Trillian Blocked Probe on Nene Removal Warning, Report Says

(Bloomberg) -- A financial-services company linked to friends of South African President Jacob Zuma stonewalled an investigation into whether its management had advance warning about Nhlanhla Nene’s firing as finance minister in 2015, according to a report on the probe.

Trillian Capital Partners Ltd. refused access to electronic devices used by Chief Executive Officer Eric Wood, which could help either support or disprove allegations by a former senior employee that Wood told her Nene would be replaced more than a month before it happened, advocate Geoff Budlender said in the report, which was commissioned by outgoing Trillian Chairman Tokyo Sexwale. Wood has disputed the allegations and denied any wrongdoing.

“The conduct of Trillian management in this inquiry has left me with the impression that what it says cannot be trusted,” Budlender said in the report. “It is not possible to make a definitive finding of fact on the issue.”

The rand plunged and bonds tumbled after Zuma replaced Nene with a little-known lawmaker in December 2015 before being pressured into backtracking only days later and hiring Pravin Gordhan, who had served in the role before. Zuma fired Gordhan in a cabinet reshuffle announced after midnight on March 31, resulting in downgrades of the country’s credit rating to junk status.

The findings of Budlender’s investigation will be handed over to the nation’s prosecutors, Sexwale told reporters in Johannesburg on Thursday. Last month, he called for the country to appoint a judicial commission of inquiry to probe payments allegedly made by state-owned entities to the company and others linked to the Gupta family, who are friends of Zuma and in business with one of his sons.

State Assets

Emails leaked to local media, as well as reports by the country’s main church organization and a team of eight academics place Zuma and the Guptas at the center of an orchestrated effort to raid state assets. Power utility Eskom Holdings SOC Ltd., port and rail operator Transnet SOC Ltd., weapons company Denel SOC Ltd. and the Passenger Rail Agency of South Africa were among the entities that were allegedly targeted.

Budlender’s report showed that Eskom paid Trillian Capital Partners 266.1 million rand in fees last year, negating a Dec. 2 statement by Public Enterprises Minister Lynne Brown, who said that Eskom had no contracts with Trillian.

Trillian is linked to the Gupta family through Salim Essa, its principal shareholder. He didn’t answer phone calls seeking comment. Zuma and the Guptas have denied any wrongdoing. A spokesman for Wood declined to comment and said he would issue a statement later.

Today is the last that Sexwale and five directors will serve at Trillian, the chairman said.

“This corruption of state capture, related to a particular family, is destroying our organization,” Sexwale said, referring the ruling African National Congress. State capture is a term used in South Africa to describe undue influence on government by private business interests. “The image of the country, don’t even talk about that abroad.”

Sexwale aborted a bid to challenge Zuma for leadership of the ANC in 2007, and was dropped from his cabinet in 2013.

To contact the reporter on this story: Arabile Gumede in Johannesburg at agumede@bloomberg.net.

To contact the editors responsible for this story: Rene Vollgraaff at rvollgraaff@bloomberg.net, Liezel Hill, Ana Monteiro, Helen Nyambura-Mwaura