Nedbank to Pay Transnet $34.8 Million to Settle Swap Dispute

(Bloomberg) — Nedbank Group Ltd. agreed to pay 600 million rand ($34.8 million) to Transnet SOC Ltd. in a confidential business agreement, ending a year-long legal dispute over interest rate swaps.

The companies said in a joint statement on Tuesday that the settlement, without admitting any liability, followed efforts by both parties to avoid protracted litigation and preserve business relationships.

The agreement ends litigation brought by Transnet and South Africa’s Special Investigations Unit, which sought to recover money the logistics firm “wrongfully paid” to Nedbank in 2015 and 2016 clearing transactions. The anti-corruption agency and Transnet claimed the bank made profits of more than 2.7 billion rand from the deals. Nedbank denied wrongdoing, saying its sales margin was market dependent and its actual earnings were less than 43 million rand.

The swaps were made under the advice of Regiments Capital Pty Ltd., a firm linked to the Gupta family, which allegedly used its relationships with former President Jacob Zuma to disrupt procurement processes and secure government contracts. A criminal investigation into the alleged state capture revealed the transactions were potentially corrupt, but Nedbank said it was unaware of Regiments’ alleged collusion with Transnet officials or the Guptas.

Transnet and Nedbank said the decision was in the national interest and allowed the two long-standing partners to continue working together to support infrastructure investment and economic growth.

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