City of Joburg cuts ties with controversial fund managers Regiments
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JOHANNESBURG - The City of Joburg (COJ) on Thursday announced it has approved a report authorising settlement negotiations with Regiments Capital Fund Managers (Regiments) in order to terminate its relationship with that institution, which has allegedly been linked to state capture.
Forensic reports implicated Regiments in possible wrong doing. The fund managers were allegedly paid billions of rand by State-owned companies that include Transnet and Eskom in questionable circumstances for dubious contracts between 2015 and 2017.
Among the reasons why the COJ sought to end its relationship with Regiments, was the negative publicity around the fund managers. In Feubruary reports allged there were links between Regiments and Gupta linked Trillian Advisory Services. The Guptas are being investigated by SA authorities for questionable business practises.
The negatice publicity had impacted on COJ's reputation and integrity.
COJ also said that Regiments failed to honour the full redemption payments that were due in June, and also failed to timeously advise Denel would not be in a financial position to meet its obligations in respect of the unsecured loan amounting to R290 million that matured in June.
"In the interests of a swift end to our relationship with Regiments, the City will seek to terminate its relationship with the fund managers via mutual agreement. It is our hope that this agreement can be finalised within the coming weeks," Joburg Mayor Herman Mashaba said in a statement.
"As part of the City’s investment structure, the City utilises a sinking fund to pay back inherited debts and investments made to the City, amounting to over R18 billion. Regiment’s handling of our residents' hard earned money is thus of serious concern to the City."
Mashaba said COJ has appointed an external independent firm of attorneys to conduct a comprehensive forensic investigation into the sinking fund, covering the period 2005 to date and will include the circumstances and processes surrounding the appointment of Regiments.
"Already, significant progress has been made with the forensic investigation and the outcome is expected soon," Mashaba said.
"It is expected that this will once again expose senior members of the former administration, whose actions not only robbed the residents of this City, but ultimately aided the nefarious state capture project which has paralysed government at a national level."