Nedbank readies for legal showdown with Transnet

 ·28 May 2024

Mediation between Nedbank and Transnet over interest rate swap transactions (swaps) from 2015 and 2016 has ended.

The bank said that there is no likelihood of resolving the matter amicably, which Transnet sees as tainted by corruption.

“The bank’s willingness to discuss any potential settlement in mediation has always been exclusively on the basis that any settlement should never be construed as being an admission of guilt or involvement in corruption on Nedbank’s part,” said the Big Four bank.

“As a matter of principle, Nedbank is not prepared to settle on any basis where this could be inferred.”

“Nedbank has previously alerted its shareholders, in its 2022 and 2023 Integrated Reports, to the risk of litigation by Transnet should mediation fail. Nedbank will strongly defend itself in any litigation proceedings that may follow.

It said that it was not provided with any evidence of collusion or corruption on the part of its staff and rejected Transnet’s attempts to blame the bank for its own governance failures.

“Nedbank was not and could not have been aware of the apparent collusive relationships that the Regiments Group had forged with senior officials at Transnet or the links that the Regiments Group apparently had with the Guptas, which were first reported in the media around May 2016 – after the swaps had been concluded.”

“Regiments Capital, and not Nedbank, was the appointed adviser to Transnet. Nedbank did not advise Transnet on the swaps at all and did not pay any fees to the Regiments Group in respect of the swaps.”

“The swaps were authorised by Transnet’s mandated officials, were documented using industry-standard ISDA legal agreements and confirmed and settled directly between Transnet and Nedbank.”

The bank said that the swap transactions were commercially sound and its margin was reasonable considering the risks involved.

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