The Nedbank Group has agreed to pay Transnet R600 million in a confidential commercial settlement, bringing an end to a year-long legal battle over interest rate swap transactions linked to state capture.
The agreement, announced on Tuesday in a joint statement, concludes the dispute without any admission of liability. Both institutions said the decision was driven by a shared desire to avoid protracted litigation and to safeguard their long standing business relationship.
According to the statement, the payment settles the matter in full and final terms. Both Nedbank and Transnet reiterated that they stand by previous public positions on the litigation, while describing the resolution as being in the national interest and necessary for continued collaboration on infrastructure investment and economic growth.
The legal dispute centred on interest rate swaps concluded in 2015 and 2016 during Transnet’s multibillion rand locomotives procurement programme, which featured prominently in the state capture inquiry.
Nedbank had been preparing for an extended court battle after Transnet and the Special Investigating Unit sought to recover R2.7 billion they alleged flowed from the transactions.
Transnet and the SIU argued that the swaps formed part of a broader scheme that diverted public funds to entities linked to the Gupta family.
The deals were facilitated under the guidance of Regiments Capital, a consultancy connected to the Guptas and accused of exerting political influence to bypass procurement processes.
While the judicial inquiry flagged the transactions as potentially corrupt, Nedbank repeatedly maintained that it was unaware of any improper conduct by Regiments or Transnet officials.
Interest rate swaps are financial instruments used by major companies and financial institutions to manage exposure to changes in interest rates, with parties exchanging payment obligations rather than the underlying principal amount.
Evidence presented during the state capture inquiry also highlighted how internal controls at Transnet were overridden through irregular procurement practices.
This included testimony in 2019 from governance executive Peter Volmink, who detailed how deviations from open bidding contributed to the entity’s capture.
The transactions under scrutiny occurred during the leadership of former Nedbank chief executive Mike Brown, who headed the bank from 2010 until his retirement in May 2024. Brown earned nearly R515 million during his tenure and has since been succeeded by former Absa finance director Jason Quinn.
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