The former finance boss of Eskom, Transnet - a Gupta ally - cost SA billions. What we now know
- The South African Institute of Chartered Accountants has found Anoj Singh guilty of being “grossly negligent” and “dishonest”.
- Singh was the chief financial officer of both Transnet and Eskom.
- Via him massive amounts were channelled to Gupta-associated companies.
- For more articles, go to www.BusinessInsider.co.za.
The former chief financial officer of Transnet and Eskom, Anoj Singh, has been stripped of his CA status by the South African Institute of Chartered Accountants (SAICA), who found him “grossly negligent” and “dishonest”.
He was found guilty of 12 of 18 charges relating to Transnet’s pricey locomotive deal and large contracts awarded by Eskom.
On Friday, SAICA published its findings against Singh, whose misadventures at both state-owned enterprises have been chronicled in some detailed at the Zondo commission into state capture.
Singh stands accused of colluding with Regiments Capital, which is associated with the Gupta family, in an ill-starred locomotive transaction. Regiments was an advisor on the deal, which saw the Gupta family allegedly receive R3.7 billion in kickbacks.
The deal was such a disaster – with only a limited number of trains delivered, and some that were not fit for South African railways – that Transnet now wants to cancel the outstanding contracts. Singh also stands accused of giving a Gupta-linked company massive amounts of money from Eskom’s coffers.
Here’s what role Singh played in the corruption at Eskom and Transnet, according to SAICA’s findings:
He lied about the reasons for the ballooning price of Transnet locomotives
In Singh’s initial presentation to the Transnet board, the cost of acquiring the 1,064 diesel and electric locomotives was set at R38.6 billion. Later, Singh would issue a memorandum to say that the total cost of acquisition increased to R54.5 billion - due to a number of factors including foreign exchange rates and escalation costs of R9.5 billion.
However, these costs were already factored into the initial amount, when he first presented it. “The reasons advanced for the increase were thus misleading and negligently made. The evidence suggests that Mr Singh played an important role in the production of the memorandum and therefore he would have either known or been told of the actual reasons for the increase in the total cost of acquisition,” SAICA found.
Singh fiddled the numbers on the deal
SAICA says he misled the board by failing to disclose that the increase in the cost of the deal would mean that the transaction would not be profitable for Transnet. SAICA found that Singh deliberately changed the hurdle rate for the deal - the minimum rate of return on a project – from 18.56% to a lower rate of 15.2% in order to conceal from the board that the project was no longer profitable to Transnet.
He also misled Transnet's board to believe that a cost-saving of between R6 billion and R10 billion had been realised in the conclusion of the 1,064 Locomotive deal transaction when this was not the case.
In addition, he motivated that the deal should be split: two bidders for diesel and another two bidders for electric locomotives. This was despite advice against it, given the cost implications. Transnet’s board also did not approve the splitting of the award. “He ought to have appreciated that batch splitting would result in additional costs to Transnet but he flagrantly dispelled the potential for any additional costs without considering the effect this would have for Transnet,” SAICA found.
He approved millions in relocation costs
Singh approved relocation costs for two of the bidders despite these costs not being included in the transaction, or budgeted for – and against the advice of another executive member of the Transnet team. China North Rail, one of the successful bidders, received R300 million for "relocation costs", according to Transnet.
While at Eskom, he approved R30m in payments to another Gupta firm
Trillion is a consulting firm with ties to the Gupta family. The company paid for two trips that Singh took to Dubai in 2014 and 2015 – before he joined Eskom.
Once he became chief financial officer of the power utility, Singh approved payments to the company without ascertaining whether the payments could and should be made, SAICA found.
Singh gave a Gupta mining company R600 from Eskom’s coffers
In 2016, Tegeta Exploration wanted to buy the Optimum coal mine – but it was R600m short, and the deal was about to fall through. On Singh’s instruction, Eskom then advanced R659 million to Tegetta – supposedly as a pre-payment for a supply of coal. But Tegetta was not yet the owner of Optimum Mine and Eskom had no supply agreement with Tegetta. “This was an improper use of Eskom's funds,” SAICA found.
But that’s not all. Singh then provided Tegetta with a R1.68 billion guarantee from Eskom - without the approval of the minister of public enterprises.
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