The settlement sees Regiments Capital selling its Capitec shares to the Transnet Second Defined Benefit Fund.
Regiments Capital is selling Transnet its Capitec shares to settle a lawsuit that sees the firm paying R500 million to the Transnet Second Defined Benefit Fund (TSDBF).
According to Capitec CFO André du Plessis, in a statement to amaBhungane, the bank believes “persons and entities involved in state capture will improperly benefit”.
André said:
“Transnet has reached a settlement agreement with parties implicated in state capture – at the expense of Capitec.”
Capitec had issued the shares to Coral Lagoon, of which Regiments is a shareholder, with the purpose of creating an enduring broad-based black economic empowerment transaction. The agreement was that the shares were only allowed to be sold to black persons to establish a lasting black-owner relationship with Capitec.
André said that Capitec informed Transnet that the Capitec shares held by Coral can only be disposed to black persons, that Capitec’s consent is required, and that the bank was not a party to the settlement agreement between Transnet, Regiments and Coral.
When Coral approached Capitec for its consent, the bank refused to avoid forfeiture of the direct black ownership of these shares.
"The effect of Transnet and Coral's court actions is that persons and entities involved in state capture will improperly benefit, since the settlement amounts to a significant discount to Transnet's claims against Regiments and related parties implicated in state capture – at the cost of Capitec's contractual rights," André said.
He added that the shares held by Coral in Capitec are further subject to restraint orders obtained by Transnet, which remain in place and have not been set aside.
“According to the court documents, the proposed settlement amounts to a significant discount to Transnet’s claims against Regiments,” André said. In Capitec's view, there are other solutions that would enable Regiments to dispose of its Capitec shares without Coral breaching the terms of its agreement with Capitec.
AmaBhungane reported that the lawsuit, which was launched two years ago, claimed that Regiments had irregularly gained R230 million as part of Transnet’s locomotive purchase deals. TSDBF recently added a further claim of R349 million to the lawsuit.
