Johannesburg - The National Prosecuting Authority’s (NPA’s) Investigative Directorate (ID) is gunning for Gupta-linked company Regiments Capital just as the company was barred from paying its directors millions of rand until they settle R557 million in creditors’ claims.
The ID announced this week that it was probing R274m in alleged bribes or gratification paid in Regiments Capital’s and other Gupta-linked firms Trillian and McKinsey’s R1.9 billion contracts with Transnet.
The directorate expects to finalise the charge sheet in the Regiments matter in three months.
According to the ID, the finalisation of the charge sheet has been delayed by a protracted disagreement with Regiments Capital over the execution of the search warrant, as the company claims legal privilege in respect of a range of documents on the server and other digital devices.
It is reviewing relevant material seized during the search and seizure in November 2019, as the volume of documents is huge.
The controversial firm recently had its winding up set aside by South Gauteng High Court Judge Bashier Vally after Regiments Capital directors Litha Nyhonyha and Niven Pillay promised to pay all outstanding claims from its creditors.
Regiments Capital’s biggest creditor is the South African Revenue Service (Sars), which is owed over R279.3 million.
Sars has indicated its claim in an affidavit filed at the high court, and Nyhonyha and Pillay are co-operating with the taxman.
The Regiments Capital directors have expressed their commitment to pay Sars in full even though Pillay has admitted that the company is asset rich but cash poor.
Sars has indicated that Regiments Capital failed to file income tax returns between 2016 and 2019, and the R279.3m includes about R217.6m in income tax and R61.8m in value-added tax.
In his judgment on February 22, Judge Vally barred Regiments Capital, Nyhonyha, Pillay and related companies from paying themselves almost R114m until they have settled more than R278m owed to 10 creditors, which include Transnet.
The state-owned rail, logistics, port and pipeline company is owed R180m by Regiments Capital, while Vantage Mezzanine Fund II, which was successful in its bid to liquidate Regiments Capital in September last year, has a claim of R75m.
Transnet has indicated that it concluded a settlement agreement with Regiments Capital to pay R180m through the proceeds of its shares in Capitec Bank, which are valued at nearly R360m.
Regiments Capital holds an interest of about 60% in Ash Brook Investments 15, which owns 100% of Coral Lagoon Investments 194, a company that bought 10 million shares in Capitec Bank in 2006.
They have also been stopped from paying themselves more than R11.5m each in management fees until Sars, Transnet, Vantage and other creditors not related to Regiments Capital.
Creditors related to Regiments Capital include Regiments Telecommunications, Regiments Fund Managers Regiments Shared Services are also owed over R86 million by their parent company.
In the successful bid to overturn Regiments Capital’s September 2020 liquidation, Nyhonyha and Pillay undertook to pay all creditors not related to their company in full before Sars, Transnet, Vantage and eight others.
Judge Vally said Nyhonyha and Pillay have not been frank and transparent with their company’s co-provisional liquidators, Willem Venter and Kagiso Dinaka, and unlawfully refused to hand over documents to them.
”When asked simple facts and when asked to provide details regarding Regiment’s business and financial affairs, they responded by confounding and obfuscating,” reads the judgment.
The NPA has detailed in court how Transnet paid the Regiments companies more than R1bn through unlawful contracts, which include advising the state-owned entity in its irregular acquisition of 1 064 locomotives where the initial estimated cost escalated from R38.6bn to R54bn.
The ID is also challenging South Gauteng High Court Judge Maletsatsi Mahalelo’s October 2020 ruling unfreezing R1.1bn in assets belonging to Gupta lieutenant Eric Wood, Nyhonyha, Pillay, their companies and trusts.
According to the ID, Judge Mahalelo’s finding that it was not for the NPA to “pick and choose” what to include in its restraint application was unrealistic, as in complex matters there inevitably has to be a selection process.
”If this is not done, any judge will be utterly overwhelmed by the volume of evidence,” the ID said this week.