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Bulked up Wescoal open to more deals. The coal producer says it remains strongly positioned as a consolidator in the

coal sector and will continue to consider value-enhancing opportunities while

disposing of non-core assets.

Wescoal's acquisition of Keaton Energy last year has been a game changer,

strengthening its balance sheet and free cash generation and giving it

economies of scale and synergies as it diversified its asset base. The mid-

tier miner says it now has coal resources of about 300 million tonnes,

together with three operating mines, three processing plants and significant

interests in coal supply-chain infrastructure.

Releasing interim results yesterday, Wescoal said the integration of Keaton

was now complete. As part of a restructuring of its operations over the

period, it sold the non-core Leeuw Braakfontein and Intibane collieries.

Proceeds from the disposals were used to reduce its short-term borrowing and

fund new growth options.

Its Mining division grew revenue by 25% to 1.33 rand billion over the six months

to end-September, buoyed by the inclusion of Keaton's Vanggatfontein

operation. Total coal sales were steady at 2.4 million tonnes, with sales to

Eskom jumping 46% to 1.9 million tonnes.

Wescoal's Trading division lifted revenue by 36% to 808 rand million to

contributed 39% of total revenue.

Group revenue rose 28% to 2.06 rand billion and operating profit increased by 22%

to 197 rand million. Headline earnings jumped 30% to 103 rand million, helped by a 21%

reduction in operating expenses to 104 rand million. Headline earnings per share

came in 16% higher at 23.5c.

Its gearing ratio improved to 18% from 29% in March and 32% a year ago.

We are pleased with the operating performance, production and sales from the

broader asset base in the first half," CEO Waheed Sulaiman said. "The company

is solidly on track to meet its production targets and is well-positioned for

steady sustainable growth."

Wescoal said it remained strongly positioned as a consolidator in the coal

sector and would continue to consider value-enhancing opportunities while

disposing of non-core assets. Last month, it said it had joined a consortium

to buy Australia-listed Universal Coal.

Its shares rose 5.1% yesterday to close at 2.05 rand.

Eskom being short of coal puts Wescoal in a strategically strong position

for pricing its coal. Yes, the coal trading segment has access to coal that it

could technically supply into Eskom. Likewise, there is an export element

(currently via Glencore) that Wescoal could use.

-- Keith McLachlan (@keithmclachlan) November 13, 2018

Days of Zondo: Barbara Hogan: Despite warnings, Gama was Zuma's choice for

Transnet from the word go. So unperturbed was the then president, Jacob Zuma, that he went as far as

telling Barbara Hogan not to finalise the CEO appointment until Gama's

disciplinary case following allegations of misconduct was concluded.

Gama was eventually appointed and put in charge of the embattled state-owned

logistics utility until his suspension last month over allegations of

misconduct and maladministration involving a 54-billion rand locomotive

acquisition deal in one of the biggest scandals of the State Capture saga.

Hogan's statement to the State Capture inquiry on Monday implicates a number

of parties, including Zuma - none of whom had responded to indicate whether

they intend to challenge her testimony.

She is broadly testifying to her tenure at Public Enterprises, the most

significant scene of the State Capture crime as it affects Transnet, SAA,

Denel and Eskom. She was fired by Zuma in 2010, weeks after the Guptas

allegedly offered her job to former ANC MP, Vytjie Mentor.

Testifying before deputy chief justice Raymond Zondo at the State Capture

inquiry, Hogan said her encounter with the President, a mere month into the

job in 2009, had left her shocked.

Gama had made it onto a shortlist of contenders for the powerful position but

Hogan testified that she got the distinct impression that Zuma had him on his

mind prior to even being provided with the list of suitable candidates.

She said Zuma was not interested in Sipho Maseko, a stellar candidate whose

appointment had been stalled by her predecessor, Brigitte Mabandla who had

wanted to "consult" more widely on a Board recommendation that the renowned

executive be appointed.

Hogan thought it appropriate to meet Zuma soon after taking up the Cabinet

portfolio in order to provide him with an extensive information pack about the

various candidates and at that stage, Maseko being the number one choice.

"I was extremely shocked. The president would not hear of any candidate except

for Siyabonga Gama.

"I told him how professional the search was, that Gama faced serious

misconduct charges and that the board, in terms of the PFMA had to investigate

those."

Hogan, upon realising Zuma's intentions, said she told him it would not be

ideal to appoint Gama, especially in view of a decorated executive like Maseko

who had previously been CEO of BP Africa and who had sailed through the

rigorous recruitment process with extensive and verified academic

qualifications, a criminal check, experience and a track record.

Maseko , currently CEO of Telkom, essentially sounded like a dream CEO for the

parastatal when the position became vacant following the departure of Maria

Ramos.

Hogan said she went further and met Maseko twice after being presented with

his CV and interview pack.

She informed the ANC's Enoch Godongwana and former president Kgalema

Motlanthe, who both supported his appointment.

Despite all that, Zuma said Gama must be the CEO. "It shocked me. He then said

to me that I could not appoint anyone until Gama's DC is done. Until that DC

is done you cannot appoint anyone," Hogan testified.

She said over the course of her time in government, she had consulted Cabinet

colleagues about whether the President had the power to interfere or stop a

process and told the Commission that she was told there was no condition that

the President ever had to approve of an appointment.

Asked whether the president could unilaterally, outside of a Cabinet process,

rescind decisions relating to the appointment of a Board for a parastatal or a

recommendation for a CEO, Hogan said, legal opinion that she obtained had

determined that the president was not entitled to do so.

Justice Zondo asked Hogan if a minister could canvass the opinion of the

president ahead of submitting recommendations to Cabinet. She said this was

possible but that it would amount to consultation and would not entail the

president interfering with the executive authority of the minister in

question.

Hogan's testimony continues. DM

Professor Balthazar: What's the murky truth behind the Gordhan subpoena,

Mkhwebane? Let us leave the EFF aside for the moment and concentrate on the Public

Protector, Busisiwe Mkhwebane. It is no exaggeration to say that to date her

tenure has been calamitous. In particular her ill-advised intervention into

the ABSA lifeboat saga, in which she went so far as to recommend a change to

the mandate of the Reserve Bank, is cause alone for a reconsideration of her

remaining in office.

Recall that a full bench of the North Gauteng High Court found that Mkhwebane

was biased and had failed to properly comprehend her office. For example, the

court said the following of her:

"The Public Protector did not conduct herself in a manner which should be

expected from a person occupying the office of the Public Protector... She did

not have regard thereto that her office requires her to be objective, honest

and to deal with matters according to the law and that a higher standard is

expected from her. She failed to explain her actions adequately.''

As if that were not sufficient, the court ordered the Public Protector to

personally pay 15% of the costs incurred by the applicant parties, as a mark

of its displeasure of her conduct.

A few weeks ago the Public Protector was back in court, this time because the

Democratic Alliance and the Council for the Advancement of the South African

Constitution applied to have her report on the Vrede Dairy project in the Free

State set aside.

Central to the case was the argument that the Public Protector did not include

findings related to high-level politicians who played a central role in the

project. Judgment in this case has been reserved and thus comment on the

merits will have to be stayed. It is, however, of considerable interest that

in this case the Public Protector complained that her lack of resources

impeded her work, including in this case.

In the light thereof it is astounding that she has suddenly found the

resources to warm up an old breakfast and subpoena Gordhan in respect of the

case of Ivan Pillay, his retirement and re-employment. The mercifully retired

NPA head Shaun Abrahams sought to employ this case in the fight against

Gordhan but even he, unrenowned as he was for his forensic skill, withdrew the

case.

From what has been claimed by Gordhan's lawyers, the Public Protector has

still not made clear the nature of the case that she wishes Gordhan to answer

to nor why Abraham's final reading of the legality of the Pillay payments was

wrong.

So precious resources are being expended on yet another attack on Gordhan

while a host of monumental cases of corruption are left alone, including those

relating to the various state enterprises, local governments, and a range of

Gupta-linked companies, to these bodies.

At the very least the public is entitled to a detailed justification from the

Public Protector as to the basis of her priorities in a country where massive

levels of corruption have been publicly exposed. Is she protecting the public

interest or the interest of a segment of the public?

At the same time the EFF has posed a series of questions to Gordhan. That is

their right as MPs, but there is one question which appears to be an assertion

rather than a question. It relates to former SARS commissioner Tom Moyane.

It appears as if the point is taken that Gordhan has his own motive for

ensuring the removal of Moyane. Again, let us leave aside the issue of

whatever Gordhan might think.

The Nugent Commission has made damning findings against Moyane. From a welter

of evidence it has found that the once formidable SARS was degraded under the

Moyane tenure. In turn this caused significant shortfalls in revenue.

Eventually this prompted an increase in VAT to plug the fiscal hole caused, in

part, by the shortfall in tax revenue collected.

This then had serious implications for the poor, as VAT was increased and less

money was available for services and infrastructure designed to benefit

millions of poor people who continue to be disadvantaged. On what basis can it

ever be argued that it is not rational to replace the SARS commissioner?

All of this shows the level of political contest in present-day South Africa.

To move into more accountable and transparent waters, institutions such as the

Public Protector and SARS need to be central to the propulsion of the country

away from the murky waters of the past decade. DM

Interwaste declines after it’s told to close landfill site. The waste management company is currently the subject of a takeover bid by

French group Sch Environment.

Interwaste's shares fell more than 6% yesterday after it was told to close the

FG Landfill site in Midrand. The move could put a bid by French water recovery

and treatment group Sch Environment at risk.

In a statement yesterday, the waste management company said it had received a

directive from the Department of Environmental Affairs to cease operations at

the site, which has been at the centre of a tussle between Interwaste and

local residents. In February, the North Gauteng High Court ruled in

Interwaste's favour in a dispute over the validity of its licence.

Residents of the area have companied about air pollution and a stench in the

area. They blame it on the site, which previously received mining waste from

platinum miner Lonmin. Last year, the Department ordered the closure of the

site and commissioned experts to investigate its environmental impact.

Last week, the company said it had received a 1.20 rand per share offer from Sch,

a 47.9% premium to the 30-day volume weighted average share price of

Intercaste's shares as at 28 September, the trading day before it announced

that it was in talks. However, according to the offer, the scheme can be

terminated if any material adverse change occurs.

Interwaste's Facilities business, which includes the FG Landfill site, was the

only unit to underperform last year due to lower volumes arising from stagnant

growth and uncertainty over the validity of its licence to operate the site.

Interwaste said it had taken the Department's directive under review.

Its shares closed 6.3% lower at 1.04 rand yesterday.

Mobile saves Telkom as landlines ring off. The telecoms operator grew mobile customers by 50% in the six months to end-

September but BCX weighed on earnings.

Telkom is ringing up sales to mobile customers as revenue from landline

customers starts to dwindle. The telecoms operator grew its mobile customer

base by 50% to 6.5 million in the six months to end-September, using broadband

and cheap data-led products to attract new users.

However, although new revenue streams are compensating for the decline in

traditional products they are not as profitable. It's trying to stimulate more

data traffic to preserve its margins.

As well as its growing mobile business, Telkom says its Openserve and Gyro

businesses also contributed positively to first-half results. Openserve, a

wholesale infrastructure connectivity provider, marginally increased its

revenue, despite the decline in traditional revenue. Gyro, which manages masts

and towers, property development and property management services, continued

to grow external revenue and the mast and tower portfolio tenancy ratio.

On the downside, enterprise business BCX was negatively affected by the weak

economy as well as the decline in voice revenue. The group said large

corporates reduced or deferred spending, while public sector ICT spend

remained subdued.

Operating revenue rose 5.2% to 10.8 rand billion as a 54% rise in Mobile service

revenue to 3.58 rand billion compensated for a 7% decline in Fixed service revenue

to 10.8 rand billion. Information technology revenue improved by 3.3% to 3.77 rand

billion. Earnings before interest, tax, depreciation and amortisation (EBITDA)

increased by 2.9% to 5.32 rand billion but headline earnings per share (HEPS) fell

3.3% to 288c. Adjusted HEPS, which exclude the impact of voluntary early

retirement and severance packages of 282 rand million and the related tax impact

of 80 rand million, rose 10.3% to 328.6c. It's reduced its interim dividend y 5.1%

to 112.14c per share.

Telkom said high-demand spectrum was likely to be licensed within the next 12

to 18 months. However, it said the 700 MHz and 800 MHz bands would only be

commercially available after completion of digital migration and restacking.

It also expects the Electronic Communication Amendment Bill to be passed

within the next few months.

We believe that our operating environment will continue to be challenging with

macroeconomic conditions not being favourable to growth, and the private and

public sectors respectively deferring spend on ICT," Telkom said. "Our

strategy, therefore, will be more focused on pockets of growth, while we

continue extracting efficiencies from past investments and driving a

sustainable cost management approach."

Its shares closed 5.1% lower at 52.34 rand yesterday.

Telkom results are out today with the company posting revenue growth and a

slight decline in the adjusted HEPS.

I'm interested on their view that the Spectrum Auction will drive data

prices up in order to recoup the cash spend. @TelkomZA

-- Siba (@s_nombebe) November 13, 2018

Another telecoms company, Telkom has increased its customer base. Despite

tough economic times, Telkom's customers increased by 50% they now have 6.5

million mobile customers. #eNCA #TelkomResults

-- Heidi Giokos (@Heidigiokos) November 13, 2018

Anderson outmuscles Thiem to win ATP Finals opener. by John WEAVER

Kevin Anderson made an impressive debut at the ATP Finals on Sunday, beating

Dominic Thiem 6-3, 7-6 (12/10) as Roger Federer prepared to launch his bid for

the 100th title of his storied career. South African giant Anderson came into

the match with a healthy 6-2 lead over Thiem in head-to-heads but had lost

their two most recent meetings, including a straight-sets defeat at the US

Open. The Wimbledon finalist, who stands at 2.03 metres (six feet eight

inches) tall, established an early grip on the match at London's O2 arena,

dominating the early exchanges and securing the crucial break in the fourth

game. The 32-year-old, making his debut at the season finale, won 84 percent

of his points on serve in the first set, compared with just 58 percent for his

ragged Austrian opponent. Thiem tightened up his game in the second set and

looked far more aggressive, with his serving numbers rocketing higher but

Anderson held firm to take the set into a tie-break. In a see-saw tie-break,

25-year-old Thiem had two chances to level the match but Anderson kept his

cool to seal the victory with an ace on his fourth match point. "I definitely

felt a little bit nervous," said Anderson. "But I was able to settle very

quickly and find a really good rhythm, taking care of my serve games nicely,

created quite a few opportunities on his serve. "He wasn't serving at, you

know, well, a very high first serve percentage... I think overall just getting

off to a good start helped me a lot today." Anderson, who reached a career-

high ranking of number five in July, said he was getting more used to dealing

with pressure situations. "It doesn't always work out but I definitely feel

like I'm getting more and more comfortable in those situations, in settings

like today, against some of the best players in the world," he said. In the

later match in the Lleyton Hewitt group, second seed and six-time champion

Roger Federer takes on Japan's Kei Nishikori. The title is contested by the

eight players who have accumulated the most ranking points over the season and

is in a round-robin format, with the best four players reaching the knockout

semi-finals stage. World number one Novak Djokovic, who heads the Guga Kuerten

group, will be in action on Monday against John Isner while Alexander Zverev

takes on Marin Cilic. Djokovic, who replaced Rafael Nadal at the top of the

rankings last week, was Sunday presented with the 2018 year-end ATP World Tour

number one trophy. He is one of only four players in ATP rankings history

(since 1973) to have clinched the year-end top spot on five or more occasions,

joining Pete Sampras (six), Jimmy Connors and Federer (both five times). DM

EVITA'S FREE SPEECH: Ep. 168: Evita proves service is deliverable (Video).

The Week Ahead of 13 November 2018. Trump's wings clipped-to an extent.

As anticipated in last week's note, the US midterm elections delivered a split

Congress, with the Republicans losing control to the Democrats in the House of

Representatives, though surprisingly the Republicans managed to increase their

representation in the Senate. This probably means that the Fed's policy of

gradual tightening will remain in place, as President Trump's latitude to

interfere with the Fed has been compromised with this result. Trade policy,

however, remains Trump's executive remit, and global trade will probably

continue to weaken in response. Emerging markets will probably have to keep on

hiking as a result.

A divided congress may well result in a return to legislative logjams, and

with that a reduction in the likelihood of further fiscal stimulus such as tax

cuts. US economic growth is likely to decline in the absence of further fiscal

stimulus and there are even some observers who are talking of a recession in

the US by 2020.

One way to avoid such a downturn in the economy would be to resuscitate

Trump's plan to greatly increase infrastructure spending. While there is broad

agreement between the two political parties on the need for infrastructure

spending, the parties disagree on how a big infrastructure spend should be

financed. The American Society of Civil Engineers calculated as far back as

2014 that $4.2 trillion would be needed to be spent on American infrastructure

just to bring it up to modern-day standards. This type of money cannot just be

rustled up by big government in the US; it would need to be financed largely

by the private sector which would, in return, seek all sorts of tax incentives

for doing so. The last time such an ambitious plan, with bipartisan support in

congress, came to fruition in the US was in the 1950s and 1960s with the

financing of the interstate highways.

The US Federal Reserve kept rates steady at its Nov meeting last week. Expect

a 25 basis point hike at the Dec meeting and a further four hikes in 2019.

After peaking at over $85/bbl on Oct 3, the Brent Crude Oil price has

plummeted to around $70/bbl. US crude prices, as proxied by West Texas

Intermediate (WTI) have experienced an even steeper decline and are now in

bear market territory. WTI has fallen for ten straight days in a row-the

longest losing streak since July 1984, according to S&P Global Platts. Reasons

for the plunge include Saudi Arabia pumping crude at record levels, US

frackers greatly increasing production and Iran being let off the hook to a

limited extent regarding sanctions by the Trump administration. The US

recently surpassed Saudi Arabia and Russia as the world's largest oil

producer.

However, global crude demand remains strong and if Iran oil sanctions are made

tougher in future, that could help lift prices again. US frackers are pumping

at full capacity and are running out of pipelines, so they have limited if any

ability to deal with any unexpected increases in demand.

The JSE All Share Index (Alsi) fell almost 1 000 points during last week,

ending on Fri 9 Nov at 53 295. Richemont came out with reasonable results,

although they were below analyst expectations and closed sharply lower.

Naspers, the largest stock by market capitalization on the JSE, ended the week

lower then where it started.

Companies reporting this week ;

12 November 2018

Vodacom - Interim

Economic related events this week ;

14 November 2018

SA Retail Sales - September

Follow @Comrade_Skhokho

Vodacom’s BEE deal shrinks profit. The network operator faced once-off costs to facilitate the 16.4 rand billion

sequel to YeboYethu.

Vodacom's 16.4 rand billion empowerment deal in September is the biggest in the

telecoms yet, eclipsing the 7.5 rand billion YeboYethu transaction struck 10 years

ago. It's also come at the expense of first-half profit due to the once-off

costs associated with the deal. To facilitate the new black economic

empowerment structure, it issued an additional 114.5 million shares.

Reporting back for the six months to end-September, the network operator said

SA revenue rose 3% as it added 2.5-million new contract and prepaid customers.

However, they spent less on the network, resulting in lower average revenue

per user (ARPU).

International it said Tanzania benefited from strong commercial momentum and

robust customer growth despite the intensified pricing pressure from

competitors. The DRC and Mozambique both delivered strong results. Service

revenue increased by 12.8% to 9.4 rand billion as it added 2.3 million new

customers, mostly in Tanzania and the DRC. Mobile money business M-Pesa grew

revenue by 25.2% to 1.4 rand billion and now contributes just over 15% of

International service revenue. In Kenya, Safaricom contributed 1.4 rand billion to

profit after an amortisation charge of 3.4 rand million.

Group revenue increased by 5.6% to 44.4 rand billion and was 5.4% higher at 42.7 rand

billion under the new International Financial Reporting Standards (IFRS) 15

accounting methodology. Under IFRS 15, service revenue rose 5.8% to 34.6 rand

billion and earnings before interest, tax, depreciation and amortisation were

up by 4.1% to 16.5 rand billion. Headline earnings per share (HEPS) declined by

13.5% to 387c, impacted by the new BEE deal and partially offset by

contributions from Safaricom. Excluding those transactions, it said HEPS would

have been 6% higher. It's raised its interim dividend by 1.3% to 395c per

share from 390c.

Vodacom said while it was encouraged by recent progress made in the regulatory

environment, including a clearer timeline on the allocation of 4G and 5G

spectrum, a number of concerns and inconsistencies remained following the

publication of a revised Electronic Communications Act and policy direction to

ICASA regarding unassigned high demand spectrum.

Greater certainty is required to sustain the high level of investment that the

industry commands," the person who said it here which is red "We remain

hopeful of finding an amicable solution to the finalisation of the new ECA,

the process to allocate unassigned high demand spectrum and the market review

by the regulator."

Its shares closed 67.7% lower at 120.30 rand.

Vodacom interim results - Group service revenue up 6.1% to 36.8 rand billion and

Group revenue increased 5.6% (5.4%) to 44.4 rand billion. VOD added 4.8 million

customers in the six months, up 10.7%, comprising 2.5 million in South Africa

and 2.3 million in Internationally

-- Travis Robson (@Travis_Robson) November 12, 2018

AMABHUNGANE: Guptas 'tried to use front' to extract Sahara assets. While the purported buyer of two aircraft owned by Sahara Computers was a

Dubai-based clothing trader, questions raised by Nedbank and the Reserve Bank

about the transaction exposed Gupta son-in-law Akash Garg Jahajgarhia as the

hidden hand behind the purchase.

Garg is the young man who married Vega Gupta at the controversial 2013 Sun

City mega-wedding that was partly funded from laundered Free State government

cash.

20-million rand is a small amount in Gupta terms, but the fronting and Garg's role

indicates the process by which the Guptas may have hidden their influence in

much larger deals, such as their 2017 attempt to "sell" their interest in

Optimum Coal via a Swiss company, Charles King.

There are suspicions that the Guptas attempted to externalise their holdings

via place-holders with whom they were acting in concert, although in the case

of Charles King this remains unproven.

Now the more modest attempt to sell two of their aircraft, a Hawker XP 400 jet

and a Kingair 350 twin prop, seems to have exposed Garg as one of their

patsies.

The aircraft saga began on 26 March when a Dubai company named AGEV Investment

Limited attempted to make a payment through Bank of Baroda to Sahara Computers

in the amount of $1.7-million (about 19.7-million rand at the time).

The transaction was described as "payment for inventory".

Nedbank, which hosts the Baroda banking platform in South Africa, queried this

payment, leading the Baroda South Africa bank manager, Gurbax Singh, to write

on 27 March to Ravindra Nath and Ronica Ragavan of Oakbay Investments.

Oakbay is the main holding company for the Guptas' investments in South

Africa.

Baroda's Singh asked about the purpose of the transaction and requested

supporting documents.

Later that same day Nath sent back a letter purporting to be from a Deepak

Raswant, a director of AGEV, confirming that AGEV made a payment in the amount

of 19,669,000 rand to Sahara on behalf of Ess Emm International FZE, the clothing

trader, "pursuant to the business association between AGEV and Ess Emm".

The letter stated: "AGEV have to make some payments to Ess Emm and as per

their request, Ess Emm asked to make a direct payment to Sahara."

The next day, 28 March, Singh wrote back to Nath.

"Who is AGEV... Who is Ess Emm International... Why would there be a Payment

for Inventory if Sahara has effectively shut down, according to press

reports?" Singh asked.

Nath immediately replied explaining that Sahara was closed, but the assets

such as aircraft and vehicles were being sold to raise funds to repay the

company's bank overdraft with Baroda.

Nath said Ess Emm was a private company buying aircraft for business use. They

were purchasing the two aircraft as per sale agreements already provided to

the bank.

Sale agreements for both aircraft were signed in October 2017 in Sandton on

behalf of Sahara.

An hour later, Nath forwarded another letter from AGEV in which Raswant gave

an anodyne description of AGEV as an "investment holding company...

historically focused on private equity investments in the mining and natural

resources sector".

It seems clear that the correspondence was intended to obscure the fact that a

member of the Gupta family (by marriage) had an interest in this transaction.

Both Nedbank and the Reserve Bank must have remained suspicious, because in

correspondence seen by amaBhungane they raised a series of concerns, including

whether Sahara had obtained permission to export the aircraft and whether they

were not being sold at below market value.

Selling at below market value to a related company abroad may amount to an

attempt to bypass exchange control regulations and externalise assets

irregularly.

Nath attempted to bat the concerns away. What he did not disclose -- at least

at that point -- was that Gupta son-in-law Garg was the 100% beneficial owner

of AGEV. Of course, anyone who then Googled the name would have established

Garg's relationship with the Gupta family.

Nor was it disclosed that Garg's company, AGEV, made a loan to Ess Emm

International, which Ess Emm was to use to purchase the aircraft.

Documents seen by amaBhungane show that the loan agreement was signed on 5

December 2017.

It is understood by amaBhungane that the true reason AGEV attempted to make

the $1.7-million payment directly to Sahara in March instead of via Ess Emm

was that AGEV was informed a few days earlier that Ess Emm was unable to make

the payment (in terms of the loan agreement) because its bank account with

Dubai's RAK Bank had been summarily closed.

None of the numbers listed for Ess Emm in Dubai currently operates. The email

address listed in its contract to purchase the aircraft bounced.

As a result of unresolved concerns the funds transferred by AGEV were held by

Nedbank and not released to Baroda for the benefit of Sahara.

By May 2018 the funds had still not been credited, despite threats and

entreaties from Nath to Baroda to either transfer the money or pay it back to

AGEV.

It was only on 28 June -- in response to specific questions from the Reserve

Bank -- that Nath disclosed that Garg was the 100% shareholder of AGEV.

Even then, Nath did not disclose that AGEV had granted a loan to Ess Emm, part

of which was specifically intended to fund the aircraft purchase.

"Funds relating to US$1.7-million are currently held in a South African

Reserve Bank (SARB) account with Nedbank," Nedbank told amaBhungane.

"We are not at liberty to comment on whether SARB is of the view that there

has been a contravention in relation to the payment."

Exchange control regulations provide for the payment of a fine of 250,000 rand or

a maximum five-year prison term for contraventions which include neglecting to

furnish any required information or providing false declarations.

The regulations also set out the grounds on which the Reserve Bank may attach

money if there is an actual or a suspected contravention of exchange control

regulations.

Garg, Oakbay and Baroda did not respond to requests for comment.

The aircraft transaction adds to suspicions that Garg effectively made himself

available to launder money for the Gupta family via earlier transactions

involving the Dubai-based Centaur group.

The #GuptaLeaks showed that in July 2014 Garg formed a Bermuda-registered

joint venture named Centaur Ventures, in which he and Centaur Holdings held

50% each.

In January 2016, Centaur Ventures extended a 1.5-billion rand loan facility to

Centaur Mining South Africa, where once again Garg was involved.

Much of that "credit deal" appears to have been funnelled into providing the

means for the Guptas' controversial purchase of Optimum Coal.

In short, 885-million rand was deposited by the local Centaur Mining with Bank of

Baroda, which used that as security to lend the same amount to Gupta company

Tegeta Exploration and Resources.

Tegeta then put this towards the purchase price of Optimum Coal in April 2016.

There was also an attempt to use Centaur Ventures to buy out the audit firm

Nkonki Incorporated in late October 2016. Gupta lieutenant Salim Essa

subsequently -- and secretly -- provided the funds.

Centaur did not respond to requests for comment. DM

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