Bain & Co, Nedbank deny facilitating corruption in SA

Bain was implicated in misconduct related to its dealings with the country’s tax agency, while the Zondo Commission raised concerns around Nedbank’s interest swaps agreement with the Airports Company South Africa, which involved Regiments Capital.
JSE-listed Nedbank says it is currently conducting a comprehensive review of the Zondo Commission's findings and recommendations and has taken note of concerns related to transactions that it was party to. Image: Shutterstock

Global consultancy Bain & Co. and Nedbank Group, South Africa’s fifth-largest lender, denied willfully facilitating or being party to corruption after a judicial inquiry found their conduct wanting in their dealings with state-owned firms.

A panel, headed by acting Chief Justice Raymond Zondo, concluded in the first of a three-part report that the state was “captured” during former president Jacob Zuma’s rule, with top government officials and the private sector colluding to loot taxpayer funds.

The report was published earlier this week after more than three years of testimony from hundreds of witnesses.

Bain was implicated in misconduct related to its dealings with the South African Revenue Service (Sars).

Bain, Zuma and Moyane colluded to seize and restructure Sars
The looting of Eskom, Transnet and SAA by the Gupta media enterprise

Zondo’s panel found the Boston-based company met with Zuma and former tax Commissioner Tom Moyane before it was signed up as a consultant, and it was clear it would be given a contract to revamp the tax agency’s systems prior to the start of the tender process.

Pre-emptive appointments were made to “ensure that the necessary pre-planning could be done to redirect the resources of the organisation and assume control,” Zondo said.

He recommended that all Bain’s contracts with state entities be re-examined to ensure they were legally compliant and called on law-enforcement agencies to investigate if there were grounds for prosecutors to lay charges in connection with the awarding of any of the deals.

Bain’s denial

Bain said Zondo’s report “mis-characterises” its role at the tax agency.

It said that the panel relied too heavily on testimony from one witness with no first-hand knowledge of its work and that two affidavits it submitted appear not to have been considered.

“While we made mistakes in our work with Sars, we remain confident that we did not in any way willfully or knowingly support state capture at Sars or elsewhere,” Bain said in a statement on Friday.

Zuma and Moyane have both repeatedly denied any wrongdoing. However, South Africa’s government has previously criticised Bain’s conduct.

Bain’s role in dismantling Sars
The reign of Bain is on the wane
Transnet wants R1.2bn back from McKinsey

“Bain deliberately plotted to reverse the hard work between 1994 and 2014 to build tax morality and Sars into a world-renowned revenue collection agency,” Ismail Momoniat, a deputy director-general at the Treasury, wrote in a column published in Business Day newspaper in 2019.

Nedbank and Acsa Interest Swaps

The Zondo Commission separately noted that some transactions involving the processing of billions of rand worth of interest-swap agreements that were entered into between Nedbank and Airports Company South Africa (Acsa), which operates the nation’s main airports, were “disturbing.”

An arrangement Nedbank had agreed with Regiments Capital, which advised Acsa, saw Regiments being “incentivized” to act contrary to its client’s interests, according to Zondo.

Regiments ensured that Acsa paid a bigger margin on the swaps to Nedbank, increasing its half share of that margin in the process, he said.

Corruption Watch demands accountability and action following release of initial Zondo Commission Report
Saica will investigate all members implicated in state capture
Regiments and Trillian: Whistleblower joins the dots

The commission also found Nedbank acted on Regiment’s advice without seeking to confirm the swap arrangement terms with Acsa. The commission ran out of time to hear the lender’s evidence related to the transactions, which required further investigation by the relevant authorities, Zondo said.

Nedbank’s Response

Nedbank is currently conducting a comprehensive review of the panel’s findings and recommendations and has taken note of concerns related to transactions that it was party to, it said in an emailed statement.

“We remain of the view, as previously stated, that there has been no wrong-doing on the part of Nedbank in relation to these transactions,” it said.

“Based on our initial review, no adverse findings have been made against Nedbank in terms of the first part of the report.”

Both Bain and Nedbank pledged to continue cooperating with authorities.

Read: Nedbank denies complicity in SA corruption, shares fall

© 2022 Bloomberg


Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in and an Insider Gold subscriber to comment.


and in other news, former prisoner zuma and all the zuptas denied all wrongdoing alleged in the first Zondo report.

Methinks that the Nerdbank okes are fully complicit !!

Maybe Nedbank is not specifically part of state capture – the banks probably operate like that with anybody, not just SOE and Regiment’s crooks. The terms and kickbacks on these swaps were predatory.

That is worse for us all.

I believe that those people at Nerdbank knew exactly who they were dealing with and what was going on !!
The income to their pockets were just too good to resist !!

In Bain’s defense….if you can’t trust a country’s President then who can you trust? Although being based in a country with a President who was also a stranger to the truth, might have confused their thinking somewhat! At the end of the day…when it comes to making a profit…business is business… no time to be altruistic! That’s just the way of the world these days.
If the Zondo commissions findings are going to be acted upon ( which is still debatable) then don’t go after the “facilitators” rather go after the “masterminds” first and then the facilitators next if need be.

End of comments.



Subscribe to our mailing list

* indicates required
Moneyweb newsletters

Instrument Details  

You do not have any portfolios, please create one here.
You do not have an alert portfolio, please create one here.

Follow us:

Search Articles:
Click a Company: