24 April 2024 | 08:12 PM

Allegations against Regiments are ‘unsubstantiated’

Key Takeaways

We believe unsubstantiated allegations about Regiments were made to the Mail & Guardian by an unsuccessful competitor in the City of Johannesburg “sinking fund” tender process, leading to an M&G investigation substantially comprising desktop analysis and conjecture.

This culminated in several stories alleging unseemly political affiliation, conflict of interest and implied corruption by Regiments without evidence or corroboration. Regiments provided the true facts to the M&G but they were ignored or substantially obscured.

The M&G published further stories based on DA allegations founded on a telefax still uncorroborated and anonymous, ostensibly originating from the same source. The M&G repeated the original allegations, adding that Regiments was guilty of: “R1-billion looting of the sinking fund of Johannesburg”.

Setting the record straight:

    • “Unethical Regiments-ANC links”: this is pure conjecture; in fact there are no unethical Regiments-ANC links; Regiments supports democracy and transformation and contributes to various causes, including the ANC, making no apologies

 

    • “Conflict of interest in Mrs Twala-Tau’s shareholding in Capitec”: Coral Lagoon, which included Mrs Tau, mandated Regiments as corporate finance advisor leading to it becoming a shareholder; Regiments had no role in assembling the consortium; the M&G has provided no substantiating evidence

 

    • “Implied corruption in the Capitec-sinking fund link”: the implication is speculative, unfounded and uncorroborated; the “sinking fund” tender was awarded September 2005 (open tender process initiated February 2005) and the Capitec consortium mandate to Regiments occurred in about October 2006

 

    • “The “sinking fund” tender was rigged”: once again a malicious negative construct against Regiments inferred from three elements of the tender adjudication process: 1) that eight out of 12 bidders were excluded on technicalities — standard procedure in every public sector tender where compulsory requirements are specified upfront in tender documents as automatic exclusions; 2) that the weighting for track record was 30/100: standard market practice that track record weights heavily in asset management tenders on the premise that consistent past performance is the major differentiator; 3) that Regiments’s tendered fees were the highest of the four compliant bidders: more important is the ultimate economic benefit derived by Johannesburg; Regiments is proud of its performance delivery to the city over the prior mandate period

 

  • “Regiments costs taxpayers a whopping R200-million”: Regiments earned fixed fees of R5.4-million a year for managing R6-billion of liabilities against R2-billion of assets over seven years on average; Regiments delivered R100-million in excess of the liability-based benchmark, earning R25-million each year on average, in line with the fund’s exceptional performance.

Regiments is fully committed to integrity and corporate governance and is emphatically against corruption as vital to the country’s upliftment and transformation. Regiments has always lived up to this commitment in its conduct.

Regiments is committed to the freedom of the press, which must live up to the Press Code and Constitution.

The M&G Ombud, Franz Kruger (October 26) states: “It is important to make sure that all facts — including secondary ones — pass muster with the sharpest editor. But it is even more critical to ensure they cannot be challenged by the most critical readers of all, the people involved.”

This right to reply is unedited. The M&G stands by its stories.

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amaBhungane

Before joining the amaBhungane team in 2017, Micah was the national coordinator for media freedom and diversity at the Right2Know Campaign. He holds a Masters in African Studies from Oxford University and a BA Honours in History from Wits University.

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