Pamensky can run but can’t hide
• New evidence ties former Oakbay director Mark Pamensky to scheme to earn lavish fees from Eskom and Transnet properties
New evidence implicates former Oakbay director Mark Pamensky in a scheme to rake in massive fees for Guptalinked companies by selling off Eskom and Transnet properties worth R14bn while he served on the Eskom board.
New evidence implicates former Oakbay director Mark Pamensky in a scheme to rake in massive fees for Gupta-linked companies by selling off Eskom and Transnet properties worth R14bn while he served on the Eskom board.
A raft of confidential documents and legal opinions obtained by Business Day and TimesLive — and corroborated by sources — suggest Pamensky concocted the scheme while privy to inside information as chairman of Eskom’s investment and finance committee.
A legal opinion that accused Pamensky of being “intellectually dishonest” in his conflict of interest declaration and recommended his removal was sent to the Eskom board in April 2016.
This opinion was later watered down substantially, allegedly under pressure from the board, which allowed Pamensky to remain a board member until he resigned in November 2016.
In his declaration, Pamensky said that he had resigned from Blue Label in November 2015 to set up the consultancy MarkPam, which was engaged by Michail Shapiro’s Fuel Property Group (FPG) to advise Trillian on work for Transnet.
This work included a proposal to sell off properties to enhance Transnet’s balance sheet. The intention was to offer the same service to other parastatals, including Eskom.
At the time, Trillian was majority-owned by Gupta associate Salim Essa.
In return for his advisory services, Pamensky agreed to take up an equity stake in FPG.
The Transnet property proposal — first made by Regiments and then Trillian — was to create a ring-fenced fund to dispose of noncore estate assets.
These would be sold to the fund at market value and developed, with returns flowing back to the parastatals.
Trillian and FPG stood to earn large fees from the sale and development of the properties.
In a confidential proposal obtained by Business Day and TimesLive, Trillian explained its “fee mandates” were structured to take on some financial risk in the start-up phase. In return, it would “participate with our clients in the value realised”.
FPG would charge a 2% “fund management fee” and take a 20% cut “of the uplift created”. This could potentially translate into fees worth billions once the properties were developed.
Transnet’s noncore real estate portfolio is valued at R4bn and Eskom’s at R10bn.
Quite how Trillian would share in start-up risk is unclear. Trillian’s proposal makes provision for charging Transnet R40m even if the transport parastatal did not use it.
An investigation last year by advocate Geoff Budlender found that Trillian was paid R41m for the proposal.
In his declaration, Pamensky claimed he was not aware when his company began consulting to FPG. A legal opinion commissioned by Eskom found that Pamensky’s declaration was “intellectually dishonest” by failing to disclose material facts.
These included the beneficial shareholding of companies suspected to be linked to the Guptas that would profit from property deals with the parastatals.
“Mr Pamensky’s declaration cannot be said … to be wholly based on the principles of intellectual honesty” by falsely giving the impression of an “arm’slength relationship” between his company, FPG and Trillian and that he was not aware of their business plans, the opinion said. He also failed to declare that his business partners would be Shapiro, Essa and Trillian CEO Eric Wood.
Business Day and TimesLive have seen e-mails containing information about the property portfolio proposal being circulated between Pamensky, Wood, Shapiro and Essa.
A source close to the investigation, who spoke on condition of anonymity, also found it was a sham to suggest, as Pamensky had done, that his consultancy was engaging FPG to help Trillian’s advisory division on its work for Transnet.
The legal opinion pointed out Pamensky’s consultancy was registered around the same time as FPG, both shared the same postal address, and Trillian Financial Advisory only came into being days later. This company is wholly owned by Trillian Capital Partners.
FPG, MarkPam and Trillian Advisory “were created for the purpose of benefiting from this concocted scheme. Behind this whole scheme was Mark Pamensky,” the source said.
Pamensky was asked to explain these anomalies but failed to do so.
The legal opinion said Pamensky would take up a 10%30% stake in FPG, with its then sole director, Shapiro, taking up a 10% stake. Neither Pamensky nor Shapiro responded to requests to disclose the owner of the remaining 60% stake, fuelling suspicions that it would belong to a Gupta associate.
Contacted for comment, Trillian said it was constrained from answering questions because it had not been given a copy of the “alleged opinion” save to say it was “manifestly incorrect in so far as it refers to Trillian”.
The company claimed that it had never made any property proposal to Eskom or Transnet and that Pamensky had never conducted work for Trillian related to Eskom and Transnet properties. This is contradicted by documentary evidence, including a Trillian property proposal to Transnet that included a profile of Pamensky.
When contacted, Shapiro skirted the issue of Pamensky’s conflict in being allocated shares in Trillian Capital Partners and failed to clarify FPG’s suspected Gupta-linked shareholding.
He said he was contracted to provide “property structuring advice, for which I am paid a fee. I have never contracted with any government agency or department in these endeavours.”
A Financial Mail investigation established that FPG was to own a stake in Trillian through an entity called Aeriom Nominees, and that Trillian had intended ceding some of the Aeriom shares to Stanley Shane, who at the time headed the Transnet board’s powerful acquisitions and disposals committee.
This never transpired, presumably because both Shane and Pamensky’s conflicts as directors of Eskom and Transnet would have been too blatant.
Shane said last week that he had played no role in the FPG proposal to Transnet, “which wasn’t raised let alone approved by the board” and that he had never owned shares in or been employed by Trillian.
Trillian whistle-blower Bianca Goodson told Parliament Shane attended Trillian meetings to discuss Transnet work.
The Eskom legal opinion, dated April 8 2016, concluded Pamensky’s presence on the Eskom board was “untenable”. It pointed out that, as chairman of the investment and finance committee, Pamensky had oversight over Eskom’s plans to sell noncore properties. It cites an e-mail he wrote to an Eskom employee to forward him documents related to “the disposal of residential properties”.
In a version dated May 26, there is no mention of Pamensky’s planned shareholding in FPG and Trillian, of his “intellectual dishonesty” or removal. Pamensky did not respond to requests for comment.
Transnet said it was evaluating plans “for the optimisation of its noncore property portfolio” and had “satisfied itself” that there was no conflict of interest “involving Mr Shane and entities that were doing business with Transnet”. Eskom did not respond to detailed questions.