Transnet wants R1.2bn back from McKinsey

State-owned ports and rail giant Transnet said on Wednesday night that no final settlement has been reached with McKinsey & Co and that the US-based management consultancy in fact owes it more than R1.2 billion.

The money relates to McKinsey’s entanglement in state capture in South Africa, through Transnet contracts secured by Gupta-linked Regiments Capital. Both McKinsey and Regiments Capital are among the private sector companies facing the Zondo Commission of Inquiry into Allegations of State Capture.

“Up until last night, discussions were still underway between Transnet and McKinsey, with the main point of dispute being the repayment of the substantial interest earned on McKinsey’s fees,” Transnet said in a statement, in which it also noted remarks around the matter made in a statement issued by the secretary of the Zondo Commission.

The R1.2bn vs R650m for Transnet and SAA

The commission announced on Wednesday that McKinsey is set to pay some R650 million back to Transnet and South African Airways in relation to fees for work it did for the two state-owned companies together with Regiments Capital.

Read: McKinsey to repay R650m, testify in SA graft probe

McKinsey has already paid back more than R1 billion related to work done for Eskom, which involved another Gupta-linked company, Trillian.

Read: Derby punts Transnet dividend payouts and zero-based budgeting

“The amount owed to Transnet, therefore, is just over R1.2 billion, and that is what we continue to insist must be repaid in full,” it added.

“In July 2018 McKinsey agreed to return the fees earned at Eskom plus interest, in similar circumstances,” Transnet noted.

A McKinsey official is set to testify at the Zondo Commission on Thursday.

Bloomberg reported that that the firm’s chief risk officer, Jean-Christophe Mieszala, will be testifying.