiments portion of fees,
30 percent?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Did you find out why that is the case? Firstly did you
find out who is Mr Essa? What is he doing in this relationship?

20

MR IAN HAMISH SCOTT SINTON: I did enquire as to why Regiments would agree to
pay a stranger who they just met for the first time 30 percent of the revenue earned
from a consultancy contract and they said, their understanding was that he had brought
about the whole opportunity to get work at Transnet and therefore this was his reward
for having secured the work at Transnet.
ADV VINCENT MALEKA SC: Did he explain what did he have to do?

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MR IAN HAMISH SCOTT SINTON: He did not offer any explanation. He just said that
he was told this was the, this was a condition of Regiments being appointed and t hey
were happy to pay it.
ADV VINCENT MALEKA SC: But Mr Sinton I mean you know that Transnet is a state
owned entity which is obliged under Section, I think it is Section 51(1) paragraph A.III or
its equivalent to procure goods and services through a public open procurement
process unless there are exceptional circumstances.
MR IAN HAMISH SCOTT SINTON: Mr Maleka I am very aware of that.
ADV VINCENT MALEKA SC: Yes.
10

MR IAN HAMISH SCOTT SINTON: So what was relevant is our surprise at the open
admission that he had agreed to give up 30 percent of the revenue to a person who had
no mandate from Regiments to find business in the first place. If he had any mandate
at all it would have come from McKinsey, but certainly not what they told me not from
Regiments. Secondly you are correct that to get work at Transnet you would expect
there would be either an open competitive tender or a negotiated I think it is called a
confinement arrangement where it is done due to urgency and this did not seem to be
like one of those.
ADV VINCENT MALEKA SC: If.
MR IAN HAMISH SCOTT SINTON: I therefore asked Regiments if they could explain

20

how as a professional firm they could give up 30 percent of their revenue and still
remain profitable. As I heard later they said in fact it was increased to 50 percent and
the answer he gave me was that the rates that McKinsey had negotiated with Transnet
without [indistinct] they were 400 percent more than would have been charged by
Regiments had they negotiated directly with Transnet.

So they felt they were

comfortable to pay away 30 percent of revenue. In those circumstances for us as the

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bank to be told that Transnet was paying 400 percent more than it needed to pay in
circumstances where the advisors were happy to give away up to 50 perc ent of the
revenue rang alarm bells, gave up red flags of the type that the crime prevention statute
say ought to be investigated.
ADV VINCENT MALEKA SC: Yes. I understand your position and I can understand
why ultimately you took the view that you had to terminate the banking contractual
relationship with Regiments, but what I do not still understand is this and I would like
your assistance if you could provide it to the Judge, because as you know the Judge
would like to get to the bottom of this.
10

How does Mr Essa procure work for a

professional consultancy entity which it itself could not do through the normal legal
lawful permissible processes?
MR IAN HAMISH SCOTT SINTON: I am afraid Mr Maleka I do not know the answer to
that, but he was handsomely rewarded for whatever he did do.
ADV VINCENT MALEKA SC: I am struggling to find out but what did he do. Did you
manage to find out yourself what did he do?
MR IAN HAMISH SCOTT SINTON: I was told only that he was the person responsible
for procuring this work at Transnet. What he did to get the work procured, I do not
know.
ADV VINCENT MALEKA SC:

20

Did they show you any tender submissions that he

would make?
MR IAN HAMISH SCOTT SINTON:

No.

ADV VINCENT MALEKA SC: Did they show you any projects or business processes
of Transnet which required professional services?
MR IAN HAMISH SCOTT SINTON:

In the meeting they explained, well we went on

other stuff which I deal with in my statement but in the meeting they explained why they

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paid Chivita Trading, why they paid Homix in terms of this arrangement and then they
also provided other information and at the end of the meeting I asked if they would
please reduce what they told us to writing so to get whatever supporting documentation
they had available to demonstrate what they said was the legitimacy of all of this and
that they (indistinct), so the only documentation we obtained in response to our
enquiries was given to us later in a letter from Regiments and I’ve included that in the
bundle.
ADV VINCENT MALEKA SC:

We’ll get to that later, can I explore one matter of detail

that you have dealt with in paragraph 28.2 of your statement and you said that they
10

indicated to you, that Mr Wood decided to increase Mr Essa’s share of the fees paid by
Transnet. Did you get details from them about how he increased it and why he
increased it?
MR IAN HAMISH SCOTT SINTON:

They claimed in the meeting they had no

knowledge of the increase, they say he was in control of the finances of the firm and he
set about doing this without their knowledge or consent and that was the subject matter
of later litigation. The best information I got was, in a subsequent letter they sought to
elaborate on that but that’s all they explained.
ADV VINCENT MALEKA SC: Alright let me take you to that letter, Chair you’ll find it
Annex IS8 of – from page 105.
20

CHAIRMAN: Yes I’ve got it.
ADV VINCENT MALEKA SC:

You will see that, that letter is dated 10 November

2017, correct?
MR IAN HAMISH SCOTT SINTON:

Correct.

ADV VINCENT MALEKA SC: And it is addressed to you?
MR IAN HAMISH SCOTT SINTON:

Correct.

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12 MARCH 2019 – DAY 64
ADV VINCENT MALEKA SC:

And it confirms the meeting that you held on the 6 th of

October 2017.
MR IAN HAMISH SCOTT SINTON:

Correct.

ADV VINCENT MALEKA SC: And then it is dealing with different headings, the first of
which is the relationship between Mr Moodley and Mr Essa, do you see that?
MR IAN HAMISH SCOTT SINTON:
ADV VINCENT MALEKA SC:

I do see that.

There’s a background to it which they give to that

relationship, can you deal with the background, you can read the letter if you want to or
you can summarise it.
10

MR IAN HAMISH SCOTT SINTON:

I would prefer to use their words if I may Mr

Maleka. “Kuben Moodley has been known to our Mr Niven Pillay they use – they call
him thereafter Niven, since 2005 initially as a golfing partner and subsequently in 2008
as a family friend. He approached Regiments in 2012 with a suggestion that we
consider procuring a strategic business partnership with an international consulting
firm. After discussing the suggestion between the Regiment’s directors there was
consensus to authorise Moodley to source a strategic global business partner. A
meeting was duly arranged by Moodley in October 2012 which Niven attended in
Sandton where he was introduced to Vikas Sagar a senior McKinsey partner. Sagar
was accompanied by Salim Essa and a strategic business partnership was discussed
20

which Sagar was happy to recommend to his McKinsey leadership. Regiments would
become a supplier development partner (sub-contractor) to McKinsey. In turn Moodley
and Essa would participate in an introductory revenue share in the sub -contract
revenue paid to Regiments”.
ADV VINCENT MALEKA SC:

Can I stop you there and ask you the following. It is

clear from this version of Regiment put down in writing that there was some relationship

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12 MARCH 2019 – DAY 64
between Mr Essa and Mr Vic Sagar of McKinsey.
MR IAN HAMISH SCOTT SINTON:

That is what we were told and that is confirmed in

this writing yes.
ADV VINCENT MALEKA SC:

What I want to ask from you is whether in any dealings

you had with McKinsey did you put this part of the relationship to them and if so what
was the response of McKinsey?
MR IAN HAMISH SCOTT SINTON:

I never put this particular relationship to them,

but I did urge them to include in their investigations being conducted the circumstances
under which the relationship between Regiments, McKinsey and Transnet arose. I
10

urged them to include that as part of their investigations, I didn’t actually refer them to
this letter, this letter was marked privileged and confidential, I thought it would be
dangerous for us to…
ADV VINCENT MALEKA SC:

No I understand the disclosure of confidence is one

thing but an investigation of a relationship of concern to you from your supplier is a
totally different matter.
MR IAN HAMISH SCOTT SINTON:
ADV VINCENT MALEKA SC:

Correct.

Yes, alright you say you did not raise that in these

terms?
MR IAN HAMISH SCOTT SINTON:
20

Not in these terms but I did urge them to pay

particular attention to how this relationship came to be established as part of their own
investigation.
ADV VINCENT MALEKA SC: Yes, the next issue that I’d like to ask you before your
proceed is on their own understanding, when I say their own understanding I mean
Regiments understanding they describe the division of revenue Regiments earns from
Transnet as a revenue sharing arrangement. Now I know that English is not my

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12 MARCH 2019 – DAY 64
language but that’s a fundamental different structure of dividing up revenue from paying
a fee, do you see that?
MR IAN HAMISH SCOTT SINTON:

I can understand the legal distinction but in the

hands of a professional firm fees earned is revenue, it’s the same thing.
ADV VINCENT MALEKA SC:

Yes and revenue is important because it doesn’t matter

what costs you incur to generate revenue, whatever costs you incur to generate
revenue doesn’t matter, as long as the revenue is there you divide that revenue
regardless of the costs required to generate that revenue.
MR IAN HAMISH SCOTT SINTON:
10

Correct.

ADV VINCENT MALEKA SC: Yes, so this scheme implied that if anything is to be said
about the description that Regiment would go and earn money, it does not matter what
the cost of raising that revenue is and simply divide it on the ratios that you have
indicated, 5% and 30% to both Mr Moodley and Essa respectively.
MR IAN HAMISH SCOTT SINTON:
ADV VINCENT MALEKA SC:

That is correct.

Did you ask them why this is the case, I mean it’s

something odd for a stranger outside a discussion you had and for them to con firm in
writing that arrangement?
MR IAN HAMISH SCOTT SINTON:

Their explanation, I did ask, as I said, on what

basis a professional firm could give away 30% of revenue and still be sustainable and
20

they said because the amount being earned was so excessive that they could afford
that but once Mr Wood increased the amount to 50% they started incurring losses, that
was the explanation.
ADV VINCENT MALEKA SC: Yes so in their explanation, they were quite comfortable
because on an open and public tender process they would not code the fees that
McKinsey had arranged for them.

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12 MARCH 2019 – DAY 64
MR IAN HAMISH SCOTT SINTON:

That was my understanding of their explanation

yes.
ADV VINCENT MALEKA SC:

Chair I believe that some of us would have to leave law

and go to the business consultancy world.
CHAIRMAN: Well, let’s continue Mr Maleka.
ADV VINCENT MALEKA SC:

Alright do you want to proceed Mr Sinton under the

heading Regiment due diligence on Essa?
MR IAN HAMISH SCOTT SINTON:

It says here, “at the time Essa was unknown to

Regiments, he had no business or political profile based on our google search on his
10

background, there was no hint of any Gupta association. Regiments had no reason to
decline these strategic business partner opportunity on account of Essa’s participat ion”.
ADV VINCENT MALEKA SC:

Can I stop you there and ask you this, did you accept

this explanation by Regiment representatives that at that point in time, and I’m talking
around 6 October 2017, there was nothing in the public domain or open source
information, giving a hint of who Mr Essa was?
MR IAN HAMISH SCOTT SINTON:

I think, Mr Maleka what he’s trying to say is that

when they met Mr Essa in 2012 there was at that stage, they had no reason to suppose
that he had any Gupta relationship. It was, frankly not something that was persuasive to
us, we believe that securing work with a State owned enterprise, whereas a condition of
20

getting the work you need to pay a stranger 30% of revenues of itself, whether that
stranger is known to you or not or has a reputation or not is – ought to be a red flag and
to proceed with that arrangement, I think was – would be, based on my experience in
other jurisdictions, would be considered by the authorities as knowing participation in
suspicious transactions.
ADV VINCENT MALEKA SC:

I really understand your explanation around how they

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12 MARCH 2019 – DAY 64
used the date of 2012 as a basis that, at that point in time there was not publically
available information to give them a hint but I’m going to take you to parts of this
explanation which shows that they maintained this relationship with Mr Essa
progressing to even a different form of revenue services that took place well after 2012.
MR IAN HAMISH SCOTT SINTON:

That certainly seems to be their – that seems to

be correct yes.
ADV VINCENT MALEKA SC:

Yes and therefore that explanation cannot stand. My

invitation to you is, were you satisfied with the explanation?
MR IAN HAMISH SCOTT SINTON:
10

No.

ADV VINCENT MALEKA SC: Anyway we’ll get to other revenue sharing schemes that
took place well after 2012. Under the heading McKinsey due diligence and Regiment,
what explanation do they give?
MR IAN HAMISH SCOTT SINTON:

They say “the McKinsey due diligence of

Regiments was conducted and approved by their international office. Regiments was in
turn duly approved as one of its supplier development partners alongside a number of –
the other existing sub-contractor relationships”.
ADV VINCENT MALEKA SC:

So McKinsey was quite satisfied about the property

and propriety of Regiment as a partner, from what they told you?
MR IAN HAMISH SCOTT SINTON:
20

ADV VINCENT MALEKA SC:

That’s what they told us yes.

Yes, Chair that issue will become important when we

look at subsequent McKinsey relationships with (indistinct). Subject to your views M r
Sinton, I’m going to ask you to jump to the last heading on page 106 which talks about
the role of McKinsey.
MR IAN HAMISH SCOTT SINTON:
ADV VINCENT MALEKA SC:

Yes.

Do you want to deal with that?

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12 MARCH 2019 – DAY 64
MR IAN HAMISH SCOTT SINTON:

Yes, again I prefer to read out their explanation,

“in terms of the agreement McKinsey would be responsible for procuring contracts with
clients, this would include fee negotiations and more specifically approval of all sub contract fees allocated to and billed by Regiments under the contract. They would also
retain ultimate leadership of any client relationship together with ultimate leadership
over any contract”.
ADV VINCENT MALEKA SC: And then over the page.
MR IAN HAMISH SCOTT SINTON:

“McKinsey would specify resource requirements

from Regiments and would retain ultimate quality assurance of all Regiments client
10

work product. They would further ensure transfer of skills to Regiments staff and
contract resources throughout the engagement”.
ADV VINCENT MALEKA SC:

Yes I have asked you to deal with that part of their

explanation because on their own explanation it is McKinsey who’s doing the hard
labour of procuring business for them. It is McKinsey who’s doing the hard work of
negotiating the fees. I don’t see anything that Mr Essa and/or Mr Moodley do in this
regard to procure business for Regiment.
MR IAN HAMISH SCOTT SINTON:

Again, my understanding from the meeting I had

with Regiments and it’s partly confirmed elsewhere in this letter, apart from the initial
introduction of Regiments to Transnet and McKinsey Mr Essa played no further role, he
20

provided no further services in this relationship.
ADV VINCENT MALEKA SC:

And that’s the point Mr Sinton that they’re paying an

introduction fee of 30% initially, later 50% just for the pure introduction and nothing
more.
MR IAN HAMISH SCOTT SINTON:
ADV VINCENT MALEKA SC:

Correct.

Subject to your guidance, I’m going to ask you to deal

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with the question of fees which is discussed from almost the middle of that page.
MR IAN HAMISH SCOTT SINTON:

“Fees and expenses, all proportioned Regiment

fees would be agreed between McKinsey and their client on a mandate by mandate
basis. This would range between 30% to 50% of the McKinsey/client contract value as
determined between the parties. The resources provided by Regiments and work done
was also commensurate with the fees allocated. Expenses were billed individually by
the respective parties as incurred. The attached Annexure A outlines the agreement
between McKinsey and Regiment relating to four of the key mandates which Regiments
worked on”.
10

ADV VINCENT MALEKA SC: Chair you’ll see the key mandate set out in Annexure A,
begin from page 114 and they are identified on page 115 with reference to specific
requests for proposal RFP37, 38, 39 & 40 2014.
CHAIRMAN: Yes.
ADV VINCENT MALEKA SC:

But what is important Chair in relation to this is that the

relationship does not end there it continues as set out in paragraph 1.2, can you go to
paragraph 1.2 page 115.
MR IAN HAMISH SCOTT SINTON:

Yes this is the consortium agreement that they

said had been concluded between Regiments and McKinsey. In paragraph 1.2 it reads
as follows, “Regiments and McKinsey have agreed to combine their resources, skills
20

and information and form a consortium to be known as the Regiments McKinsey
consortium for purposes of responding to the RFP’s and performing the services
required under any contracts to be executed by Transnet and/or Regiments and/or
McKinsey in respect of the work set forth in the RFP’s defined as the contracts.
ADV VINCENT MALEKA SC:

Then part of the relationship between those parties,

highlights the fact that it’s a JV between two entities for the present mandate and future

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mandate arising from Transnet (indistinct) and that does not provide for a third party to
come into the JV.
MR IAN HAMISH SCOTT SINTON:
ADV VINCENT MALEKA SC:

Correct.

Yes, Chair I’m just going to draw your attention to other

parts of the JV agreement I’m not going to ask Mr Sinton to deal with th em.
CHAIRMAN: Okay.
ADV VINCENT MALEKA SC: The first is page 114 paragraphs 4.1 and 4.2 and then
the next is page 119 paragraph 6 which is the implementation methodology of the JV
through an executive committee comprising two directors each from the JV partners.
10

CHAIRMAN: I’m sorry Mr Maleka you’re – I thought you had said 114 but I referred to
paragraphs 4.1 and 4.2 but I think you must have said 118 is that right?
ADV VINCENT MALEKA SC:

118.

CHAIRMAN: Because that’s where 4.1 and 4.2 are.
ADV VINCENT MALEKA SC: Indeed, my apologies.
CHAIRMAN:

Okay I got the page the wrong okay and next after those two

paragraphs?
ADV VINCENT MALEKA SC:

Is how the partners implement the JV arrangement,

first they establish an executive committee, you will see on page 119 and they give you
the name and numbers from paragraph 621 and it goes to paragraph 624 and the
20

names are important Mr Sinton because you have dealt with some of them. You’ve
dealt with Mr Pillay who attended the meeting and gave you the explan ation and you’ve
dealt with, I think Mr Vikas Sagar correct?
MR IAN HAMISH SCOTT SINTON:
ADV VINCENT MALEKA SC:

Correct.
So they were part and parcel of this executive

committee.

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12 MARCH 2019 – DAY 64
MR IAN HAMISH SCOTT SINTON:
ADV VINCENT MALEKA SC:

Correct.

They understood the relationship?

MR IAN HAMISH SCOTT SINTON:
ADV VINCENT MALEKA SC:

Yes.
And then on page 121 paragraph 6.9 is the

responsibilities of the executive do you see that?
MR IAN HAMISH SCOTT SINTON:
ADV VINCENT MALEKA SC:

Yes.

I’m not going to ask you about it and then I’d like to

take you to the termination clause on page 128. Sorry before I do that Chair, my
apology, before I do that, can I ask you to go to page 124 paragraph 9.1 are you there?
10

MR IAN HAMISH SCOTT SINTON:
ADV VINCENT MALEKA SC:

I am yes.

It is an exclusivity provision which is quite key to that

relationship, do you see that?
MR IAN HAMISH SCOTT SINTON:
ADV VINCENT MALEKA SC:

Correct.

And as I read it, or maybe let me read it out, “the

parties in respect of the object of the consortium as described in the recitals and clause
4.1 (indistinct) shall work exclusively together and shall not in any manner whatsoever,
either now or at a future time, attempt to circumvent same in any of the transactions
either entered into or which the respective parties are desirous of entering into as
contained in this agreement”.
20

So they seal their marriage with that exclusive

arrangement that neither party would do what the purpose of the agreement requires.
MR IAN HAMISH SCOTT SINTON:

Correct.

ADV VINCENT MALEKA SC: In the context of that exclusivity provision can I take you
to the termination clause on page 128, you will see that there’s a normal termination
clause in 13.3 – 13.1 I’m sorry and 13.3 provides for a remedy at an instance of an
innocent party, do you see that?

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MR IAN HAMISH SCOTT SINTON:
ADV VINCENT MALEKA SC:

Yes I do.

“It provides that the innocent party, shall in the event of

it cancelling this agreement in accordance with clause 12 above, be entitled to submit a
response to the RFP with the other defaulting party”. So this is the only time when a
party to the marriage would be entitled to go it alone for future business, correct?
MR IAN HAMISH SCOTT SINTON:

Correct.

ADV VINCENT MALEKA SC: Yes, so Chair, that is the nature of the arrangement –
contractual arrangement that has been explained to Mr Sinton by the directors of
Regiment at page 107. Mr Sinton I’m going to ask you to complete the explanation
10

given by Regiment in relation to Mr Moodley at page 107 that is at the bottom.
MR IAN HAMISH SCOTT SINTON:

Yes, “Moodley provided the idea of seeking out a

strategic business partner to grow the Regiments strategy advisory business. At the
time Regiments already had a strategy advising business Burlington which
complimented the client solution value offering provided by the Regiments debt capital
market advisory division. He also provided introduction to Essa/McKinsey that gave
rise to the revenue opportunity. In exchange he would be entitled to a 5% introductory
revenue participation share that flowed from the McKinsey sub-contracts and other
resultant business. Regiments struck a normal business relationship with Moodley to
this affect in terms of which agreement Moodley would nominate an entity/account into
20

which payments would be received, McKinsey was aware of this arrangement”.
ADV VINCENT MALEKA SC:

Did you put this version of Regiments to McKinsey?

MR IAN HAMISH SCOTT SINTON:

No I didn’t.

ADV VINCENT MALEKA SC: Okay is there an explanation why you did not?
MR IAN HAMISH SCOTT SINTON:

I thought it – by the time I received this

information we had already terminated dealings with McKinsey, there was no need to

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keep belabouring the point we had exited the relationship so I did, as a courtesy call
upon them to include all the circumstances surrounding this appointment in their own
investigations, for their own benefit. There’s no rationale for me to put it to them after
the relationship had been terminated.
ADV VINCENT MALEKA SC:

Yes but the point is, you’d be aware, at that point in

time that Regiments takes a view that the revenue sharing scheme between it and Mr
Moodley was something that was known to its partner, McKinsey and we have looked at
the contractual relationship between McKinsey and Regiments, it does not make
provision for this 5% revenue sharing scheme.
10

MR IAN HAMISH SCOTT SINTON:
ADV VINCENT MALEKA SC:

That is correct.

If on the version of Regiments, McKinsey would be

aware of a revenue sharing scheme which falls outside their contractual relationship,
what would you have expected Regiments to do in relation to its partner about
something outside the terms of the agreement?
MR IAN HAMISH SCOTT SINTON:

I would have assumed that Regiments had

disclosed this to McKinsey, I wouldn’t expect them to have a so-called silent partner
that McKinsey was unaware of.
ADV VINCENT MALEKA SC:

Maybe that’s the reason why they say that McKinsey

was aware of this, anyway lets deal with the heading Regiments to Essa.
20

MR IAN HAMISH SCOTT SINTON:

“It was Essa who brought McKinsey to the

relationship notwithstanding the introduction facilitated by Moodley. In exchange Essa
would be entitles to a 30% introductory revenue participation share that flowed from the
McKinsey sub-contracts and other resultant business. Regiments struck a normal
business relationship with Essa to this effect in terms of which agreement Essa could
nominate an entity/account into which payments would be received, McKinsey was

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12 MARCH 2019 – DAY 64
aware of this arrangement”.
ADV VINCENT MALEKA SC: Alright, they keep on emphasising both in relation to Mr
Essa and in relation to Mr Moodley that McKinsey was aware of that.
MR IAN HAMISH SCOTT SINTON:
ADV VINCENT MALEKA SC:

Correct.

I mean it’s not a mere matter of throwing an idle line it’s

a point of emphasis.
MR IAN HAMISH SCOTT SINTON:
ADV VINCENT MALEKA SC:

Correct.

Yes, did you ask them what entities did each of Mr

Moodley and Mr Essa nominate for the payment of their share of the revenue?
10

MR IAN HAMISH SCOTT SINTON: I did ask them in the meeting and they told me it
was Chivita and then Homix. If you look to page 110 you’ll see they deal with that.
ADV VINCENT MALEKA SC:

110?

MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: Oh I see payments to Chivita – Chair are you there at
page 110?
CHAIRMAN: I’m going there, yes I’m there.
MR IAN HAMISH SCOTT SINTON: It reads:
“Chivita was the entity nominated by Moodley/Essa to receive
their introductory revenue share participation with regard to the
20

McKinsey relationship. It needs to be noted that these payments
of the agreed 35% to Chivita [and Essa nominated entity]
included the 5% due to Moodley paid to him in turn by Essa. We
have not yet been able to locate a formal agreement with Chivita
to this effect but our investigation is ongoing. We suspect in the
absence of an agreement that Wood in his capacity as the

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nominated Regiments official for the relationship discussed and
agreed to this with Essa orally.”
ADV VINCENT MALEKA SC: So all of this thing boils down to an oral agreement?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Alright. Can I take you back to an explanation they give
around their involvement in the so called 1064 locomotive engagement by Transnet? I
will be quick on this because Chair this is a matter which is going to be presented to
you in detail by our colleagues for Transnet. It is at page 108. All I want you to confirm
there is the second last paragraph. Are you there?
10

MR IAN HAMISH SCOTT SINTON: Yes I am yes.
ADV VINCENT MALEKA SC: Yes. Can you confirm what they told you in regards to
this locomotive project?
MR IAN HAMISH SCOTT SINTON: Do you want me to repeat what they say here or
give what they told me in the meeting as well?
ADV VINCENT MALEKA SC: You prefer to read their version.
MR IAN HAMISH SCOTT SINTON: Their version here is:
“The 1064 mandate was awarded to McKinsey and Regiments
was initially not a party to it. On very short notice Regiments
was requested by McKinsey to assist with financial risk

20

modelling. Shortly thereafter the remainder of the mandate was
assigned to Regiments.”
ADV VINCENT MALEKA SC: Alright.
MR IAN HAMISH SCOTT SINTON:
“The attached copies of the relevant LIO letters and session and
correspondence which gave effect to this arrangement.”

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12 MARCH 2019 – DAY 64
ADV VINCENT MALEKA SC: Alright can I ask you to go to page I think it is 1110 and
deal with the heading “Amendment to Business Development Partner Agreement”
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC:
“Eric Wood was the named relationship director in relation to
Moodley/Essa. In November 2013 he unilaterally increased their
introductory

revenue

participation

percentage

on

the

McKinsey/Transnet mandate and other revenue streams to 50%.
This increase which resulted in Regiments incurring losses on
10

some of the mandates was executed by Wood without any
reference to or consultation with the other two Regiments
directors. Wood also diverted these payments due to Moodley
and Essa from Chivita to Homix in early 2014. Wood was able to
withhold these material facts given that he communicated solely
with Essa at all times and had responsibility of control of the
finance department of Regiments Capital. When he became of
this change around August 2015 when media reports around
Homix surfaced and the Regiments head of compliance
challenged Wood on why payments were being made to this

20

entity.”
ADV VINCENT MALEKA SC: Yes. I am going to end their response by dealing with a
matter where Regiment confirmed to you that it did execute mandates from Transnet of
its own without the involvement of McKinsey. And I do so in the context of what you
said they told you on the introduction fee that they paid to both Mr Moodley and Mr
Essa. It is to be found at page 109 under the heading “Regiment/Transnet Mandates”

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12 MARCH 2019 – DAY 64
do you see that?
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: Can I ask you to please deal with that section.
MR IAN HAMISH SCOTT SINTON:
“Over the same period Transnet ran several RFP processes
independent of any work McKinsey was procuring. Regiment
responded to various RFP’s and won two mandates. One is
numbered for the design and implementation of new best
practice framework for Transnet second divined benefit pension
10

fund and the other one advisory services in respect of Transnet’s
participation in the Maputa Corridor Development. Even though
our revenue share partners in the form of Moodley and Essa
were not involved in these procurement processes it was
determined that Regiments should honour the revenue share
arrangement in his mandates as well on the basis that absently
the reduction to McKinsey Regiments would not have been well
placed to win these contracts.”
ADV VINCENT MALEKA SC: I am sure you read this before?
MR IAN HAMISH SCOTT SINTON: I have Mr Maleka.

20

ADV VINCENT MALEKA SC: It does not make sense at all. Can I put the following to
you to you to see whether or it made sense or not to you but for me it does not make
sense. Firstly this thing has nothing to do with the introduction by the tw o gentlemen to
McKinsey because Regiments goes of its own bat to secure this work without McKinsey
on their own so say. Correct?
MR IAN HAMISH SCOTT SINTON: Correct.

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12 MARCH 2019 – DAY 64
ADV VINCENT MALEKA SC: There is not even a basis to talk about the revenue
sharing arrangement here?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: But yet they do it. And they do it on the basis that they
were introduced by McKinsey by these two gentlemen, correct?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: But this job that they have got and the two mandates
have nothing to do with the introduction on their own explanation.
MR IAN HAMISH SCOTT SINTON: Correct.
10

CHAIRPERSON: They must have been very happy with whatever it is that these two
people had done overall to firstly give them such a big percentage of their fees when
these people apparently were not doing anything other than that on their version they
had introduced them. And to now they find they get other work without any contribution
from these two but they still go and want to share their fees with them simply on the
basis that they did introduce them in regard to work for which they were giving them a
lot of money.
ADV VINCENT MALEKA SC: Chair the intention of this letter was to persuade us that
the relationship they had was an innocent business like one. I can understand the
attention they did not succeed.

20

CHAIRPERSON: Are they doing a very good job?
ADV VINCENT MALEKA SC: Mr Sinton I mean anyone who reads this paragraph of
their version will come to the conclusion that they are not telling you the full truth that
there is something they withholding from you. The question is what did you do to look
into this version? Did you press them about an explanation on why this version does
not make sense?

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12 MARCH 2019 – DAY 64
MR IAN HAMISH SCOTT SINTON: Mr Maleka we found the explanation to be our
requirement is they needed to allay our concerns that their relationship – that the work
that they secured with Transnet and for which they were paying these what we th ought
were exorbitant introductory fees or sharing the revenue we found it implausible and
our remedy was to terminate the relationship so we do not want to deal with you any
longer.
ADV VINCENT MALEKA SC: Yes.
MR IAN HAMISH SCOTT SINTON: We did not have a debate about the plausibility or
not we just said we cannot accept this we are not – we are terminating the relationship.
10

CHAIRPERSON: So would it be correct to say that your attitude was that once you had
reached the conclusion that this – these transaction, this relationship that they had did
not satisfy you and that you would terminate the relationship you ceased to have an
interest in getting to more explanations or not really?
MR IAN HAMISH SCOTT SINTON: Suffice to say Chair that when we analysed what
the accounts what we had been told in the meeting which we had where we had oral
information when we had a look at the explanations provided here we complied with our
statutory obligations and we took a decision to terminate all future dealings with
Regiments. We did not seek to engage further we did not think it was our responsibility
to prove our suspicions correct or not we thought they were justified and on the basis of

20

that justification we terminated the relationship.
CHAIRPERSON: I got the impression earlier on when you were giving your evidence
with regard to what transpired at the meeting you had with them I got the impression
that before the end of that meeting you may have taken the view already that unless
the written explanation that they were going to send unless it came up with something
different from what they were telling you you could not see your way – you’re the bank

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continuing to have a relationship with them. I thought you
MR IAN HAMISH SCOTT SINTON: Yes.
CHAIRPERSON: May have misunderstood you but I thought you almost said you know
we realise that we just could not continue because what we are being told does not
satisfy us.
MR IAN HAMISH SCOTT SINTON: Yes Chair it is not my sole decision as to whether
we terminate or not but to the extent that I was the senior person representing the bank
in that meeting the ready admission that they had agreed to pay away 30% of all
revenue all earned from their work with Transnet when Transnet is an SOE obliged to
10

procure work and a cost effective transparent manner I find alarming and I conveyed
that to my colleagues at the bank. We gave them the opportunity to make written
representations which is this document and then the summary of the meeting this
representation was put before a committee of the bank that considered them and said
we can no longer keep dealing with Regiments.
CHAIRPERSON: But would I be correct if I said that as far as you are concerned at the
meeting, when you left that meeting if it was up to you to make the dec ision your
attitude having heard what they had to say your attitude was unless that written
explanation comes up with something different from what I have been told this
relationship must come to end?

20

MR IAN HAMISH SCOTT SINTON: Yes Chairman if I may Mr Maleka might still intend
to go there but what also was discussed in our meeting that we had I as was is the
custom I asked them to if they had any comment on reports that they had in their
capacity as advisor to Transnet advised Transnet to increase the purchase price for
locomotives there was this famous 1064 new locomotive contract that Transnet had
issued tenders for and that tenders had come in and it had been reported that the

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tenderers had tender prices of roughly 29 to 30 million per locomotive and t hat these
had been, prices had been post tender increased to roughly I think R40 million per
locomotive and I asked Regiments if they had been involved and explained that initially
McKinsey were appointed to advise on that contract but that McKinsey pulled out at
short notice and they took over. So they were – they were advised that they were
indeed advisors on that contract and yes they had confirmed to me they had advised
Transnet to agree to an increase in the tender prices. They told me that the reason was
that they had worked out that it would be in Transnet’s interests to agree to an
increased price because the tenderers either suppliers of locomotives had agreed to
10

assume foreign exchange risk and they thought that was good advice. I then referred
them in the meeting to again other media reports supported by documentation to the
effect that that Mr Salim Essa the same Mr Salim Essa who was on their sharing
revenue stood to earn 21% of all monies paid by Transnet for the new locomotives and
I said did you, what is your comment on this that your silent partner as advisor is
benefitting now as advisor to the tenderers. And they said they had no knowledge of
the newspaper reports let alone the involvement with Mr Essa and that. Now I found
that extremely difficult to believe it was – it was very much publicised at the time it was
a talking point and for them to be a long time advisory Transnet and not be aware of
these very serious allegations in the media or pretend not to be aware of them I find it

20

extremely difficult to believe and that was another factor on top of the fact that they
were paying it that as you say caused me to leave that {indistinct] thing I do not think
we can proceed with a relationship with these people.
CHAIRPERSON: Thank you.
ADV VINCENT MALEKA SC: And just to sought some details from you in that regard
consistent with your statement the media reports you wanted them to look at and

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comment on about the fact or the report that Mr Essa stood to gain handsomely from
this locomotive project is at page 100.
MR IAN HAMISH SCOTT SINTON: Yes that is correct that is one of them ja.
ADV VINCENT MALEKA SC: The point about it is that it is dated 1 June 2017 and
your meeting is around 6 October 2017 which is almost three months later, corre ct?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: So if any ignorance there existed about this it would
have run for a period of three months.
MR IAN HAMISH SCOTT SINTON: Correct.
10

ADV VINCENT MALEKA SC: I find it strange that a management consulting company
would be unaware of this set of media reports for a period of three months relating to
one of its clients?
MR IAN HAMISH SCOTT SINTON: Relating to a contract which they advised on for
one of its clients?
ADV VINCENT MALEKA SC: Yes.
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: Yes.
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: I mean they are doing the same job. The media reports

20

on the same job and it raises serious questions about that job.
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: I find it difficult for that explanation that they would not
be aware but anyway I am sure our colleagues from Transnet who are dealing with
Transnet will test that issue Chair. And if go back to your statement in relation to that
part of the conversation you had with them about the locomotives in your statement you

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12 MARCH 2019 – DAY 64
say something more and something far more emphatic than your oral explanation a
moment ago to the Chairperson. I would like to draw attention to paragraph 28.6 where
you deal with the locomotives. Can I ask you to deal with it from the beginning of that
paragraph 28.6.
MR IAN HAMISH SCOTT SINTON: Would you like me to paraphrase or read it?
ADV VINCENT MALEKA SC: Read it because you a little more than what you said
previously in your oral testimony.
MR IAN HAMISH SCOTT SINTON:
“When asked to comment on whether the increase in the tender prices for the 1064
10

locomotives could have been motivated – sorry the background is they said that they
had recommended the increase in order to allow for forex risk. I said could the
increase have been motivated by corruption as claimed in the media and Regiments
reply was to the effect that the increase was justified by the successful tenderers
assumption of foreign currency risk but that the decision to purchase a 1064 new
locomotives was possible tainted by corruption. They said if there was corruption it was
not in our advice to increase the price it was possibly to the decision to buy so many
locomotives in the first place.”
ADV VINCENT MALEKA SC: Can I stop you there. I am sorry to do this to you but in
the ordinary course of events anyone in this country who harbours a suspicion of

20

corruption especially when it relates to state institutions such as Tran snet has a
fundamental statutory obligation that you are aware of correct?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: They tell you in the course of a meeting that they
harbour a possible suspicion around a deal in which they are advisin g which could
possibly have corrupt elements in it in the course of that meeting, correct?

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12 MARCH 2019 – DAY 64
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: They had a duty to raise that issue as you do in relation
to transactions. You have given the Chairperson Section 34 PRECCA reports because
you harboured some suspicions of corrupt dealings in relation to them, correct?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Did you ask them why did they – did they not report?
MR IAN HAMISH SCOTT SINTON: Mr Maleka I did not know if they did or did not
report this.
ADV VINCENT MALEKA SC: Okay.
10

MR IAN HAMISH SCOTT SINTON: They were simply expressing an opinion to me
when I asked do they think there was corruption in that transaction they said not in the
increase of the price but possibly in the decision to buy so many locomotives.
ADV VINCENT MALEKA SC: Indeed.
MR IAN HAMISH SCOTT SINTON: I had no knowledge as to whether they had
reported this to any authority or not.
ADV VINCENT MALEKA SC: But you would have expected them to do so if they were
fulfilling their statutory duties? I am not saying that you should have insisted that may
not be – that may not have been part and parcel of your job but I am saying you would
have expected them to do so.

20

MR IAN HAMISH SCOTT SINTON: Yes. Again it turns on the interpretation of Section
34. Section 34 talks of knowledge of corruption. I would hate to have to stand here
and say I think they had such knowledge. They certainly said if there was it was
possibly in the decision to purchase so many.
ADV VINCENT MALEKA SC: Can I test it this way. If you were in their position what
would you have done?

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12 MARCH 2019 – DAY 64
MR IAN HAMISH SCOTT SINTON: If we had been advisors to a client and come
across objective facts which justified a suspicion of corruption then we would have
deemed it necessary to report that under Section 34 of PRECCA
ADV VINCENT MALEKA SC: Alright is there anything that you would like to deal with
in 28.6 before I ask you to go to 28.7?
MR IAN HAMISH SCOTT SINTON: It is just that Chair the – when I asked why they
thought the decision to buy so many locomotives was tainted they informed me which I
did not know that Transnet had an existing fleet or functioning locomotives at the time
that South Africa’s rail network cannot accommodate more than 300 active locomotives
10

at a time and so for the company to go and buy another 106 when only 300 could be
used at any one time they thought was a decision worth investigating. But that was
simply a – in a meeting could have happened yes possibly for these reasons it was not
we believe it happened and expressed as a certain opinion.
ADV VINCENT MALEKA SC: Chair remember one of the witnesses gave us a useful
business experience about I think he used the phrase Just In Time. That you do not
buy goods in order to put them in the spare yard you buy them just in time when you
need them.
CHAIRPERSON: Ja I think I remember something I am not sure.
ADV VINCENT MALEKA SC: Yes.

20

CHAIRPERSON: Whether it was here.
ADV VINCENT MALEKA SC: It was here.
CHAIRPERSON: Oh okay.
ADV VINCENT MALEKA SC:

It was here I think it was Mr Ephron in fact as I

remember. MR IAN HAMISH SCOTT SINTON: Yes. Oh yes I – well I do not know if it
was him but you – I think you are right to say it was here.

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12 MARCH 2019 – DAY 64
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: Ja.
ADV VINCENT MALEKA SC: Yes, yes. So on their explanation they bought more
than 700 locomotives which are not going to be used just in time.

But anyway

something that the commission will explore Mr Sinton. I had invited you to conclude
with the explanation to you from paragraph 28.7.
MR IAN HAMISH SCOTT SINTON: Yes. As the meeting came to an end Regiments
as it were complained that they had been offered the role of supply development
partner to McKinsey at Eskom for work to be undertaken by McKinsey at Eskom they
10

would on the same terms and conditions i.e. they would get 30% of the work allocated
and they would give a third to Mr Essa. That they staff of Regiments actually
commenced work alongside McKinsey staff at Eskom and then in anticipation of this
agreement being concluded and then Mr Wood left Regiments to join Mr Essa at Trillian
and McKinsey appointed Trillian as their supply development partner rather than
Regiments and Regiments did not get paid for the work they had done and they
complained to me that they felt they had been badly treated by not even been paid for
the work they had done in anticipation of getting that appointment.
ADV VINCENT MALEKA SC: Chair that is an issue we will deal with later on on the
terms of the understanding we have with McKinsey. I am not going to deal with it now.

20

CHAIRPERSON: Okay.
ADV VINCENT MALEKA SC: If you could go to page 16 of your statement Mr Sinton.
You have dealt with the major parts of it I will ask you to deal with something new in
that statement which begins from the last sentence and it begins in the fourth last line
of that paragraph.
MR IAN HAMISH SCOTT SINTON: Yes in the first part I refer to the letter we have just

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been dealing with and I point out how it confirmed what had been told to us in the
meeting. But I also mention that another note where the aspect is that the letter
includes a copy of a letter in which Mr Anoj Singh then Transnet group chief financial
officer purports to give Transnet’s consent to Regiments replacing Nedbank as an
advisor on the locomotive acquisitions at the request of McKinsey. And it really – the
relevance is they had invoked that letter as evidence of the fact that they had been
brought in to this transaction after the – a mandate had already been awarded and they
replace Nedbank as advisor and in fact the evidence was in due course McKinsey
themselves dropped out and Regiments took over the lead role.
10

ADV VINCENT MALEKA SC: In your documents you give us doc – some documents
relating to the replacement of Nedbank by Regiments I remember I came across them.
MR IAN HAMISH SCOTT SINTON: It is an annexure to the letter.
ADV VINCENT MALEKA SC: Is page – thank you. I believe it is page 136.
MR IAN HAMISH SCOTT SINTON: That is correct yes.
ADV VINCENT MALEKA SC: The letter is dated 19 November 2013 do you see that?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: And it records that Nedbank was replaced because of
some conflict of interest.
MR IAN HAMISH SCOTT SINTON: Correct.

20

ADV VINCENT MALEKA SC: And then McKinsey has agreed to replace Nedbank with
Regiments because it is in the best interest of Transnet I am reading paragraph 5.
MR IAN HAMISH SCOTT SINTON: Yes. And the point I was making in paragraph 6
this letter says:
“This

letter

serves

confirmed

Transnet’s

agreement

to

McKinsey’s request for Regiments Capital to provide the required

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service in the place of Nedbank.”
ADV VINCENT MALEKA SC: Yes and there I do not see these arrangement about
revenue sharing because the client agrees to the replacement.
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Yes. There is another letter which follows that one it is
dated 20 January 2014 it is from Transnet in fact it records an agreement between
Transnet and Regiments. It is on page 137.
MR IAN HAMISH SCOTT SINTON: Sorry it is to Transnet from Regiments.
ADV VINCENT MALEKA SC:
10

Yes.

From Transnet to Regiments which is dated

24 January 2014. Do you see that?
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: And it is signed on page 140 by Transnet. Do you see
that?
MR IAN HAMISH SCOTT SINTON: I do see it, yes.
ADV VINCENT MALEKA SC: Also by Regiments. Do you see that?
MR IAN HAMISH SCOTT SINTON: Correct, yes.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: So that letter starts at 137, Mr Maleka?
ADV VINCENT MALEKA SC: Yes Chair.

20

CHAIRPERSON: Ja, okay. I seem to have heard 127. So I went to 127.
ADV VINCENT MALEKA SC: My apologies.
CHAIRPERSON: I could not find it. So, ja.
ADV VINCENT MALEKA SC: 137.
CHAIRPERSON: Okay.
ADV VINCENT MALEKA SC: Yes. Again you will see that it is a contract between

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Regiments and Transnet on the locomotives project. Do you see that?
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: And it recalls the terms. I am not going to you through
them, but what is quite clear is that Transnet is engaging Regiments for that project and
the fee structure is set out on page 138. Do you see that, paragraph 2.1?
MR IAN HAMISH SCOTT SINTON: Yes, I see that.
ADV VINCENT MALEKA SC: It is a fixed fee and also a performance fee. Do you see
that?
MR IAN HAMISH SCOTT SINTON: Correct.
10

ADV VINCENT MALEKA SC: Yes and these are the fees that are paid to no one, but
Regiments by Transnet. Correct?
MR IAN HAMISH SCOTT SINTON: Mr Maleka I have a difficulty; that is what the typed
portion of the document says.
ADV VINCENT MALEKA SC: Yes.
MR IAN HAMISH SCOTT SINTON:

That the parties are Transnet and Regiments.

That the fee structure is as set out, but you will see after the signature.
ADV VINCENT MALEKA SC: Yes.
MR IAN HAMISH SCOTT SINTON:

Somebody has written in under the Transnet

signature:
20

“[Indistinct] to items listed below.”
ADV VINCENT MALEKA SC: Yes.
MR IAN HAMISH SCOTT SINTON: And there it says:
“The contract for the supply of these services is with McKinsey
and Regiments capital is contracted to them. Items of Section
2, there will not be a performance fee for fundraising. Thus

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2.1.2 will be removed, expenses will be capped at…”
I think.
“…10 percent and paid on approval. Payment will be made to
McKinsey.”
I do not know what this means, because it is not.
ADV VINCENT MALEKA SC: Yes.
MR IAN HAMISH SCOTT SINTON: It contradicts the typed body of the document.
ADV VINCENT MALEKA SC: Yes. I do not know who put this here unless you are
able to help us.
10

MR IAN HAMISH SCOTT SINTON: No.
ADV VINCENT MALEKA SC: Who put this script here?
MR IAN HAMISH SCOTT SINTON: It was given to us in this format by Regiments.
ADV VINCENT MALEKA SC: But you for your part did not seek any clarity on it?
MR IAN HAMISH SCOTT SINTON: No.
ADV VINCENT MALEKA SC: Okay.
CHAIRPERSON: Alright, on page 137 at the top right the name Regiments Capital
appears to be written there and I do not know whether what appears above it is
Regiments Capital’s emblem or logo. Then on the left hand side of the same page the
words I think “Transnet” I may be mistaken seem to appear and I do not know whether

20

what appears below those words is Transnet emblem or logo.
ADV VINCENT MALEKA SC: It appears to be Transnet logo.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: And also Regiments logo.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: Because if you compare that logo of Regiments I know

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here it is not decipherable.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: But to the letter which they wrote to Mr Sinton that we
dealt with.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: The logos are more or less the same.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: For instance if you compare page 110.
CHAIRPERSON: Hm.
10

ADV VINCENT MALEKA SC: With 137.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: Just purely on the logos alone.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: You will see that it is more or less the same Chair.
CHAIRPERSON: Hm. Yes, thank you.
ADV VINCENT MALEKA SC: Alright.
CHAIRPERSON: Is that usual Mr Sinton? This appears to be when you look at page
137, it appears to be a letter addressed to Transnet and addressed to Mr Anoj Singh,
but it has got logos of two different entities, but then when you go to the end or when

20

you go, when you read paragraph 137 towards the end then you are told that here is
what has been agreed and then you have terms and conditions and then at page 140
that page looks like, looks the way any last page of an agreement would look with
places for the parties to sign and witnesses and then of course there is the handwritten
annotation at the end. It just seems strange to me that it does not appear on the first
page as an agreement as one normally finds agreements would look, but it has got

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logos of both parties, but maybe that is normal. I just do not know it.
MR IAN HAMISH SCOTT SINTON:

Chair it is not normal to, for a supplier to a

customer to use the customer’s logo on letters.
CHAIRPERSON: Yes.
MR IAN HAMISH SCOTT SINTON: It often happens that to give glass to contracts
logos are applied.
CHAIRPERSON: Yes.
MR IAN HAMISH SCOTT SINTON: But that at the time of signing. To send a letter
using.
10

CHAIRPERSON: Yes.
MR IAN HAMISH SCOTT SINTON:

It would be unusual and it seems to me it is

unusual in commerce for people to write a letter proposing terms and say if you agree
to the terms just countersign the letter and that will be the record of the agreement.
CHAIRPERSON: Hm.
MR IAN HAMISH SCOTT SINTON: So it elevates a letter into a contract.
CHAIRPERSON: Hm.
MR IAN HAMISH SCOTT SINTON: And I think that was the intent here.
CHAIRPERSON: Hm.
MR IAN HAMISH SCOTT SINTON: But it is a bit of both.
20

CHAIRPERSON: Ja.
MR IAN HAMISH SCOTT SINTON:

It is partly a letter, but it provided the proper

countersignature.
CHAIRPERSON: [Intervenes].
MR IAN HAMISH SCOTT SINTON: Just anyway they chose to deal with each other.
CHAIRPERSON: The result is that to the extent that when you look at page 1 you think

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this is a letter addressed to Transnet particularly to Mr Anoj Singh. When you come to
the end it seems to me you cannot tell who was writing to him. You just see names
unless you say Transnet was writing to Transnet.
ADV VINCENT MALEKA SC: Unless Chair they would be using a joint letterhead.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: Ja, it maybe. I was just saying that it seems unusual to me, but I do
not know if other people’s experiences suggest it is usual.
ADV VINCENT MALEKA SC: Yes.
10

CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: But I take the point of Mr Sinton.
CHAIRPERSON: Hm.
ADV VINCENT MALEKA SC: That the script at the bottom and it appears to come
immediately after the signature of Mr Singh. So on the face of it you can attribute this
to him. It contradicts the terms of the fee payment in Clause 2.1.2 and also the
structure of the agreement because the structure of the agreement under this letter it is
a clear engagement between Regiments and Transnet and here the script suggests that
the contract is with McKinsey.
CHAIRPERSON: Yes.

20

ADV VINCENT MALEKA SC: And these guys are merely subcontractors or they are
joint partners.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: With McKinsey.
CHAIRPERSON: Ja that is.
ADV VINCENT MALEKA SC: There are those contradictions which I mean Mr Sinton

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is correct. I can explain them now.
CHAIRPERSON: Hm.
ADV VINCENT MALEKA SC: And hopefully in due course Regiment will be explain
when they file their response as they promised to.
CHAIRPERSON: Yes, okay.
ADV VINCENT MALEKA SC: Mr Sinton you are at page 16 paragraph 29 and you had
expressed your concerns in that regard and you had indicated the conclusion that
Standard Bank made after all of this engagement with Regiments. The sum total of that
conclusion was to terminate the relationship between Standard Bank and McKinsey and
10

its further Directors. The point is did they have, those Directors, did they have banking
accounts with Standard Bank?
MR IAN HAMISH SCOTT SINTON: Sorry, you said McKinsey. It is [intervenes].
ADV VINCENT MALEKA SC: Sorry, my apologies. I am getting tired now.
MR IAN HAMISH SCOTT SINTON: Yes. We did, we concluded the agreement with
Regiments.
ADV VINCENT MALEKA SC: Yes.
MR IAN HAMISH SCOTT SINTON:

And with those Directors of Regiments who

banked with Standard Bank we also terminated their accounts.
ADV VINCENT MALEKA SC: They had accounts with Standard Bank?
20

MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: Okay. I am going to move through a different topic and
that is and that is payments to Homix. You deal with that topic from page 17 paragraph
31. Correct?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: You indicated to the Chairperson that Homix was an

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entity that had a business relationship with you in terms of banking transaction
facilities?
MR IAN HAMISH SCOTT SINTON: It used to, yes.
ADV VINCENT MALEKA SC: It used to?
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: Yes. Media reports suggest that Homix is a letterbox
company and I am sure you must have picked up those media reports?
MR IAN HAMISH SCOTT SINTON: I have seen them yes.
ADV VINCENT MALEKA SC: Yes. From your investigation what did they reveal about
10

Homix?
MR IAN HAMISH SCOTT SINTON: Homix did open a bank account with Standard
Bank. The appointed; they provided proof of address and all the statutory documents
you would expect and they provided the identities of the signatories on the account. In
this case despite Homix having been nominated as an entity to receive all payment s for
Mr Moodley and Mr Essa they were not signatories on the account nor were they
Directors of the company. Those were Mr Yakub Ahmed Bhikhu, Mr Toffie Kazwari and
Mr Mogamat Shafiek Adams.
ADV VINCENT MALEKA SC: Who are these individuals? I mean did you manage to
FICA them and find out who they are?

20

MR IAN HAMISH SCOTT SINTON: Yes. We have names, ID books, addresses for all
of them. There is separate in the bundle that you have handed up. We have given that
all to you. I would rather not give personal ID numbers and names.
ADV VINCENT MALEKA SC: Yes.
MR IAN HAMISH SCOTT SINTON: Out publically if I can help it.
ADV VINCENT MALEKA SC: Yes. No, I understand, but you explain how money was

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paid into Homix and how it in turn paid money to other entities in paragraph 31?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: And you do so with reference to a spreadsheet which is
at page 164?
MR IAN HAMISH SCOTT SINTON: That is correct.
ADV VINCENT MALEKA SC: Correct.
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Can I ask you to take us through those payments? They
are obviously arranged according to months from April 2014. As I pick up the payments
10

from Homix from 8 April 2014 beginning at page 164 up to page 169. They go to an
entity called Bapu Trade CC. Do you see that?
MR IAN HAMISH SCOTT SINTON: Yes, I do.
ADV VINCENT MALEKA SC: Who is Bapu Trade CC?
MR IAN HAMISH SCOTT SINTON: Bapu Trading CC is another entity. Well as I point
out my, in my statement when you look at Homix’s account there were as we pointed
out between Chivita and Homix over R200 million worth of payments went in.
Payments from that went out to various entities, but the majority of the payments from
the Homix account went to an entity called Bapu Trading. Those payments have all
been itemised in this schedule. Bapu Trading also had a bank account with Standard

20

Bank.
ADV VINCENT MALEKA SC: Yes.
MR IAN HAMISH SCOTT SINTON: Used to have a bank account with Standard Bank.
ADV VINCENT MALEKA SC: And do you know who the members of Bapu Trading CC
were from your recollection?
MR IAN HAMISH SCOTT SINTON: It had a single member. A Mr Chetan Patel.

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12 MARCH 2019 – DAY 64
ADV VINCENT MALEKA SC: Do you know who he is?
MR IAN HAMISH SCOTT SINTON: We know. We have his ID book, his address,
everything else, but where he fitted into the scheme of things I do not know. We do
know that these large payments went through this account.
ADV VINCENT MALEKA SC: Are you able to explain why would funds that are being
paid by Regiments to Homix then leave that account to go to Bapu Trading?
MR IAN HAMISH SCOTT SINTON: No, I have; part from observing that there were
large amounts often round amounts. The reason for the transfers. All this takes place
electronically. I have no way of knowing what the reason was.
10

ADV VINCENT MALEKA SC: What view did you hold about those transactions in
Homix’s account to Bapu Trading?
MR IAN HAMISH SCOTT SINTON: Sorry, please ask again.
ADV VINCENT MALEKA SC: What did you think of those payments?
MR IAN HAMISH SCOTT SINTON: An inference to be drawn is money laundering.
ADV VINCENT MALEKA SC: Money laundering?
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: And what did you do with that Bapu account which on
your view of things suggested money laundering?
MR IAN HAMISH SCOTT SINTON: One assumes all suspicious transactions would

20

have been reported to the Financial Intelligence Centre and then separately once we
noticed separately from any of that this type of activity we would close the accoun t.
ADV VINCENT MALEKA SC: You would close the account?
MR IAN HAMISH SCOTT SINTON: Ja.
ADV VINCENT MALEKA SC: Okay. Then you also referred to an entity or before I
leave Homix. Can I draw your attention to copies of bank statements that Standard

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12 MARCH 2019 – DAY 64
Bank appears to have sent to Homix? Chair they begin from page 171. If you look at
for instance page 172 you will see there is an account number at the top and the type
of account that was held by Homix in Standard Bank. It is described as Money Market
Call Account. Do you see that?
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: And you will see that Homix has given you an address
where you post it, these bank accounts, bank statements, sorry. Do you see that?
MR IAN HAMISH SCOTT SINTON: Yes, I do.
ADV VINCENT MALEKA SC: And at every turn you indicate to your client at that point
10

in time the various balances in that Money Market Call Account. Correct?
MR IAN HAMISH SCOTT SINTON: I do, yes.
ADV VINCENT MALEKA SC: There are many. From my documentation they end at
page 188?
MR IAN HAMISH SCOTT SINTON: That is correct.
ADV VINCENT MALEKA SC: Then you refer on page 17 paragraph 31 to another
entity Cutting Edge Commerce. Are you there? If you go to paragraph 31 of your
statement.
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: And Cutting Edge, was it an entity that had a bank

20

account with you?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: And you refer to money that got into that account and
left that account. Correct?
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: You do so with reference to a spreadsheet that you

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prepared and it begins at page 230?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Now this entity is quite interesting. Did you manage to
understand who the controlling minds behind this entity were?
MR IAN HAMISH SCOTT SINTON:

The account was first opened back in 2004.

Mr [indistinct] and a Mr Yates were then appointed as the signatories. In 2011 a
T A Turow and A M Emmally were appointed as the signatories and during 2017
J Fraser were appointed as a signatory. Those were the appointed signatories. The
reason that I have highlighted here at face value they have nothing to do with any
10

Gupta related entities, but nevertheless large amounts of money emanating from those
entities and going back to those entities came through the Cutting Edge account.
ADV VINCENT MALEKA SC: Yes and you give the details of the directing minds of
Cutting Edge at page 19 paragraph 39. Correct?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: And you give the account details in paragraph 38. I will
go to the various bank statements that Standard Bank sent to Cutting Edge, but for the
time being you record the amount or amounts that were paid from the account of
Cutting Edge held at Standard Bank from page 230. Correct?
MR IAN HAMISH SCOTT SINTON: Correct.

20

ADV VINCENT MALEKA SC: And here.
CHAIRPERSON: I am sorry Mr Maleka.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: Let us adjourn for five minutes. We will continue until we have
finished with him. Is it not? I assume we will finish about half past four if not earlier.
ADV VINCENT MALEKA SC: Yes, I would like to finish with Mr Sinton.

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CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: Because Mr Piers Marsden is waiting in the wings Chair.
CHAIRPERSON: Yes. No, we will finish.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: But let us take a five minute adjournment.
MR IAN HAMISH SCOTT SINTON: Thank you Chair.
CHAIRPERSON: Just five minutes. We adjourn.
REGISTRAR: All rise.
INQUIRY ADJOURNS
10

INQUIRY RESUMES
CHAIRPERSON: Yes you may proceed Mr Maleka.
ADV VINCENT MALEKA SC: Thank you Chair. Mr Sinton we have now identified who
Cutting Edge is, and we did so with reference to paragraph 38 of your statement, in
which you confirmed that it had a money market call account with Standard Bank,
correct?
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: And you give the details there. I merely draw your
attention to paragraphs 40 to 41 and 42 and ask you to confirm them, we may get back
to them depending on what you say later about paragraph 43 onwards.

20

MR HAMISH SCOTT SINTON: I do confirm that.
ADV VINCENT MALEKA SC:

Yes, let’s get to paragraph 43, you say that with

reference to IS16 there is a clear evidence that on 16 May 2016 Cutting Edge received
seventy one odd million Rand from Eskom, do you confirm that?
MR HAMISH SCOTT SINTON: That’s correct.
ADV VINCENT MALEKA SC: And IS16 begins at page 204, correct?

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12 MARCH 2019 – DAY 64
MR HAMISH SCOTT SINTON: That is correct.
ADV VINCENT MALEKA SC: And those are transactions about Cutting Edge. I
wonder whether you are able to tell us where you go them from?
MR HAMISH SCOTT SINTON: The IS204 is simply an extract from the accounting
records of Standard Bank.
ADV VINCENT MALEKA SC: Of Standard Bank?
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: So you got that payment tracked from official records
kept by Standard Bank.
10

MR HAMISH SCOTT SINTON: Good.
ADV VINCENT MALEKA SC: And you says that on the same day, I am at paragraph
33 of your statement, Cutting Edge transferred monies to different entities, the first one
is Majeau, I hope I’m pronouncing it correctly, and you say the next day it transferred
money to Besa, I don’t know how you pronounce it, Projects, and then you say it also
transferred money to Fourtime Consultants, correct?
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Did any or all of these entities hold accounts with
Standard Bank, as far as you have been able to establish?
MR HAMISH SCOTT SINTON: I haven’t been able to establish for Besa Projects and

20

Fourtime, the difficult we have is we usually – not usually we almost exclusively work
on numbers and not names so for each name that we search for if we come up with a
name we have to do a secondary investigation to track down accounts, when I was
under pressure to do this statement when this statement was Majeau was a customer
of ours, we hadn’t yet found evidence of Besa or Fourtime Consultants having accounts
with us.

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12 MARCH 2019 – DAY 64
ADV VINCENT MALEKA SC: Alright.
MR HAMISH SCOTT SINTON: But I mention here because again if you look at the
statements they all allege to be involved with the transaction one way or another.
ADV VINCENT MALEKA SC:

Yes.

Obviously in due course you will do further

investigation relating to ...(intervention)
MR HAMISH SCOTT SINTON: Yes we will.
ADV VINCENT MALEKA SC: And you would be able to furnish further information to
the Commission.
MR HAMISH SCOTT SINTON: Yes we will.
10

ADV VINCENT MALEKA SC: But as at the date of your statement you record that
there were further payments which were made around the 19 th and the 20 th of May, you
deal with them in paragraph 44, correct?
MR HAMISH SCOTT SINTON: Yes correct.
ADV VINCENT MALEKA SC: One of them was payment from Cutting Edge to Sahara.
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: How much was it?
MR HAMISH SCOTT SINTON: Ten million Rand.
ADV VINCENT MALEKA SC: We know who Sahara is, there cannot be any debate
any more about who Sahara is.

20

MR HAMISH SCOTT SINTON: I doubt Mr Maleka.
ADV VINCENT MALEKA SC: Okay, it was clearly an entity owned by the Gupta family.
Were you able to establish why was there a payment by Cutting Edge from the amounts
it received from Eskom to Sahara?
MR HAMISH SCOTT SINTON: No, no we – I don’t know the reason and I don’t think
we enquired at the time.

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12 MARCH 2019 – DAY 64
ADV VINCENT MALEKA SC: Alright. There is another payment of R10million to
Saharan and you deal with it in the last sentence of paragraph 44.
MR HAMISH SCOTT SINTON: Yes the relevance here Mr Maleka is that on 16 May
the seventy one odd million Rand comes in from Eskom, various payments, all in the
region of R4million/R4.5million are made to entities and then on 19 May, ie three days
later an amount of R10million is paid to Sahara and on 13 May, ie simply another two or
three days later another R10million, a round number of R10million is paid to Sahara.
Ordinarily that would be grounds for suspicion or enquiry.
ADV VINCENT MALEKA SC: Yes, you canvas further payments from paragraph 45
10

onwards, what I propose to do is to take you to your spreadsheet where you deal with
each of these payments by date and amount and you do so in page 230, I think that will
save us time to go through each and every paragraph of your state ment where you
record the payments from the account of Cutting Edge Commerce. Are you happy that
we should do it that way?
MR HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: Chair you will see from page 230 there are different
payments made by Cutting Edge from 20 November 2015, the last column on the right
hand lists persons who were the beneficiaries of those payments, there are many but I
would like you to pick up each of them by name without repeating each of the

20

transactions relating to that – to the name concerned.
MR HAMISH SCOTT SINTON: Yes Chair obviously I have provided the complete
statements, the legal team expressed to me an interest in payments from or to Cutting
Edge which could be of interest to this Commission Inquiry rather than an an alysis of
all payments so on my instructions our lawyers prepared this schedule, working off the
statements that I provided from the bank’s records, so you will see there in November

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2015 there is one R1.3million from Cutting Edge to Majeau, March 2016 R3m illion from
Cutting Edge to Sahara Computers. April 2016 another R600 000 Cutting Edge to
Sahara Computers and here is the R71million which was from Eskom to Cutting Edge,
then you’ll see R4.3million Cutting Edge to Majeau, again R4.5million Cutting Edge t o
Majeau, R4million Cutting Edge to Besa Projects, R4.4million Cutting Edge to Fourtime
Consultants, the next one is an inter between Cutting entities, then there’s R4.45million
Cutting Edge to Biz Africa. Then there’s the round R10millin, this is now May 2016,
Cutting Edge to Sahara, then there’s another amount from Eskom to Cutting Edge of
R5.58million, then there’s around R4million Cutting Edge to Espy Management, in May
10

26 R3.8million Cutting Edge to Espy Management, and then 24 May 2016 another
R10million Cutting Edge to Sahara Systems, approximately ten days later in June 2016
R3.25million Cutting Edge to Sahara Systems. Again in the media reports there was a
company called Global Softech which was reported to have been involved in
transactions with Transnet involving entities related to Guptas so we identified those,
there’s R600 000 coming into Global Softech, then interestingly on 19 July there’s
R5million from Sahara Computers back to Cutting Edge, and on the same day another
R4.5million Sahara to Cutting Edge, I get back to the comments earlier where an entity
makes multiple payments to the same beneficiary on the same day it’s cause for
concern.

20

ADV VINCENT MALEKA SC: Can I interrupt you? You explain in page 25 paragraph
68 who Global Softech is.
MR HAMISH SCOTT SINTON: Sorry can you remind me of the page number please?
ADV VINCENT MALEKA SC: Page 25 paragraph 68, and that is an entity that held an
account with Standard Bank, correct?
MR HAMISH SCOTT SINTON: Correct.

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ADV VINCENT MALEKA SC: Yes, so at least there when payments are made from
Cutting Edge to Global Softech you can pick ...(intervention)
MR HAMISH SCOTT SINTON: I can pick up those payments yes.
ADV VINCENT MALEKA SC: Those payments on your platform.
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Yes.
MR HAMISH SCOTT SINTON: Then that was R600 000 then as I said there’s an
interesting payment of R5million from Sahara back to Cutting Edge, on the same day
R3.5million from Sahara back to Cutting Edge, the next day R600 000 from Global
10

Softech back to Cutting Edge, ie reversal of the previous R600 000 paid, then on 2
August 2016 R8mllion from Cutting Edge to Sahara Computers, on 12 August R235
000 from Cutting Edge to Future Tech, Future Tech again was one of the enti ties that
was identified as being involved in contracts with the Guptas. Then it starts becoming
interesting in that on 18 August Cutting Edge paid Trillion R16.4million.
ADV VINCENT MALEKA SC: Can I stop you there, that is 18 August 2016?
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: And I would like to go back to your affidavit if you don’t
mind because you give some useful details around the movement of cash or account
balances between Cutting Edge and Trillion and that two different entities of Trillion you

20

identify, the one is Trillion Shared Services and the other is Trillion Management
Consultants. You begin to raise issues around Trillion from page 21 paragraph 49.
MR HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: You say in paragraph 49 on 18 August Cutting Edge
transferred Sixteen odd million to Trillion Management, correct?
MR HAMISH SCOTT SINTON: Correct.

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ADV VINCENT MALEKA SC: That is the transaction that you were dealing with when I
stopped you with reference to IS18, correct?
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Can I ask you this, we will deal with other inter-transfers
between Trillion in one or other capacity with Cutting Edge, by that time, I’m talking
around 18 August 2016, had you become aware of who Trillion management was?
MR HAMISH SCOTT SINTON: I cannot say, in context of what I would know, people
within Standard Bank might have been concerned but I really didn’t become interested
in Trillion until the Budlender Report was released, before that I had no interest but
10

people who monitored the accounts might well have.
ADV VINCENT MALEKA SC: Okay, fair enough. Then you – I will skip the transfers
you talk about in paragraph 50 and go to 51 because they deal with Cutting Edge and
Trillion, do you see that?
MR HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC:

You see on 7 September 2016 R25million was

transferred to Cutting Edge account by Trillion Shared Services, do you see that?
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: This on the face of it seems to be a totally different part
of Trillion.
20

MR HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: It is not Trillion Management Consulting, it is Trillion
Shared Services.
MR HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: Do you know what that entity is?
MR HAMISH SCOTT SINTON: I have no idea.

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ADV VINCENT MALEKA SC: Okay. It transfers about R25million to the account of
Cutting Edge, do you know why?
MR HAMISH SCOTT SINTON: No.
ADV VINCENT MALEKA SC: Okay.
MR HAMISH SCOTT SINTON: It’s of relevance that it’s a round number.
ADV VINCENT MALEKA SC: Yes. And then you say on the same day Cutting Edge
transfers about R9million to Sahara.
MR HAMISH SCOTT SINTON: Exactly R9million.
ADV VINCENT MALEKA SC:
10

A day later, which must have been on the 8 th of

September another amount of R25 840 000 was transferred by Trillion Management
Consultants to Cutting Edge, so this is a different Trillion.
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: It transfers an amount of twenty five odd million.
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Remembers this is the day after Trillion Shared Services
has transferred almost exactly the same - not exactly but almost the same amount,
R25million.
MR HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: What did that say to you as Standard Bank, or those

20

who were monitoring these accounts?
MR HAMISH SCOTT SINTON: Such large amounts paid in paid away in such short
order would have been a cause for concern.
ADV VINCENT MALEKA SC: A cause for concern for you?
MR HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC:

And I take that in consistent with your banking

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obligations you would have dealt with them.
MR HAMISH SCOTT SINTON: Correct yes.
ADV VINCENT MALEKA SC: And then would like to take you to paragraph 53 on page
22, because that’s where you deal with further payments as between Trillion
Management Consulting or Consultants with Cutting Edge.
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC:

10 October 2016 Trillion Management Consultant

transfer R19million to Cutting Edge, correct?
MR HAMISH SCOTT SINTON: Correct.
10

ADV VINCENT MALEKA SC:

And what happened to that money after it was

transferred?
MR HAMISH SCOTT SINTON:

Well on the same day Cutting Edge transferred

R10million to Sahara Computers.
ADV VINCENT MALEKA SC: And then?
MR HAMISH SCOTT SINTON: On the next day Trillion Shared Services transferred
R49.6million to Cutting Edge, which then made another payment of R9million to Sahara
Computers, then two further payments by Cutting Edge were made on 12 October to
Sahara Computers of R5million and R4.5million, two on the same day. This was
followed by four individual payments to Sahara Computers of R10million each from
20

(indistinct) in October 2016.
ADV VINCENT MALEKA SC:

I mean there has to be real legitimate transaction

between Cutting Edge and Sahara to justify the lawfulness of these payments?
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: But th pattern which has now emerged Mr Sinton when
one considers the transfers involving those three entities, that is Cutting Edge, Trillion

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Shared Services and Trillion Management Consulting, which you describe in
paragraphs 51 and 53 is the following; Trillion Shared Services will make huge transfer
one day, immediately thereafter Trillion Consulting will make more or less the same
amount of payment to Cutting Edge account and from those payments which are made
to Cutting Edge account there will be substantial payments to Sahara.
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: I mean that’s a clear pattern of dealing with these
transactions.
MR HAMISH SCOTT SINTON: Correct.
10

ADV VINCENT MALEKA SC: Is that coincidental as far as you could establish?
MR HAMISH SCOTT SINTON: I can only tell you what is evident from the transfers as
they appear in our books and records and I can make the observation that when the
amounts transferred in are large round amounts and then they are transferred out
again, for example elsewhere I mentioned that R10million a day over four or five days
to Sahara, if you owed Sahara R60million just pay them R60, don’t pay them six lots of
ten, it just doesn’t – when you do it that way then there’s automatic grounds for
suspicion.
ADV VINCENT MALEKA SC: Yes, the same pattern I’ve described to you continues in
paragraph 54, correct?

20

MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC:

On the 20 th of October 2016 Trillion Management

Consulting transfers R25million to Cutting Edge.
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: A day later Trillion Shared Services transfers R15million
and R25million to Cutting Edge.

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12 MARCH 2019 – DAY 64
MR HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC:

And the next day which is 21 October 2016 six

payments are made by Cutting Edge to Sahara.
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: It’s the same pattern
MR HAMISH SCOTT SINTON: Of R10million each.
ADV VINCENT MALEKA SC: Of R10million each.
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Again grounds for suspicion on your approach.
10

MR HAMISH SCOTT SINTON: And then another R9million on the 31 st of October.
ADV VINCENT MALEKA SC: Yes.
MR HAMISH SCOTT SINTON: Two days later.
ADV VINCENT MALEKA SC: And then you say in paragraph 58 that Cutting Edge
received about R5.2million odd from Optimum Coal Mine around 15 December 2016,
do you see that?
MR HAMISH SCOTT SINTON: Correct yes.
ADV VINCENT MALEKA SC: Do you know what this payment was for?
MR HAMISH SCOTT SINTON: No, no, I just highlighted it here because it came out of
the blue as ...

20

ADV VINCENT MALEKA SC: Did you know that at that point in time there was a
negotiation for the sale of Optimum Coal Mine to Tegeta.
MR HAMISH SCOTT SINTON: In hindsight I’m aware of it yes.
ADV VINCENT MALEKA SC: Okay but at the point in time you are not aware.
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Alright. Mr Sinton subject to your guidance you can go

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12 MARCH 2019 – DAY 64
back to your spreadsheet and I would ask you to deal with an entity called CAD Howes,
because you say there were payments made from the account of Cutting Edge held in
Standard Bank to that entity.
CHAIRPERSON: What page was that spreadsheet again?
ADV VINCENT MALEKA SC: Chair it starts at page 230.
CHAIRPERSON: Thank you.
ADV VINCENT MALEKA SC: And then as I indicated on the right hand column Mr
Sinton through his lawyers lists different beneficiaries of payments from accounts made
– from the account held by Cutting Edge. Mr Sinton I mean I don’t see CAD on that
10

spreadsheet.
MR HAMISH SCOTT SINTON: On page 232.
ADV VINCENT MALEKA SC: 232?
MR HAMISH SCOTT SINTON:

Alongside 5

January 2017 is a payment of

R17.1million from CAD House to Cutting Edge.
ADV VINCENT MALEKA SC: Alright, do you know this entity called CAD House?
MR HAMISH SCOTT SINTON: I’m assuming it’s the same CAD House that was
reported to have assisted SAP in obtaining – not necessarily SAP it was an IT, an
international IT firm in obtaining contracts from – with Eskom, I mean not Eskom, with
Transnet, and it was widely reported it’s being set up and managed by a former
20

employee of Sahara Computers and there was much speculation around at it at the
time, the only reason it’s here is because it has been identified in the media as being of
interest in – to this Commission.
ADV VINCENT MALEKA SC: Yes you flagged it and you processed the payments in
and out of Cutting Edge relating to that entity.
MR HAMISH SCOTT SINTON: Correct.

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12 MARCH 2019 – DAY 64
ADV VINCENT MALEKA SC: You deal with ...(intervention)
CHAIRPERSON: Sorry Mr Maleka, it is late in the afternoon, it’s been a long day, but
Mr Sinton at some stage your voice gets quite soft so if you can try and just maintain it
at a certain level so I can hear you.
MR HAMISH SCOTT SINTON: Sorry Mr Chairman.
CHAIRPERSON: Okay.
ADV VINCENT MALEKA SC: You deal with that entity and payments to or from its
account to Cutting Edge at page 23, paragraph 60 of your statement.
MR HAMISH SCOTT SINTON: Correct yes.
10

ADV VINCENT MALEKA SC: And you say that it transferred about R17.1million into
the account of Cutting Edge.
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Now you say something very interesting about that
money, in relation to an entity called Futuretech, do you see that?
MR HAMISH SCOTT SINTON: Yes, there were nine transfers of R5million each,
between 5 and 17 January from Futuretech to Cutting Edge.
ADV VINCENT MALEKA SC: So that in total it’s about R45million.
MR HAMISH SCOTT SINTON: And I’m not saying the Futuretech payments are linked
to Cutting Edge, I observe there’s one payment of R17.1million from CAD House to

20

Cutting Edge, CAD House was reported to have been involved in securing business for
Neotel at Transnet and independently of that it’s interesting that there were nine
transfers of R5million each in a period of a week or from 5 to 17 January, ten days,
from Futuretech to Cutting Edge.
ADV VINCENT MALEKA SC: Yes, but in that week it will be about R45million?
MR HAMISH SCOTT SINTON: Yes correct.

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12 MARCH 2019 – DAY 64
ADV VINCENT MALEKA SC:

Yes, do you know why Futuretech would transfer

R45million in one week to Cutting Edge?
MR HAMISH SCOTT SINTON: No, no idea.
ADV VINCENT MALEKA SC: Right, you explained what Futuretech is from page 26
paragraph 17 and you say that Futuretech held an account with Standard Bank,
correct?
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC:

And so insofar as there were transfers between

Futuretech and Cutting Edge those would be your clients holding account with Standard
10

Bank and you would be able to screen them fairly comfortably.
MR HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: Okay. Now I’m going to take you to some source
information that you provided to us about these entities, the first is Global Softech
Solution, you have given us source documentation relating to it from page 265.
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Beginning with the statement dated 9 January 2015.
MR HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: And you indicate that that statement shows a balance,
I’m not too sure if I read it correctly and I may have misunderstood the balance

20

reference on page 265, how much was it?
MR HAMISH SCOTT SINTON: The interesting point about Global Softech is that
between January 2015 and February 2017 there were large either deposits into the
account or payments out of the account from Sahara via Laser, Op timum Mines, T & A
Media, Cutting Edge and T-Systems, all of which are entities that we think are of
interest to the Commission.

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12 MARCH 2019 – DAY 64
ADV VINCENT MALEKA SC: Yes.
MR HAMISH SCOTT SINTON: And they appear from those statements that I’ve
attached.
ADV VINCENT MALEKA SC: Yes, Chair we will ask the investigators to do an analysis
but the point is that Mr Sinton has presented evidence which shows how money from
Eskom goes to an entity and that entity pays money to several of the Gupta owned or
controlled entities, and that’s the point of this evidence for now. He was able to do so
because some of those entities that I will call the primary account holders held
accounts with Standard Bank so they could pick up those things. I am not too sure if I
10

wanted to do the analysis for us, of course we will do it, but what I want to understand
just to clear my confusion so that when we ask the investigators to do the analysis are
you able to give me some hint as for instance when I look at page 265, I mean would I
be able to pick up a balance then in existence?
MR HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: As at the date of a statement?
MR HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: Which is?
MR HAMISH SCOTT SINTON: The opening balance is R1.285million.
ADV VINCENT MALEKA SC: Okay thank you. Then the next set of statements you

20

give us Mr Sinton relates to Futuretech. You will find those statements from page 412
up to the end of the file which is 467. You give the statements beginning from 14
September 2016, correct?
MR IAN HAMISH SCOTT SINTON: Correct yes.
ADV VINCENT MALEKA SC: And again I take it that from the guidance I got the
balance would be the amounts that is on the right hand column of it.

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12 MARCH 2019 – DAY 64
MR IAN HAMISH SCOTT SINTON: Yes that would be correct opening balance.
ADV VINCENT MALEKA SC: Okay. Mr Sinton I would like to draw some conclusions
if I can from the evidence that you gave us. I would do so by asking you to reflect on a
document that you gave us which was not clear and we had to ask you to give us an A3
size which is page 143. Chair it is Annexure C to the letter which was written by the
directors of Regiments.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: And if you do not mind Mr Sinton can you go to that
clear copy of Annex C which is page 143. It is page 143.
10

MR IAN HAMISH SCOTT SINTON: Yes I have it.
ADV VINCENT MALEKA SC:

You remember the context is that the directors of

Regiments gave you this document to show you how much money came into their
account from Transnet and how much went out of their account to various entities
including Chivita, Homix and Kupanua, is it Kupanua?
MR IAN HAMISH SCOTT SINTON: Kupunua I think yes.
ADV VINCENT MALEKA SC: Kupunua?
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: Kupunua I would like you to give some orientation to
give us some orientation on how we approach this document. You looked at it, they
20

gave it to you please guide us about how we should look at it and how we should deal
with it?
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: It has dates on the extreme left hand column, correct?
MR IAN HAMISH SCOTT SINTON: That is correct.
ADV VINCENT MALEKA SC: What are those dates supposed to reflect?

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12 MARCH 2019 – DAY 64
MR IAN HAMISH SCOTT SINTON: They seem to intend to reflect the date upon which
the transactions occurred i.e. the dates upon which monies were received.
ADV VINCENT MALEKA SC: You see I have looked at the next heading which is the
source of funds which would be public sector entities who paid presumably service fees
to Regiments.
CHAIRPERSON: I am sorry Mr Maleka I am looking at the loose page 143C am I in the
wrong place?
ADV VINCENT MALEKA SC: No you are on the correct page Chair yes.
CHAIRPERSON: Okay where about in it?
10

ADV VINCENT MALEKA SC: You will see the extreme left hand column that different
columns Chair.
CHAIRPERSON: Yes I saw source reference but you source of funds and I was not
sure whether I am looking at the right column.
ADV VINCENT MALEKA SC: Yes that source reference to this source of funds.
CHAIRPERSON: Source reference is the right column? Okay alright.
ADV VINCENT MALEKA SC: But Chair you have picked up the dates now?
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: Yes.

20

ADV VINCENT MALEKA SC: You will see that the first one is
CHAIRPERSON: 22 May.
ADV VINCENT MALEKA SC: 22 May 2013.
CHAIRPERSON: 2013.
ADV VINCENT MALEKA SC: 2013, correct?
CHAIRPERSON: Ja.

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12 MARCH 2019 – DAY 64
ADV VINCENT MALEKA SC: And that is Group Serve and that we know from the
accounts that we have dealt with the statements of Regiments will be Transnet correct?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: Yes. And so to guide us you will see that on that day
which is the 23 May – 22 May Transnet transferred about R11million.
MR IAN HAMISH SCOTT SINTON: R11.7 yes.
ADV VINCENT MALEKA SC: R11.7.
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: Okay. And then on the next day.
10

MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC:

Which is the 23 May 2013 Chair are you there?

Immediately after the column of R11.7 million there is another heading called Date.
CHAIRPERSON: Oh yes. Yes. I see that yes.
ADV VINCENT MALEKA SC: Do you see that? And immediately after that column
there is a name Chivita, correct?
MR IAN HAMISH SCOTT SINTON: That is correct.
ADV VINCENT MALEKA SC: And then you will have an invoice there I do not know it
is an invoice number, do you see that?
MR IAN HAMISH SCOTT SINTON: Yes correct.
20

ADV VINCENT MALEKA SC: And the next column is an amount of R4.3 million odd,
do you see that?
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: My reading of it is that on the 23 May Regiments paid
R4.3 odd million to Chivita.
MR IAN HAMISH SCOTT SINTON: As a result of receiving the R11.7 million from

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12 MARCH 2019 – DAY 64
Transnet.
ADV VINCENT MALEKA SC: From Transnet yes.
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: Correct?
MR IAN HAMISH SCOTT SINTON: And if you carry on they will say that payment was
authorised by Mr Eric Wood.
ADV VINCENT MALEKA SC: We will get to that point.
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: You will see there is a heading before …
10

CHAIRPERSON: I am sorry Mr Maleka you were putting to Mr Sinton your reading of
this I just want to make sure I am following it. Group Serve which is Transnet pays
Regiments R11.7 million on the 22 May, is that right?
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: And then the following day did you say Regiments pays Chivita?
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: R4.3 million?
ADV VINCENT MALEKA SC: Yes Chair.
CHAIRPERSON: Oh and he agreed with that?
ADV VINCENT MALEKA SC: And he agreed with it.

20

CHAIRPERSON: Okay alright.
ADV VINCENT MALEKA SC: The qualification is that R4.3 million was paid from the
R11 million that was received from Transnet.
CHAIRPERSON: Yes but are we not saying it is Chivita that is – oh Chivita is being
paid by Regiments?
ADV VINCENT MALEKA SC: Yes.

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12 MARCH 2019 – DAY 64
CHAIRPERSON: And Regiments got the money from Transnet?
ADV VINCENT MALEKA SC: Indeed.
CHAIRPERSON: Okay, okay.
ADV VINCENT MALEKA SC: That is how the movement of funds manifest itself Chair.
CHAIRPERSON: Now I understand.
ADV VINCENT MALEKA SC:

So Chair this is a version put by the directors of

Regiments to Mr Sinton and they make it clear that..
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: As and when they get money from a state owned entity
10

in this case Transnet on the 22 May they pay a portion of it.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: We will get to the percentage calculation what does it
represent but can we complete the rest of the columns for 22 nd and 23rd May Mr Sinton
just to know how we should approach this document.
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: You…
MR IAN HAMISH SCOTT SINTON: It seems to say the amount of R4.32 million was
paid to Chivita.
ADV VINCENT MALEKA SC: Yes.

20

MR IAN HAMISH SCOTT SINTON: The payment was requested Inderan Pillay I have
no idea who that is and was authorised by Eric Wood.
ADV VINCENT MALEKA SC: Yes. And under comments?
MR IAN HAMISH SCOTT SINTON: And there is a comment that there is no invoice.
ADV VINCENT MALEKA SC: No invoice?
MR IAN HAMISH SCOTT SINTON: No invoice 1821 email I do not know.

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12 MARCH 2019 – DAY 64
ADV VINCENT MALEKA SC: Is that not the number of invoice?
MR IAN HAMISH SCOTT SINTON: It could be, it could be the number of invoice ja.
ADV VINCENT MALEKA SC: Okay. And there is a heading which you skipped “email
recipient” do you see that?
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: What does that supposed to reflect?
MR IAN HAMISH SCOTT SINTON: I am – I really do not know but if I can revert back
to the meeting we had they explained to me that as and when they receive a payment
from Transnet they would within a day or two get an email from Mr Essa reminding
10

them to make sure he gets his share.
ADV VINCENT MALEKA SC: Yes.
MR IAN HAMISH SCOTT SINTON: So I think they were trying to track down the
emails from these – Mr Essa reminding them to pay his share.
ADV VINCENT MALEKA SC: Yes. So for that invoice presumably there will not an
email from Mr Essa or …
MR IAN HAMISH SCOTT SINTON: It looks like it yes.
ADV VINCENT MALEKA SC: Yes. Let us go to the second one. Again I just want to
make sure that we understand how we should approach this. Because each of the
entry column there has been filled except the comments section. What is interesting

20

with that payment is that it comes from Denel, do you see that?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: It has nothing to do with the relationship of McKinsey
and Regiments?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: At least insofar as Transnet is concerned.

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MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: The date is?
MR IAN HAMISH SCOTT SINTON: 11 June 2013
ADV VINCENT MALEKA SC: And the source reference or source of funds as I call it is
Denel, correct?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: And there is a reference number there DEN6/13 an
amount is paid of R3.420 million correct?
MR IAN HAMISH SCOTT SINTON: Correct.
10

ADV VINCENT MALEKA SC: And then on the 20 June 2013 payment is made to
Chivita?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: How much is it are you able to pick it up?
MR IAN HAMISH SCOTT SINTON: R2.29 – R2 298 240,00.
ADV VINCENT MALEKA SC: And then the email recipient is who?
MR IAN HAMISH SCOTT SINTON: Eric Wood/Niven Pillay.
ADV VINCENT MALEKA SC: And we know that both of these were the directors of
Regiments at the time?
MR IAN HAMISH SCOTT SINTON: Correct.

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ADV VINCENT MALEKA SC: And whose the person that requested payment?
MR IAN HAMISH SCOTT SINTON: Gansambu Vundla.
ADV VINCENT MALEKA SC: And then who authorised the payment?
MR IAN HAMISH SCOTT SINTON: Eric Wood.
ADV VINCENT MALEKA SC: Chair I have some understanding of how we should
approach this document and I am not going to take Mr Sinton through each and every

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detail of the recorded payments.
CHAIRPERSON: Ja.
ADV VINCENT MALEKA SC: All I wanted to do before I conclude here is to ask you
whether you are able to tell us who is Kupanua?
MR IAN HAMISH SCOTT SINTON: Kupanua is a company privately owned by a Ms
Swazi Tsabalala.
ADV VINCENT MALEKA SC: Who?
MR IAN HAMISH SCOTT SINTON: Swazi Tsabalala.
ADV VINCENT MALEKA SC: It is the first time I hear that name.
10

MR IAN HAMISH SCOTT SINTON: We looked into it she was formerly a director of
Standard Bank and she did work for Regiments at Transnet and it was in connection
with Maputa Corridor and she receive payment for that but we did not recognise the
name so we asked Regiments to explain it to us and they said it was for consulting
work which she had done. We independently interviewed her and she produced all the
books, records, invoices, accounts, statements it was – we were satisfied it was an
arm’s length commercial arrangement.
ADV VINCENT MALEKA SC: And there is nothing that we should make of that
transaction?
MR IAN HAMISH SCOTT SINTON: No.

20

ADV VINCENT MALEKA SC: Okay. Thank you. Now Mr Sinton we have now looked
at the various transactions. We have looked at how money moved and we have hear d
from you the opinions you have formed can I ask you to summarise for us what
happened to those entities with whom Standard Bank had accounts in the light of the
movement of funds and the opinions that you formed arising from those movements.
MR IAN HAMISH SCOTT SINTON: If you have regard to the statutory provisions

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around the prohibition on dealing on = dealing in the process of crime facilitating money
laundering facilitating transaction if you look at objectively speaking what would a
reasonable banker think looking at this information? I think a reasonable banker would
conclude that these large amounts of money moving rapidly between companies all
managed by people who are associated with one another gives rise to an influence that
there was an attempt to disguise the source of the money and when you try to disguise
the source of the money it must be illicit. So it warrants an investigation beyond the
powers that we have as to why these funds were moved around this way and who else
ultimately the beneficiary was.
10

ADV VINCENT MALEKA SC:

Mr Sinton from open source information you as

Standard Bank extend financing to Transnet, correct?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC:

You as Standard Bank extend funding to Eskom,

correct?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: And of course at some point SA?
MR IAN HAMISH SCOTT SINTON: Correct.
ADV VINCENT MALEKA SC: These are your clients also correct?
MR IAN HAMISH SCOTT SINTON: Correct.
20

ADV VINCENT MALEKA SC: And you have picked up all of this information relating to
your clients in a different context and with the detail that we have covered. Had you
had occasion to raise these issues with your clients? When I say your clients I mean at
least Transnet, Eskom and SAA.
MR IAN HAMISH SCOTT SINTON: I am unaware of I personally am unaware of
interactions with those clients in the context of saying we have this information which

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we wish to share with you but we certainly have had regular engagements with the
senior executives and directors of all those entities where we said we are very
concerned about the fact that your – you as corporate clients have been subjected to
possible abuse through these types of activities and we will happily cooperate with you
and all investigations you may – wish to undertake we would like to see from your side
as borrowers we would like you to share with us what you are doing what you are
achieving in that regard and they do regularly meet with us to share the progress they
making in trying to unravel these various transactions and recoup money that has been
improperly applied etcetera. But I do not – I am not aware of us having said we tender
10

up these documents to you that would be difficult for us.
ADV VINCENT MALEKA SC: As we speak and this is the final question from me what
is the level of comfort from the feedback you get from your corporate clients such as
Transnet and Eskom on the matters that I have raised with you?
MR IAN HAMISH SCOTT SINTON: Chair again I am loathed to breach confidence
but…
ADV VINCENT MALEKA SC: Okay if you do not want to…
MR IAN HAMISH SCOTT SINTON: We have – we get a lot of comfort from the
commitment shown to us from the new management of both Eskom and Transnet that
they are intent on trying to unravel what happen historically and make sure it does not

20

happen again. It is perhaps worthwhile mentioning that our experience internationally
with this issue of corporate malfeasance is it is not the corporates that commit the
crimes it is the management of the corporates that allow it or cause it to commit the
crimes. So when these things happen we would expect the corporate to acknowledge
the wrongdoing to investigate thoroughly. To be open honest about its findings. To
excise the cancer I get rid of anybody who caused the problem, put in place remedial

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programmes designed to prevent this from happening again and in those – in that
context we are happy to continue to support corporates. The difference here is in the
case of the Gupta entities they vehemently denied any wrongdoing whatsoever when it
was plainly obvious it was ongoing so they were not entities we could continue to do
business with.

In the case of corporates like Eskom and Transnet they readily

acknowledge to us there has been wrongdoing, they commit to showing us what they
doing to investigate it to put in place remedial processes and all of that for the time
being at least is to our comfort.
ADV VINCENT MALEKA SC: Yes. Can I with you follow on that? Can I with your
10

permission follow on that?
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: There have been reports that you hold a lever on these
state institutions insofar as you pick up what you call cancer or maleficence which are
called faith of governance. And the lever you hold is the ability to either stop funding or
call for whatever guarantee covenants that would have been extended by the state to
cover the debts which those entities have with you, correct?
MR IAN HAMISH SCOTT SINTON: I am not sure what you mean by lever?
ADV VINCENT MALEKA SC: Well if you are not satisfied that those corporate client
conduct their business in a manner that promotes risks free reputational concerns you

20

have the ability to say that you no longer extend funding to them.
MR IAN HAMISH SCOTT SINTON: Yes we have that ability.
ADV VINCENT MALEKA SC: And you also have the ability to say that you will call for
the guarantees that you may have extended or the debts that may be due as secured
by government guarantees.
MR IAN HAMISH SCOTT SINTON: Yes the loan covenants that we typically have in

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place with all clients not just state entities have undertakings to comply with the laws of
the land generally and money laundering and bribe and corruption laws in particular
and if those – if there is non-compliance we have the ability to declare a default which
has significant consequences. Yes we have that ability.
ADV VINCENT MALEKA SC: It is a strong ability. Well let me stop there.
MR IAN HAMISH SCOTT SINTON: Yes.
ADV VINCENT MALEKA SC: I see that you are reluctant to…
MR IAN HAMISH SCOTT SINTON: No it is there but it – if you are suggesting we
abuse it I do not think we do that.
10

ADV VINCENT MALEKA SC:

No I am not suggesting that you abuse it. I am

suggesting that you use it in a manner that promotes clean governance in these
corporate entities?
MR IAN HAMISH SCOTT SINTON: Absolutely.
ADV VINCENT MALEKA SC: Yes. Chair that will be the end of a long day I hope.
CHAIRPERSON: Well thank you let me just ask Mr Sinton one or two questions. I
would assume Mr Sinton that where you see suspicious transactions involving a private
company you could have a situation where you can or you do take the view that the
suspicious nature of that transaction or those transactions involving that entity may well
mean that the activities of for example corruption are not only being committed by
20

entities – by people involved in that entity but also by people involved in for example a
parastatal from which that entity gets funds and I would assume that your obligations in
terms of protecting your reputation and your obligations in terms of the law would
suggest that you take action against that parastatal as well. Is my understanding
correct?
MR IAN HAMISH SCOTT SINTON: Not quite. We if the hypothesis is that a private

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sector entity is engaged in a corrupt relationship with employers of a parastatal then we
would certainly if we come across evidence we would terminate the dealings with the
entity – the private entity and obviously would alert the client, the parastatal of what we
know so that they can steps to protect themselves. I am not aware of us ever taking
steps or threatening to take steps as against any state owned entity…
CHAIRPERSON: Well that is what I …
MR IAN HAMISH SCOTT SINTON:

Because its employees have in our opinion

misbehaved.
CHAIRPERSON: That is what I am interested in understanding. If for example entity A
10

has an account or accounts with Standard Bank and it appears that transactions that
involve it – or involves it accounts in its accounts relate to funds th at it gets for example
from Transnet and that when they tell you that private entity its directors whoever when
they tell you what these transactions are about if you form the view that these
transactions involve corrupt activities and that there may well be the corrupt activities
involve also people employees or senior people within Transnet has an account with
you for example. In terms of the principles of the legislation that obliges you to take
action would you not be required to also take action against Transnet?
MR IAN HAMISH SCOTT SINTON: Only if Transnet is unwilling or unable to satisfy us
that having become aware of the issue it would prevent in future us being exposed to

20

these transactions.
transactions.

We are not in the business of punishing them for histo rical

We have said having found out or having established that some

wrongdoing has occurred we would say to Transnet as a corporate customer we have
come across this conduct we – if it is not resolved to our satisfaction we would then
have to review the relationship and it – we have never had to go beyond that.
CHAIRPERSON: But if you got to know that the people at Transnet who were involved

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in these or whom you suspect to be involved in this corrupt activities are people who
are quite senior at Transnet now I am just putting this as a – to test how you as banks
deal with these matters. Let us say it is a group CEO of Transnet for argument sake
and maybe people who are on the board of Transnet would you still just deal with them
on the basis that this is what we have found with regard to entity A you people must just
make sure that your employees do not do this or certain people do not do these things
or would you call them that those senior people to a meeting or write to them and say
explain to us just like you do with a private entity or are there different rules?
MR IAN HAMISH SCOTT SINTON: Chair I again I am loathed to speak about any
10

particular client Transnet included
CHAIRPERSON: Ja no, no I am using Transnet as an example ja.
MR IAN HAMISH SCOTT SINTON: What I can say is that there are a number of
occasions that I am personally aware of where we have felt that if we were to raise our
concerns at a senior level we would raising our concerns with the very people that may
be implicated. So when that has occurred we approach the shareholder.
CHAIRPERSON: Yes.
MR IAN HAMISH SCOTT SINTON: And we go to the shareholder and say we have
concerns about what is going on and one of the entities that you supervise and this is
the nature and this is the evidence.

20

CHAIRPERSON: Yes.
MR IAN HAMISH SCOTT SINTON: And we leave it to the shareholder to manage and
resolve and we have never been disappointed.
CHAIRPERSON: Yes. But what part of what I am concerned – what I am interesting in
is that you do not raise the issues in the – on the same basis as you raise them with a
private entity? With a private entity you raise them on the basis that if you are not

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satisfied with their explanation you will terminate the relationship.
MR IAN HAMISH SCOTT SINTON: Correct.
CHAIRPERSON: But with for example you said you do not want to mention names and
I am not saying mention any names but I am just putting a hypothetical proposition in
the case of a parastatal you would not raise it on the same basis that they must explain
and if you are not satisfied with their explanation you would terminate your relationship
with them?
MR IAN HAMISH SCOTT SINTON: I think it is fair to say that without in any way
seemingly put ourselves at risk we regard state owned enter prises and the state as
10

being owned by us the people and for us as a major bank to take the drastic step of
terminating a bank relationship with a state would have ramifications way beyond just
the relationship and so not a step we would ever lightly take and as far as I know we
have never considered taking it. We prefer when you dealing with the state if we do not
get satisfaction or resolution with the entity that we deal with we escalate up to the level
of effectively the executive and they have always been willing to intercede and put an
end to what whatever we think is inappropriate behaviour.
CHAIRPERSON: Well it may be that it is a topic that might have to be revisited in due
course.
MR IAN HAMISH SCOTT SINTON: Yes.

20

CHAIRPERSON: But maybe for today we leave it at that. Mr Maleka.
ADV VINCENT MALEKA SC: Yes Chair subject to your directions on the Section 34
reports.
MR IAN HAMISH SCOTT SINTON: Yes.;
ADV VINCENT MALEKA SC: That would be the evidence of Mr Sinton.
CHAIRPERSON: Yes.

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ADV VINCENT MALEKA SC: And I suppose we can ask you to release him until that
point in time.
CHAIRPERSON: Yes. Ja No thank you. Thank you Mr Sinton. We will release you
and there is still the matter that the legal team will deal with with regard to the
confidential information and I am sure they will be in touch with you in due course and
to the extent that it may become necessary to ask you to come back then you would be
asked to come back. But for now you are excused.
MR IAN HAMISH SCOTT SINTON: Thank you Chair.
CHAIRPERSON: Thank you.
10

ADV VINCENT MALEKA SC: Chair the intractable problem relates to the evidence of
Mr Marsden and the evidence of Doctor Ramontja that we would like to lead in order to
complete.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: This phase of the Eskom leg of the presentation.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: Mr Marsden is here and I am sure that he will be willing
to come tomorrow we did raise that issue with him.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: We understand from our colleagues that you have

20

another issue that you have to deal with tomorrow.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: Relating to the applications.
CHAIRPERSON: Ja at nine o’clock I will deal with an application for leave to cross examine an application by Mr Moyane to for leave to cross-examine Minister Gordhan.
I will hear argument. I think that should not take us beyond an hour.

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ADV VINCENT MALEKA SC: Oh we grateful for that Chair.
CHAIRPERSON: And their might be one or two small issues that might be raised that
time I would need to deal with that relate to one application another of one kind or
another that I might be told about but which should not take more than a few minutes.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: So then thereafter we can then start with your next witness.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: I am – is the position that in terms of witnesses we – you have two
witnesses for tomorrow?
10

ADV VINCENT MALEKA SC: Yes Chair.
CHAIRPERSON: Okay, okay.
ADV VINCENT MALEKA SC: We would like to complete them tomorrow because we
understand that from Thursday and Friday.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: You are engaged in other matters.
CHAIRPERSON: Yes no no that is fine. Tomorrow in terms of what to finish the
minimum we have agreed to still stands namely half past four.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: But should it be necessary from my side I could go up to five o’clock.

20

ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: So we will try and finish with them tomorrow.
ADV VINCENT MALEKA SC: Indeed Chair. And Chair lastly just to confirm the file of
Mr Marsden has been given to your registrar.
CHAIRPERSON: Okay.
ADV VINCENT MALEKA SC: With appropriate…

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CHAIRPERSON: Explanations or…
ADV VINCENT MALEKA SC:

Explanations and arrangements according to your

requirements.
CHAIRPERSON: Okay.
ADV VINCENT MALEKA SC: So that you do not have to shuffle around to locate it.
CHAIRPERSON: Okay.
ADV VINCENT MALEKA SC: This time around we are lucky that the administration
complied with your directions.
CHAIRPERSON: Yes okay, okay.
10

ADV VINCENT MALEKA SC: And then the file of or the statement of Mr Ramontja is in
a file previously given to you under Exhibit U2 File 3.
CHAIRPERSON: Okay just make sure that my registrar knows exactly.
ADV VINCENT MALEKA SC: Yes we will ask her to bring it along tomorrow.
CHAIRPERSON: Ja.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: Okay. No that is fine. Would that be all?
ADV VINCENT MALEKA SC: That will be all Chair.
CHAIRPERSON: That will be all.
ADV VINCENT MALEKA SC: And again thank you for sitting until late.

20

CHAIRPERSON:

Okay no thank you.

We will now adjourn until tomorrow and

tomorrow we will start with the other application at nine and once we have finished with
one and maybe one or two small matters we will then proceed to the hearing of the next
witness.
ADV VINCENT MALEKA SC: Thanks.
CHAIRPERSON: We adjourn.

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INQUIRY ADJOURNS TO 13 MARCH 2019

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