Nedbank, Transnet mediation over swaps terminated

28th May 2024

By: Tasneem Bulbulia

Senior Contributing Editor Online


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Mediation between financial services group Nedbank and State-owned Transnet, in respect of interest rate swap transactions (swaps) between the parties that took place in December 2015 and March 2016, and which have been widely reported in the media for many years, has ended after it became apparent that there is no likelihood of resolving the matter amicably despite extensive engagements, Nedbank informs in a statement.

Nedbank says it participated in the mediation process, which was a confidential, facilitated negotiation, in an attempt to resolve the dispute between the parties amicably and to avoid potentially drawn-out and costly litigation, for both parties, over transactions which Transnet regards 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.

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

Nedbank has previously alerted its shareholders, in its 2022 and 2023 Integrated Reports, to the risk of litigation by Transnet should mediation fail.

Nedbank says it will strongly defend itself in any litigation proceedings that may follow.

The group avers that it is not aware of, nor has it been provided with any evidence of collusion or corruption on the part of Nedbank or its staff, despite requests for disclosure of such evidence.

Nedbank also says it rejects any attempt by Transnet to blame the bank for “its own governance failures”.

The group avers that it 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 are said to have 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 points out.

It adds that the group did not advise Transnet on the swaps at all and did not pay any fees to the Regiments group in respect of the swaps.

According to Nedbank, the swaps were authorised by Transnet’s mandated officials, were documented using industry standard International Swaps and Derivatives Association legal agreements and confirmed and settled directly between Transnet and Nedbank.

Nedbank says it believes the swap transactions were commercially sound and the bank’s margin was reasonable for the risks assumed.

“Considering internal and independent external reviews commissioned by them, the Nedbank board and management remain satisfied that Nedbank internal governance procedures were followed in respect of the transactions and that there is no evidence of any Nedbank staff dishonesty, corruption or collusion. Nedbank stands by its previous statements on the matter,” the group emphasises. 

In a seperate statement, Transnet says that it does not agree with the contents of Nedbank's statement. Rather, the entity says it is of the view that there is a case for Nedbank to answer to, obliging Transnet to take positive steps to have this matter heard in court. 

Transnet says that legal proceedings will imminently be instituted by the entity against Nedbank, which would set forth the basis for its case. 

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online



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