Transnet, McKinsey finalise settlement fees of R870 million to be returned

Transnet and McKinsey have announced they have finalised the settlement on the fees McKinsey committed to return to Transnet at the Judicial Commission of Inquiry into State Capture in December 2020.

The full and final settlement of R870 million includes the fees paid to McKinsey in respect of the projects undertaken with Regiments Capital, plus interest.

In a brief joint statement, the two companies say they have reached a settlement on the amount of money that McKinsey should repay to Transnet. McKinsey worked closely with the Gupta-connected Regiments to advise the freight rail operator on a number of big contracts. And subsequently, the State-owned entity suffered huge losses under the advice of the two companies.

Last year, McKinsey agreed to return R650 million to Transnet. However, the final settlement came at R870 million – an amount that is higher with interest.

At the commission last year, McKinsey announced that it has undertaken to repay all of the fees paid to it for work it performed on the Transnet and SAA contracts alongside Regiments Capital.

McKinsey says it assisted the Commission with its investigations on a transparent basis.

The Commission showed McKinsey certain evidence relevant to its contracts alongside Regiments at Transnet and SAA. The evidence suggested there were transgressions and some irregularities in the contracts of McKinsey alongside Regiments at Transnet and SAA. Although this did not implicate any current employees or partners.

In the video below, Former Hatch Engineering MD for Rail, Hank Bester, testifies that they were intimidated by Transnet’s procurement officer:

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Source: SABC News (