Tril­lian plans to sell 60% stake

Push to dis­card Gupta links

The Star Early Edition - - BUSINESS REPORT - Ka­belo Khu­malo

SCAN­DAL-RID­DEN Tril­lian Cap­i­tal yes­ter­day moved to rid it­self of its Gupta links when it an­nounced that it had reached an agree­ment with its pri­mary share­holder, Tril­lian Hold­ings, to sell its share to the com­pany.

Tril­lian Hold­ings, which is con­trolled by Gupta fam­ily bene­fac­tor Salim Essa, will dis­pose of its 60 per­cent stake in Tril­lian Cap­i­tal to Eric Wood, the com­pany’s chief ex­ec­u­tive.

The com­pany said in a state­ment that un­re­lent­ing me­dia al­le­ga­tions aris­ing from Essa’s hold­ing in the com­pany have had a neg­a­tive im­pact on the abil­ity of the group and its staff to reach their full po­ten­tial.

“Tril­lian has al­ways main­tained its in­no­cence in the face of al­le­ga­tions and re­it­er­ates the be­lief that it has a team of ex­cel­lent staff who are able to de­liver on their man­dates to the high­est stan­dards and hope they will be given a fair op­por­tu­nity to do so in the fu­ture,” the com­pany said.

Last week, Eskom ad­mit­ted that it paid the Tril­lian group of com­pa­nies R495 mil­lion in con­sult­ing fees as part of its R1 bil­lion deal with global con­sult­ing firm McKin­sey.

The pay­ment was made de­spite Tril­lian not hav­ing di­rectly car­ried out any work for the util­ity.

The power util­ity has since launched a probe into why it paid Tril­lian de­spite not hav­ing a con­tract with it.

Tril­lian said it was un­for­tu­nate that Essa had taken the de­ci­sion to di­vest from the busi­ness as he was on course in cre­at­ing a lead­ing black ad­vi­sory busi­ness.

“The trans­ac­tion is part of the com­pany’s strat­egy to re­shape the busi­ness and con­tinue to de­liver world-class fi­nan­cial ad­vi­sory and con­sul­tancy ser­vices.”

Un­der the terms of the deal, Wood will up his stake in the com­pany to 85 per­cent, while the rest of the shares will be owned by the group’s man­age­ment and staff.

The com­pany did not men­tion how much the trans­ac­tion was worth.

Essa’s de­par­ture is the sec­ond ma­jor de­par­ture this year from the cor­rup­tion-tainted com­pany.

ANC heavy­weight Tokyo Sexwale last month an­nounced he was step­ping down as the chair­per­son of the com­pany, af­ter he re­leased an ex­ter­nal in­ves­ti­ga­tion he had com­mis­sioned into an al­le­ga­tion that the com­pany had been in­volved in un­der­handed state cap­ture busi­ness deal­ings.

Tril­lian Cap­i­tal was ini­tially flung into the state cap­ture spot­light af­ter an af­fi­davit by a whis­tle-blower al­leged that Wood had briefed his team about Nh­lanhla Nene’s fir­ing two months be­fore it oc­curred.

Essa has been un­der in­tense scru­tiny af­ter his links to the Gupta fam­ily were es­tab­lished through nu­mer­ous com­pa­nies and trans­ac­tions.

El­ga­solve, which is wholly owned by Essa, at one point held a 75 per­cent stake in VR Laser Ser­vices, a steel fab­ri­ca­tion com­pany in which Gupta fam­ily in­vest­ment ve­hi­cles have a 25 per­cent share­hold­ing.

And El­ga­solve owns about 22 per­cent of Tegeta Ex­plo­ration and Re­sources, a Gup­ta­con­trolled com­pany that con­tro­ver­sially bought Op­ti­mum Coal from Glen­core a few years ago.

New struc­ture

The move by Wood to buy out Essa was not com­pletely a sur­prise as Wood had in­di­cated re­cently that plans were afoot to have a new struc­ture to move away from Gupta links.

How­ever, ques­tions re­mained as to how the di­vest­ment of Essa in the com­pany will help its bat­tered rep­u­ta­tion as Essa him­self has been em­broiled in the state cap­ture al­le­ga­tions and of fleec­ing state-owned en­ter­prises.

A for­mer busi­ness as­so­ciate of Woods at Reg­i­ments Cap­i­tal has al­leged in an af­fi­davit that Woods had laun­dered more than R10m to spon­sor the Gupta-backed South African of The Year Awards two years ago.

Reg­i­ments di­rec­tors’ Litha Ny­ho­nyha and Niven Pil­lay have laid crim­i­nal charges re­lat­ing to al­leged money laun­der­ing in­volv­ing R17m in pay­ments made to the Gup­taowned news­pa­per, The New Age (TNA), as spon­sor­ship of the awards.

They claim the money was paid us­ing fic­ti­tious in­voices by Wood un­der the pre­text that Reg­i­ments was plac­ing ad­verts with TNA.


Tril­lian Hold­ings is to sell its 60 per­cent stake in Tril­lian Cap­i­tal to the lat­ter’s chief ex­ec­u­tive, Eric Wood.

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