C O M M I S S I O N O F I N Q U IR Y I N TO S TAT E C A P T U R E H E L D AT PA R K TO W N , J O H A N N E S B U R G 10 30 AUGUST 2019 D AY 1 5 3 20 30 AUGUST 2019 – DAY 153 PROCEEDINGS ON 30 AUGUST 2019 C H A I R P E R S O N : G o o d m o r n i n g M s H o f m e y r, g o o d m o r n i n g e v e r y b o d y. A D V K AT E H O F M E Y R : G o o d m o r n i n g C h a ir. CHAIRPERSON: Are you ready? A D V K AT E H O F M E Y R : W e a r e i n d e e d . CHAIRPERSON: Good. Let us proceed. A D V K AT E H O F M E Y R : C h a ir t h e r e a r e a f e w h o u s e k e e p i n g m a t te r s ju s t to a d d r e s s a n d a ls o a n u p d a te to c o n c lu d e in e s s e n c e th e e v i d e n c e o f y e s te r d a y b e f o r e w e m o v e t o t h e e v id e n c e o f t o d a y. I f I m a y j u s t b e 10 p e r m it t e d t o a d d r e s s y o u o n t h a t u p d a te ? C H A I R P E R S O N : Ye s . A D V K AT E H O F M E Y R : C h a ir y o u w il l r e c a l l a t th e c o m m e n c e m e n t w h ic h w a s m a n y w e e k s a g o o f t h e a v i a t io n s e c ti o n o f e v i d e n c e . W h e n I in tr o d u c e d th e to p ic o f th e N o r t h W e s t g r o u n d h a n d li n g tr a n s a c ti o n w h ic h M r N a t a s e n ’s e v id e n c e y e s t e r d a y c o m p l e t e d a t l e a s t in t h is e v i d e n c e s e s s io n . I i n d ic a te d th a t o n e o f th e c o n c e r n s o f t h e c o m m i s s io n had as it been i n v e s ti g a ti n g the matter was i ts u n d e r s t a n d in g t h a t t h e r e h a d b e e n a s e r i e s o f c r i m i n a l c o m p l a i n ts l a i d in r e l a ti o n t o t h e m a t t e r s t h a t w e r e in v e s t i g a t e d a n d p r e s e n t e d 20 b e g in n i n g a s e a r ly a s 2 0 1 6 . A n d t h e c o n c e r n w a s w h y th e r e h a d n o t b e e n m o v e m e n t i n r e la t io n t o t h o s e c a s e s . C H A I R P E R S O N : Ye s , y e s . A D V K AT E H O F M E Y R : W e i n d ic a t e d th e n C h a ir t h a t w e h a d t a k e n s t e p s to e n g a g e w i t h th e r e l e v a n t a u t h o r i t i e s a b o u t t h a t . W e h a v e – w e r e c e i v e d a n in i ti a l r e p o r t t o w h ic h I m a d e r e fe r e n c e a t t h e o u t s e t . Page 2 of 153 30 AUGUST 2019 – DAY 153 C H A I R P E R S O N : Ye s . A D V K AT E H O F M E Y R : O f t h e e v i d e n c e . T h a t i s a r e p o r t t h e r e is n o n e e d t o g o t h e r e n o w b u t ju s t t o r e f r e s h o u r m e m o r i e s i t w a s a r e p o r t fr o m t h e le t m e ju s t h a v e i t h e r e – t h e L i e u t e n a n t G e n e r a l N a ti o n a l H e a d f o r t h e D ir e c t o r a te fo r Pr i o r i ty C r i m e I n v e s t ig a ti o n c o ll o q u ia ll y known as the Hawks because the commission had engaged with the H a w k s t o s a y w e a r e a w a r e o f t h e s e c o m p l a i n ts t h e f ir s t o f w h ic h l a i d i n 2 0 1 6 , t h e s e c o n d o f w h ic h l a i d i n 2 0 1 7 , t h e t h ir d o f w h i c h la id i n 2 0 1 8 a n d w e h a v e s e e n n o m o v e m e n t in r e la t io n t o t h o s e c a s e s . T h e y g a v e 10 us a r e p o r t o f w h a t s te p s had been taken in r e la t io n to the e n g a g e m e n ts a n d it c o n c l u d e d o n t h e b a s i s t h a t t h e i n v e s ti g a ti o n n e e d s s p e e d y c o n c l u s i o n . T h o s e w e r e th e n o t e s o f t h e r e p o r t fr o m L ie u t e n a n t General Lebeya. C H A I R P E R S O N : W h a t w a s i t – w h a t d i d t h e c o n c l u s io n s a y ? A D V K AT E H O F M E Y R : T h a t th e r e s h o u l d – t h e i n v e s t ig a ti o n n e e d s s p e e d y c o n c lu s i o n . R i g h t. C H A I R P E R S O N : O k a y. A D V K AT E H O F M E Y R : S o C h a ir w e – w e i n te r r o g a te d th e r e p o r t . C H A I R P E R S O N : Ye s . 20 A D V K AT E H O F M E Y R : B e c a u s e w e w a n te d t o u n d e r s ta n d p r e c is e l y w h a t h a s h a p p e n e d s in c e 2 0 1 6 to 2 0 1 9 . CHAIRPERSON: Ye s . Ye s a n d w h y t h e r e h a d n o t b e e n a s p e e d y conclusion all along. A D V K AT E H O F M E Y R : U n ti l t h a t p o i n t i n d e e d . C H A I R P E R S O N : Ye s . Page 3 of 153 30 AUGUST 2019 – DAY 153 A D V K AT E H O F M E Y R : C h a ir t h a t p r e c i p i t a te d c o r r e s p o n d e n c e , fu r t h e r c o r r e s p o n d e n c e a n d s e e k i n g ’s ’ o f c l a r i t y. T h e r e p o r t it s e l f i n d ic a t e d c e r t a i n b a n k s ta t e m e n ts h a d t a k e n v e r y l o n g t o b e p r o d u c e d , h a d t a k e n – h a d b e e n r e q u e s t e d a g a in . c o n s o l id a t e th e c a s e s . Th a t t h e r e h a d b e e n a n a t te m p t to C h a ir t h e u p s h o t t h a t I r e p o r t t o y o u to d a y is t h a t n o n e o f t h e c la r i ty t h a t w e h a v e b e e n – w e ll a t te m p t e d to b e g iv e n h a s a c tu a lly a d v a n c e d t h e m a t t e r. I t r a is e s m o r e q u e s t io n s i n fa c t th a n it a n s w e r s . A n d I r a i s e th a t w i th y o u t o d a y C h a ir b e c a u s e i t is o u r p r o p o s a l t h a t w e c o n t in u e t o e n g a g e t o tr y to u n d e r s t a n d w h y t h r e e a n d 10 a h a l f – w e ll i t i s t h r e e y e a r s s i n c e th e fi r s t c o m p l a in t . C H A I R P E R S O N : Ye s . A D V K AT E H O F M E Y R : T h e s e m a t t e r s h a v e n o t p r o g r e s s e d . C H A I R P E R S O N : Ye s . A D V K AT E H O F M E Y R : A n d C h a ir i t i s w it h a v i e w i n d u e c o u r s e . CHAIRPERSON: Hm. A D V K AT E H O F M E Y R : O n c e w e g e t t o t h e b o t t o m o f t h i s . CHAIRPERSON: Hm. A D V K AT E H O F M E Y R : To m a k e r e c o m m e n d a ti o n s in o u r s u b m i s s i o n s to you. 20 CHAIRPERSON: Hm. A D V K AT E H O F M E Y R : A b o u t w h a t y o u m a y c o n s id e r i n a r e p o r t i n d u e course. CHAIRPERSON: Hm. A D V K AT E H O F M E Y R : C h a ir o u r th i n k in g t h e r e is i f t h i s c a n b e e x p l a i n e d b y m a t t e r s o f i n c a p a c i ty. Page 4 of 153 30 AUGUST 2019 – DAY 153 CHAIRPERSON: Hm. A D V K AT E H O F M E Y R : W e ll th a t is o n e t h in g a n d i t m a y w e ll i n fl u e n c e t h e t y p e o f s u b m is s io n s w e w o u l d m a k e to y o u i n r e l a ti o n t o r e c o m m e n d a ti o n s f o ll o w i n g fr o m t h e c o m m i s s i o n . CHAIRPERSON: Hm. A D V K AT E H O F M E Y R : T h e r e is a l s o c o n c e r n t h o u g h t h a t t h e r e m a y h a v e b e e n d e la y s i n th is p r o s e c u ti o n o f t h e m a t te r f o r o th e r r e a s o n s . C H A I R P E R S O N : Ye s . A D V K AT E H O F M E Y R : 10 And we have – we are in the process of e n g a g i n g t h o s e m a t t e r s w i t h th e H a w k s . C H A I R P E R S O N : Ye s . A D V K AT E H O F M E Y R : S o I – m y r e q u e s t t o y o u t o d a y is t h a t w e c o n ti n u e to p r o b e th e m a t te r. Th a t w e u p d a te y o u a s a n d w h e n w e b e li e v e w e h a v e a f u ll p ic t u r e . I w o u l d n o t b e i n a p o s it i o n t o d a y t o g iv e y o u a f u ll p i c tu r e b e c a u s e th e r e is m u c h th a t s t il l n e e d s t o b e in t e r r o g a t e d b u t w e w o u l d d o s o in a d v a n c e o f m a k i n g a n y s u b mi s s io n s t o y o u C h a ir a b o u t w h a t o u r p r o p o s e d r e c o m m e n d a ti o n s m a y b e i n r e l a ti o n t o t h e s e m a t t e r s . CHAIRPERSON: 20 I a m d i s i n c l i n e d t o d e a l w i t h i t s i m p ly o n th e b a s i s t h a t w h a t e v e r w e m a y n e e d t o d o m a y o n ly b e d o n e a t t h e ti m e o f p r e p a r in g th e r e p o r t . A D V K AT E H O F M E Y R : I n d e e d C h a ir. C H A I R P E R S O N : C e r t a i n l y i t w o u l d b e i m p o r t a n t a t th a t s t a g e t o k n o w a s m u c h a s p o s s i b l e a b o u t t h e s e t y p e s o f d e l a y s , w h a t c a u s e s th e m a n d s o o n . B u t I t h i n k t h a t w e s h o u l d s e e k to a s s is t i f w e c a n i n Page 5 of 153 30 AUGUST 2019 – DAY 153 1 . U n d e r s t a n d in g w h y e i th e r n o t h i n g o r v e r y l i t tl e h a s h a p p e n e d a n d 2 . S e e k in g t o h a v e t h e a c ti o n t h a t i s r e q u i r e d t o b e ta k e n t o b e taken. A D V K AT E H O F M E Y R : I n d e e d . C H A I R P E R S O N : W h a t w e m a y h a v e to c o n s i d e r – I t h i n k t h e fir s t th i n g is to tr y a n d g e t a s m u c h in f o r m a t io n a s p o s s i b le a s t o w h e r e – w h a t h a s b e e n d o n e a n d t h e n o n e o p ti o n m i g h t b e t o th e n b r i n g t h i s to t h e a tt e n ti o n o f t h e – th e l e a d e r s h i p o f w h a te v e r a n d l a w e n f o r c e m e n t a g e n c ie s a r e i n v o l v e d w h e t h e r i t i s t h e H a w k s o r th e S A P S a n d m a y b e 10 a s k t h e m t o s e e t o it t h a t s o m e th in g i s b e i n g d o n e a n d m a y b e t o c o n s i d e r h o ld i n g c e r t a i n p e o p l e a c c o u n t a b l e . A D V K AT E H O F M E Y R : H m . CHAIRPERSON: B u t i t m a y w e l l b e t h a t w e s h o u ld c o n s i d e r w h e th e r s e n i o r p e o p l e s h o u ld n o t c o m e h e r e a n d e x p l a i n w h a t h a s h a p p e n e d . A D V K AT E H O F M E Y R : H m . C H A I R P E R S O N : B u t w e d o n o t n e e d t o – if w e c a n a v o i d l e t th e ti m e t h a t w e h a v e w h ic h is l i m it e d f o r t h e h e a r i n g o f w i t n e s s e s w h o w o u l d b e t e ll i n g u s a b o u t v a r i o u s m a t te r s l e t s o m e o f i t b e t a k e n b y … A D V K AT E H O F M E Y R : I n d e e d . 20 CHAIRPERSON: T h o s e m a t te r s b u t a t t h e s a m e t i m e i t m a y w e ll b e t h a t i t m i g h t s e n d th e r ig h t m e s s a g e if p e o p l e w e r e t o b e c a l le d a n d to c o m e a n d e x p l a i n p u b l ic l y w h a t is h a p p e n in g . B e c a u s e i f i t is a q u e s t io n o f in c a p a c it y, n o t h a v i n g r e s o u r c e s o n e w o u l d e x p e c t t h e m t o c o m e – t o b e o p e n w it h u s a n d s a y l o o k t h e r e a s o n w h y t h e r e h a s b e e n n o a c ti o n i s b e c a u s e w e j u s t h a v e t o o fe w p o l ic e o ffic e r s o r s o m e t h i n g Page 6 of 153 30 AUGUST 2019 – DAY 153 lik e th a t . A D V K AT E H O F M E Y R : I n d e e d . CHAIRPERSON: A n d t h e n g iv e a fu ll b r e a k d o w n o f w h a t is t h e r e – w h a t is a v a i la b l e a n d s o o n . B u t a ls o o n e w o u ld w a n t i n th a t s i tu a ti o n t o u n d e r s ta n d w h a t e ff o r ts h a v e b e e n m a d e t o b r i n g th a t s i t u a t i o n t o th e a tt e n ti o n o f s e n i o r a u t h o r i ti e s y o u k n o w. A D V K AT E H O F M E Y R : I n d e e d . C H A I R P E R S O N : To s a y l o o k w e c a n n o t c a r r y o u t o u r f u n c ti o n s i n th is a r e a , in t h is c o m m u n i ty b e c a u s e w e d o n o t h a v e e n o u g h r e s o u r c e s a n d 10 t h is is th e s it u a ti o n o r w h e t h e r p e o p l e j u s t h a v e n o t d o n e a n y th in g . A D V K AT E H O F M E Y R : I n d e e d . CHAIRPERSON: S o m a y b e y o u c o u l d t h i n k a lo n g t h o s e l in e s a n d o b v i o u s l y w h a te v e r w e d o w e h a v e g o t t o l o o k a t w h a t p o w e r w e h a v e . A D V K AT E H O F M E Y R : I n d e e d . CHAIRPERSON: Because we do not want to be accused of doing a n y th in g t h a t d o e s n o t f a l l w i th in o u r p o w e r s . A D V K AT E H O F M E Y R : I n d e e d . CHAIRPERSON: Ja. A D V K AT E H O F M E Y R : T h a n k y o u C h a ir t h a t w a s j u s t to c o n c l u d e t h a t 20 a s p e c t o f t h e N o r th W e s t g r o u n d h a n d li n g t r a n s a c t io n f o r p r e s e n t purposes. If I may then move to today and one or two procedural a s p e c ts . C h a ir t h e r e h a s b e e n a r e q u e s t – M r M a in g a n y a w h o is g o i n g t o b e s w o r n in s h o r tl y is th e C h i e f R i s k O ff ic e r o f t h e I n d u s tr i a l Development Corporation. S o m e o f t h e d o c u m e n ts t h a t t h e I D C h a s p r o v i d e d t o t h e c o m m is s i o n i n t h e ir e n d e a v o u r s t o a s s is t w i t h t h e Page 7 of 153 30 AUGUST 2019 – DAY 153 in v e s t i g a t io n a r e c o m m e r c i a l ly s e n s i tiv e . T h e r e a r e tw o p a g e s o f a p a r t ic u l a r a n n e x u r e th a t a r e c o m m e r c i a ll y s e n s i t iv e a n d w h ic h t h e r e h a s b e e n a r e q u e s t t h a t w e e n s u r e a r e r e d a c t e d fr o m t h e p u b l ic r e c o r d w h e n t h e b u n d l e s o f t o d a y g o o n t o t h e w e b s i t e . C h a ir t h e le g a l t e a m h a s c o n s id e r e d t h e t w o d o c u m e n ts o r th e t w o p a g e s o f a d o c u m e n t t h a t a p p e a r s i n t h r e e p l a c e s i n th e b u n d l e s a f t e r r e c e iv in g t h e l e tt e r a n d w e h a v e n o d i ff ic u l t y w i t h th e s u g g e s t i o n t h a t th e y b e r e d a c te d . As a m a t t e r o f f a c t I d o n o t e v e n i n t e n d t o t a k e M r M a in g a n y a t o th o s e d o c u m e n ts t o d a y. A n d s o w i th y o u r l e a v e o u r p r o p o s a l w o u ld b e t h a t 10 that arrangement be made. I t i s s e t o u t i n a l e t t e r w h ic h t h o s e d o c u m e n ts w ill b e a n d C h a ir I c a n j u s t h a n d t h a t u p to y o u i f I m a y. C H A I R P E R S O N : Ye s . A D V K AT E H O F M E Y R : C h a i r y o u w il l s e e th a t i t is a le t t e r a d d r e s s e d b y C li ff D e c k e r H o f m e y r w h o a r e th e a t t o r n e y s a c t in g f o r Mr M a i n g a n y a t o d a y a n d t h e r e l e v a n t d o c u m e n t s i n r e s p e c t o f w h i c h r e d a c t io n is s o u g h t a r e s e t o u t fr o m p a r a g r a p h 4 . 1 o n t h a t p a g e o v e r t o 4 . 3 . C h a ir m y s u g g e s t i o n i s th is m o r n i n g I w a s a b l e t o i d e n ti fy th o s e d o c u m e n ts w i t h t h e l e g a l r e p r e s e n t a t iv e s a s th e y a p p e a r o n t h e p a g in a t e d p a g e s i n t h e b u n d l e s . A n d s o my p r o p o s a l i s t h a t i f y o u a r e i n c li n e d to g iv e t h e 20 r u l i n g y o u d o s o w i t h r e f e r e n c e to t h e d o c u m e n t s r e f e r r e d t o in t h e le t t e r a n d t h e n w e w i ll s i m p ly e n s u r e t h a t t h e c o r r e c t p a g i n a te d p a g e s of the record are redacted. CHAIRPERSON: W e l l I w o u l d li k e to h a v e s i g h t o f t h e a c tu a l document. A D V K AT E H O F M E Y R : C e r t a i n l y. Page 8 of 153 30 AUGUST 2019 – DAY 153 C H A I R P E R S O N : A s w e ll . A D V K AT E H O F M E Y R : C h a ir le t m e t a k e y o u t o t h a t t h e n . C H A I R P E R S O N : Ye s b u t in t h e m e a n ti m e I w il l j u s t r e a d th is le t t e r. A D V K AT E H O F M E Y R : C e r t a i n l y. C H A I R P E R S O N : O k a y n o m a y b e e v e n w i t h o u t l o o k i n g a t it I h a v e j u s t fi n i s h e d r e a d i n g th is l e t t e r. M a y b e w h a t w e c a n d o is – m a y b e I c a n m a k e t h e o r d e r w it h a r i d e r. A D V K AT E H O F M E Y R : H m . C H A I R P E R S O N : T h a t I – th e o r d e r c o u ld b e r e v is i te d s h o u l d i t b e c o m e 10 n e c e s s a r y. A D V K AT E H O F M E Y R : H m . C H A I R P E R S O N : L a te r o n j u s t i n c a s e A D V K AT E H O F M E Y R : I n d e e d . C H A I R P E R S O N : L a te r o n i t m ig h t a p p e a r t h a t th e r e i s s o m e th in g . A D V K AT E H O F M E Y R : I n d e e d . C H A I R P E R S O N : P a r t ic u l a r ly w h e n I h a v e n o t lo o k e d a t a l o t o f t h in g s . A D V K AT E H O F M E Y R : I n d e e d . C H A I R P E R S O N : J a . S o i n t h a t w a y th e n o n e c a n a l w a y s r e lo o k a t i t a n d e i t h e r w it h d r a w t h e o r d e r o r k e e p i t a s i t i s . 20 A D V K AT E H O F M E Y R : I n d e e d C h a ir. C H A I R P E R S O N : J a . S o is t h is i d e n ti f ic a ti o n o f t h e r e l e v a n t d o c u m e n t s fi n e ? A D V K AT E H O F M E Y R : Ye s i t is . CHAIRPERSON: Hm. O k a y. Th e i n f o r m a ti o n c o n ta in e d in th e d o c u m e n ts i d e n t if i e d i n p a r a g r a p h s 4 .1 , 4 . 2 a n d 4 . 3 o f t h e le t t e r d a te d Page 9 of 153 30 AUGUST 2019 – DAY 153 2 8 A u g u s t 2 0 1 9 fr o m C li ff D e c k e r H o f m e y r a d d r e s s e d to t h e s e c r e t a r ia t o f t h e c o m m i s s io n w i ll b e i n c l u d e d in t h e c o m m is s i o n ’s r e c o r d o n ly i n a r e d a c t e d – r e d a c te d fo r m . I s t h a t a d e q u a t e ? A D V K AT E H O F M E Y R : I n d e e d C h a ir. C H A I R P E R S O N : Is t h a t a d e q u a t e ? A D V K AT E H O F M E Y R : I n d e e d . C H A I R P E R S O N : O k a y. A lr i g h t th a n k y o u . I th i n k I m u s t t h e n s a y w e w i ll m a k e t h a t 1 a n d 2 w i ll b e t h e o r d e r in 1 a b o v e m a y b e r e c o n s i d e r e d a t a l a t e r s ta g e s h o u ld c ir c u m s ta n c e s d ic ta t e i ts r e c o n s i d e r a t i o n . 10 A D V K AT E H O F M E Y R : H m . CHAIRPERSON: Ja. A D V K AT E H O F M E Y R : T h a n k y o u C h a ir w e a r e i n d e b t e d . C h a ir th e fi n a l p r o c e d u r a l a s p e c t is j u s t t o u p d a t e y o u i n s o fa r a s R u le 3 . 3 N o ti c e s in r e s p e c t o f M r M a i n a n y a ’s e v i d e n c e i s c o n c e r n e d . C h a i r a s y o u w i ll s e e w h e n w e c o m m e n c e w i th M r M a i n g a n y a ’s e v id e n c e i t c o m e s i n t w o parts. Th e r e w a s a n i n i ti a l a ffi d a v i t i n r e s p e c t o f w h ic h a R u l e 3 . 3 N o t ic e w a s is s u e d t o a n i m p l ic a te d p e r s o n . P u r s u a n t t o t h a t n o t ic e b e i n g i s s u e d w e r e c e iv e d a n a p p li c a t io n f o r c r o s s - e x a m in a ti o n fr o m t h e i m p l ic a t e d p e r s o n b u t t h a t w a s s u b s e q u e n t ly w i t h d r a w n . 20 There was t h e n a f u r t h e r a ffi d a v it t h a t w a s r e c e i v e d f r o m M r M a in g a n y a o n W e d n e s d a y o f l a s t w e e k a n d i t w a s a s u p p l e m e n t a r y a ffi d a v i t . It has b e e n p l a c e d i n th e f o l d e r th a t – i n t h e b u n d l e th a t w e w il l c o m e to . I n r e s p e c t o f t h a t a ffi d a v i t t h e r e w e r e t h r e e f u r th e r R u l e 3 . 3 N o ti c e s t h a t n e e d e d t o b e is s u e d . T h e y w e r e is s u e d o n th e Fr id a y o f l a s t w e e k fi r s t t h i n g i n t h e m o r n i n g . T h a t m e a n s i m p li c a t e d p e r s o n s o b t a i n e d a w e e k ’s Page 10 of 153 30 AUGUST 2019 – DAY 153 n o t ic e o f t o d a y s ’ e v i d e n c e . T h e r e h a s b e e n o n l y o n e r e s p o n s e t o t h a t a n d t h a t w a s a r e s p o n s e r e c e iv e d y e s t e r d a y fr o m M r K o m a n e ’s a tt o r n e y s . C h a i r t h a t c o r r e s p o n d e n c e i n d ic a t e s a n d if I m a y ju s t b e g le a v e to h a n d i t u p t o y o u C h a ir b e f o r e I g o t o i t . C H A I R P E R S O N : Ye s . A D V K AT E H O F M E Y R : C h a ir t h e w a y it h a s b e e n p u t to g e th e r i s t h e c o v e r in g e m a i l t h a t y o u s e e th e r e i s a c t u a ll y t h e e m a i l th a t th e c o m m i s s io n s e n t i n r e s p o n s e t o t h e l e t t e r th a t w a s r e c e iv e d f r o m M r K o m a n e ’s a t to r n e y s . S e c o n d i n t h e d o c u m e n ts t h a t h a v e b e e n h a n d e d 10 t o y o u is M r K o m a n e ’s l a w y e r ’s l e t te r. T h e e s s e n c e o f i t C h a ir a s I u n d e r s t a n d i t is t h a t Mr K o m a n e p l a c e s o n r e c o r d a t p a r a g r a p h 1 o f th e le t t e r w h i c h y o u w il l fi n d o n t h e s e c o n d p a g e o f i t t h a t h e d e n i e s a n y in v o lv e m e n t i n t h e a l le g e d p a y m e n ts th a t a r e d e s c r i b e d a n d w e w il l c o m e t o t h a t in Mr M a i n g a n y a ’s e v i d e n c e . H e g o e s o n to r a i s e c o n c e r n t h a t t h e a l l e g a ti o n is b a s e d p u r e ly o n h e a r s a y e v i d e n c e w i th n o c o r r o b o r a t in g a l le g a ti o n and s t a te m e n ts , fu r t h e r m o r e a ff i d a v i ts or lacks merit d o c u m e n ts and is s u p p o r t in g conceived to th e be u n s u b s t a n ti a te d a n d t h e c o n c e r n is th a t i t m a k e s i t i m p o s s i b l e fo r t h e ir c li e n t t o r e s p o n d t o i t . A t p a r a g r a p h 3 c o n c e r n s a r e r a is e d a b o u t t h e 20 p u b lic in t e r e s t i n t h e c o m m i s s io n a n d t h e p r e j u d ic e to M r K o m a n e b o t h in p r i v a t e a n d h i s p u b li c c a p a c it y s h o u l d t h e a l le g a ti o n s b e m a d e p u b l ic a l t e r n a t iv e ly h is c l i e n t b e a s s o c i a te d w i th t h e a ll e g a t io n s a n d t h e n a t 4 t h e y a r e c o n c e r n e d – t h e y r a is e d t h e c o n c e r n t h a t h e h a s n o t b e e n g r a n t e d a d e q u a t e ti m e t o r e s p o n d t o t h e n o tic e a n d h a s n o t r e c e i v e d a ll t h e n e c e s s a r y i n f o r m a ti o n to p r o p e r l y r e s p o n d . Page 11 of 153 A n d i f y o u g o to t h e 30 AUGUST 2019 – DAY 153 la s t p a r a g r a p h o n t h a t p a g e i t c o n c l u d e s o n t h e b a s is o f a r e q u e s t t h a t M r K o m a n e b e f u r n is h e d w i th t h e fo u n d i n g a ffi d a v i t o f M r M a in g a n y a o r a n y c o r r o b o r a ti n g e v i d e n c e th a t m i g h t e x i s t i n o r d e r f o r h i m t o a s s e s s t h e m e r i ts a n d o b t a i n th e n e c e s s a r y fu r t h e r l e g a l a d v ic e a n d a s s is ta n c e h e is e n ti t le d t o . C h a ir th e le t t e r o n i ts f a c e d i d n o t m a k e a n y c la i m i n r e l a ti o n t o th e p r o c e e d i n g o f M r M a i n g a n y a ’s e v id e n c e . But out of c a u ti o n y e s te r d a y e v e n i n g a l e t t e r w a s s e n t th a t is th e fi r s t l e t te r i n th e p a c k t o th e r e p r e s e n ta t iv e s a n d i t w a s m a d e c l e a r t o M r K o m a n e ’s r e p r e s e n t a tiv e s t h a t i t w a s t h e i n te n ti o n o f t h e l e g a l te a m t o p r o c e e d 10 w i t h Mr M a in g a n y a ’s t e s ti m o n y. Yo u w i ll s e e t h a t a t p a r a g r a p h 3 o f t h e email. I t fu r t h e r w e n t o n to i n d ic a te t h a t i f M r K o m a n e i n te n d e d t o o b j e c t t o th e c o m m i s s i o n p r o c e e d i n g t o h e a r t h e e v i d e n c e o f M r M a in g a n y a t h a t h e w a s in v i t e d t o s e n d a l e g a l r e p r e s e n t a ti v e t o th e c o m m i s s io n to make such r e p r e s e n t a t io n s . And it c o n ti n u e d in c o n c l u s i o n t o s a y i f n o l e g a l r e p r e s e n t a tiv e s a p p e a r t o m a k e s u c h r e p r e s e n t a ti o n s th e c o m m i s s i o n w il l p r o c e e d w it h t h e e v i d e n c e o f M r M a in g a n y a a n d y o u r c li e n t w ill b e a b l e t o b r i n g w h a t e v e r a p p l ic a ti o n h e in t e n d s t o b r i n g a n d t o p r o v i d e h i s v e r s i o n t o t h e c o m m is s i o n i n d u e course. 20 C h a ir t h e o t h e r th in g I c a n u p d a t e y o u o n w h ic h is n o t r e fl e c t e d i n th is e m a il is o f e a r li e r t h i s m o r n i n g th e o th e r a ff id a v i t o f M r M a in g a n y a a s w e l l a s a n a ff id a v i t o f M r R a m a w h ic h w il l b e r e fe r r e d to in t o d a y s ’ p r o c e e d i n g s h a v e b e e n s e n t t o M r K o m a n e i n r e s p o n s e t o h is r e q u e s t . C h a ir I a m n o t a w a r e o f a n y l e g a l r e p r e s e n ta t iv e t o d a y fo r Mr K o m a n e a n d s o i t is m y p r o p o s a l t h a t w e c o n t in u e w i th t h e e v id e n c e a n d o f c o u r s e w e a r e e a g e r t o r e c e iv e a n y i n fo r m a ti o n fr o m a n y Page 12 of 153 30 AUGUST 2019 – DAY 153 p e r s o n s r e la t e d t o t h e m a n d a t e o f t h e c o m m i s s io n a n d i f i n d u e c o u r s e M r K o m a n e s e e k s t o d o s o o r m a k e s a n a p p lic a ti o n to c r o s s - e x a m in e a n y w i tn e s s w e w il l p l a c e t h a t b e fo r e y o u C h a ir f o r d e t e r m i n a ti o n . C H A I R P E R S O N : Ye s a n d I s e e th a t o n th e l a s t p a g e o f h is le t t e r – h i s a tt o r n e y s l e t t e r i t d o e s e m p h a s is e t h a t h e i n te n d s to g i v e h is f u l l c o o p e r a ti o n . A D V K AT E H O F M E Y R : I n d e e d . CHAIRPERSON: To t h e i n q u ir y a n d j u s t o n c e a g a i n d o e s m a k e th e p o i n t t h a t t h e l a c k o f n o ti c e , la c k o f t i m e a n d m i n i m a l a d m i s s i b l e 10 in f o r m a ti o n a g a i n s t h i m is u n f a i r a n d p r e j u d ic i a l . A D V K AT E H O F M E Y R : H m . C H A I R P E R S O N : I th i n k t h a t t h e i m p o r t a n t t h i n g is t h a t h e k n o w s t h a t t h e w i t n e s s w il l b e g iv i n g e v i d e n c e to d a y a n d h e h a s b e e n a d v is e d t h a t he could be here if he wishes to object. la w y e r s a r e n o t h e r e . A n d h e is n o t h e r e o r h i s A n d w h a te v e r p r e ju d i c e m a y – h e m a y s u ff e r w o u ld – a t l e a s t h e w i ll b e g i v e n a c h a n c e t o p r e s e n t w h a te v e r c h a l le n g e h e w i s h e s t o p r e s e n t . S o I t h i n k it is o k a y w e c a n p r o c e e d a n d h e m u s t s i m p l y b e g iv e n w h a t e v e r i t is h e is e n ti t le d to fr o m th e c o m m i s s io n . 20 A D V K AT E H O F M E Y R : I n d e e d C h a ir. C H A I R P E R S O N : T h a t h e m i g h t n o t h a v e b e e n g iv e n y e t. A D V K AT E H O F M E Y R : I n d e e d a n d i f w h a t w e h a v e g i v e n h i m i n h is v ie w is i n a d e q u a t e a n d t h e r e a r e fu r t h e r d o c u m e n t s t h a t a r e r e l e v a n t. C H A I R P E R S O N : Ye s . A D V K AT E H O F M E Y R : H e w i ll c e r t a i n l y e n g a g e w it h u s o n t h a t . Page 13 of 153 30 AUGUST 2019 – DAY 153 C H A I R P E R S O N : J a o k a y. A D V K AT E H O F M E Y R : C h a ir i f I m a y t h e n a s k M r M a i n g a n y a ’s le g a l r e p r e s e n t a tiv e j u s t t o p la c e h e r s e l f o n r e c o r d . C H A I R P E R S O N : Ye s . A D V K AT E H O F M E Y R : B e f o r e w e p r o c e e d w i t h t h e e v i d e n c e . C H A I R P E R S O N : J a . P le a s e c o m e f o r w a r d . A D V T H A B I L E F U R M A N : S h a ll I w a lk u p t o h e r e C h a ir ? C H A I R P E R S O N : T h e r e . S w i tc h th a t o ff a n d g o th e r e . A D V T H A B I L E F U R M A N : Th a n k y o u C h a ir. 10 M y n a m e is T h a b i l e F u r m a n . I a m th e R D C ’s l e g a l r e p r e s e n ta t iv e a n d t h e r e f o r e M r M a in g a n y a ’s l e g a l r e p r e s e n t a ti v e . CHAIRPERSON: Hm. A D V T H A B I L E F U R M A N : I a m fr o m C li ff D e c k e r H o f m e y r A t to r n e y s . C H A I R P E R S O N : T h a n k y o u v e r y m u c h . O k a y. A D V K AT E H O F M E Y R : T h a n k y o u C h a ir. I f I m a y r e q u e s t t h e w i tn e s s be sworn in? CHAIRPERSON: L e t i t b e – ja . P l e a s e a d m in is t e r t h e o a t h o r a ffir m a t i o n ? R E G I S T R A R : P le a s e s t a te y o u r fu ll n a m e s f o r th e r e c o r d ? 20 M R M A R K P H A K A M I L E M A I N G A N YA : M a r k P h a k a m il e M a in g a n y a . R E G I S T R A R : D o y o u h a v e a n y o b j e c t io n t o t a k i n g t h e p r e s c r i b e d o a t h ? M R M A R K P H A K A M I L E M A I N G A N YA : N o . REGISTRAR: D o y o u c o n s i d e r t h e o a th t o b e b i n d in g o n y o u r conscience? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . Page 14 of 153 30 AUGUST 2019 – DAY 153 R E G I S T R A R : D o y o u s w e a r t h a t t h e e v id e n c e y o u w i ll g iv e w i ll b e t h e tr u th ; n o th i n g b u t t h e t r u t h ; if s o p l e a s e r a is e y o u r r i g h t h a n d a n d s a y, s o h e lp m e G o d . M R M A R K P H A K A M I L E M A I N G A N YA : S o h e l p m e G o d . C H A I R P E R S O N : Ye s y o u m a y p r o c e e d . A D V K AT E H O F M E Y R : Th a n k y o u C h a i r. C h a ir a n d M r M a i n g a n y a b e f o r e I p r o c e e d w i t h th e q u e s ti o n i n g o f M r M a in g a n y a w i t h y o u r le a v e C h a ir I w o u l d j u s t l ik e to p l a c e t o d a y s ’ e v id e n c e i n c o n t e x t b e c a u s e i t h a s b e e n s o m e t i m e s i n c e w e h e a r d t h e a v ia ti o n e v i d e n c e . 10 C H A I R P E R S O N : Ye s it h a s b e e n a l o n g t i m e . A D V K AT E H O F M E Y R : i n d e e d . CHAIRPERSON: Ja. A D V K AT E H O F M E Y R : A n d i n o r d e r fo r t o d a y ’s e v i d e n c e t o m a k e s e n s e i n t h e s c h e m e o f t h e e v i d e n c e t h a t w a s p r e s e n te d p r e v i o u s ly if I m a y j u s t t a k e a m o m e n t t o lo c a t e i t? C h a ir o n e o f th e i n v e s ti g a t i o n s t h a t w a s p r e s e n te d i n th e a v i a ti o n s e s s i o n r e la t e d t o j e t f u e l s u p p ly a g r e e m e n ts th a t h a d b e e n c o n c l u d e d b e t w e e n S o u t h A fr ic a n E x p r e s s a n d S o u t h A fr ic a n A ir w a y s w i th a c o m p a n y c a ll e d E M L E n e r g y. Yo u w i ll r e c a l l w e h a d t h e e v i d e n c e o f M s L o o c k a n d M r Va u g h a n . B o t h o f th e m 20 d e a lt w i t h t h is p a r t ic u l a r j e t f u e l s u p p ly e n g a g e m e n ts w i th th e ir r e s p e c ti v e s t a te o w n e d e n ti ti e s a n d E M L . T h e ir e v i d e n c e w a s t h a t a j e t f u e l s u p p l y a g r e e m e n t h a d b e e n e n t e r e d i n t o b e tw e e n S o u t h A f r ic a n Express and EML Energy in c ir c u m s t a n c e s that did not f o l lo w p r o c u r e m e n t p r o c e s s e s a t a ti m e w h e n t h e f u e l w a s a lr e a d y b e i n g s u p p li e d t o S A E x p r e s s b y S A A . Page 15 of 153 30 AUGUST 2019 – DAY 153 CHAIRPERSON: Hm. A D V K AT E H O F M E Y R : A n d s o i t – i t o n i ts fa c e a p p e a r e d to b e a d u p lic a ti o n o f s u p p ly. CHAIRPERSON: Hm. A D V K AT E H O F M E Y R : I t w a s a t a p r i c e 3 0 % h ig h e r t h a n t h e p r ic e th a t S A E x p r e s s w a s r e c e i v i n g f u e l fr o m S A A a n d t h e f u r t h e r e v i d e n c e o f M s L o o c k w a s th a t E M L a f te r i t w a s a w a r d e d t h e c o n tr a c t f o r je t f u e l s u p p ly e n d e d u p n e v e r b e i n g p a i d f o r j e t f u e l s u p p ly b e c a u s e a ll – t h e o n ly p e r f o r m a n c e t h a t it r e n d e r e d w a s in r e l a ti o n to r e fu e l li n g a n d d e f u e li n g 10 o f a ir c r a f t w h i c h w a s i n a s m a ll p r o p o r ti o n . about R80 000 whereas t h o u s a n d s b e y o n d th a t . the c o n tr a c t w a s I think her evidence was fo r many many more C h a ir t h a t w a s t h e b a c k g r o u n d o f Mr L o o c k ’s e v i d e n c e fr o m t h e S o u th A f r ic a n Ex p r e s s a ir w a y s s id e . What Mr Va u g h a n g a v e u s in s i g h t i n t o w a s th a t a c t u a ll y p r i o r to t h a t S o u t h A fr ic a n E x p r e s s a ir w a y s c o n tr a c t t h e r e h a d b e e n a d e c is i o n o f t h e b o a r d o f S A A t o s e t a s id e c e r ta in j e t f u e l tr a n s a c ti o n s f o r c e r ta i n id e n t i fi e d p a r ti e s ? T h e r e w a s a p r o c e s s t h a t w a s r u n t o t r y a n d b r i n g w h a t w e r e r e f e r r e d to a s b la c k in d u s tr ia l is ts i n t o t h e je t fu e l s u p p ly s e c t o r a n d th e c o n s e q u e n c e o f t h a t w a s t h a t E M L w a s o n e o f t h r e e 20 p a r t i e s th a t w e r e i d e n t i fi e d f o r th a t 2 0 % s e t- a s i d e o f j e t fu e l . As i t s o h a p p e n e d o n M r Va u g h a n ’s e v id e n c e d e s p i t e t h e m b e i n g s h o r t lis t e d a n d r e c o m m e n d e d f o r a p p o i n t m e n t t h e y w e r e n o t a c tu a l ly a p p o i n te d i n t h e in i ti a l 2 0 1 6 t e n d e r. T h e r e w a s a l a t e r a p p o i n t m e n t o f E M L in 2 0 1 8 . S o t h a t is t h e c o n te x t a g a i n s t w h i c h M r M a i n g a n y a ’s e v id e n c e is h e a r d t o d a y a n d i t m i g h t n o t b e r e a d il y a p p a r e n t w h y w e w o u ld b e h e a r in g Page 16 of 153 30 AUGUST 2019 – DAY 153 fr o m a w i tn e s s fr o m th e I D C in c i r c u ms t a n c e s o f je t fu e l s u p p ly t o S A E x p r e s s b u t t h e r e a s o n f o r t h a t a n d i t w i ll b e tr a v e r s e d w i t h M r M a in g a n y a i n h is e v i d e n c e i s th a t o ff th e b a c k o f th e s e c o n tr a c ts w i t h S A A a n d S A E x p r e s s a f u n d i n g a p p lic a ti o n w a s m a d e b y E M L E n e r g y t o t h e ID C a n d i t r e c e iv e d f u n d in g a n d t h a t f u n d in g t r a n s a c t io n h a s b e e n in v e s t i g a t e d a n d w i ll b e e x p l o r e d w it h M r M a i n g a n y a t o d a y. And so C h a ir w i th t h a t b a c k g r o u n d i n p l a c e . C H A I R P E R S O N : T h a n k y o u v e r y m u c h fo r t h a t b a c k g r o u n d . A D V K AT E H O F M E Y R : 10 I f I m a y t h e n c o m m e n c e w i th M r M a i n g a n y a ’s evidence? C H A I R P E R S O N : Ye s . W h ic h o n e o f t h e … A D V K AT E H O F M E Y R : R ig h t . C H A I R P E R S O N : F il e s s h o u l d – I s h o u ld … A D V K AT E H O F M E Y R : C h a ir fir s t o f a ll i f w e c o u l d j u s t e n t e r i n to t h e record. CHAIRPERSON: Oh yes. A D V K AT E H O F M E Y R : There are three f il e s c o m p r is i n g M r M a i n g a n y a ’s e v i d e n c e t o d a y. CHAIRPERSON: Hm. 20 A D V K AT E H O F M E Y R : Th e y a r e a l l in t h e D D 1 3 r a n g e a n d t h e y a r e fi le s D D 1 3 A , B a n d C . I f w e c a n e n te r t h o s e i n t o t h e r e c o r d . C H A I R P E R S O N : O n ly o n e o f t h e m h a s g o t h is a ffi d a v i t ? A D V K AT E H O F M E Y R : C o r r e c t . CHAIRPERSON: The rest are annexures? A D V K AT E H O F M E Y R : C o r r e c t … Page 17 of 153 30 AUGUST 2019 – DAY 153 CHAIRPERSON: Hm. A D V K AT E H O F M E Y R : A n d o t h e r d o c u m e n ts . CHAIRPERSON: And other d o c u m e n ts . The f il e that has M r M a i n g a n y a ’s a ffi d a v i t o r s ta t e m e n t w il l b e E X H I B I T D D 1 3 A a n d t h e n t h e r e a r e tw o o th e r f il e s . T h e y a r e l e v e r a r c h f il e s . O n e w il l b e m a r k e d E X H I B I T D D 1 3 B a n d th a t is t h e o n e w h o s e fi r s t a n n e x u r e is A n n e x u r e V D R 1 a n d t h e o th e r l e v e r a r c h f il e w i ll b e m a r k e d E X H I B I T D D 1 3 C a n d t h a t is t h e o n e w h o s e fi le d o c u m e n t b e a r s t h e l o g o o f I D C a n d is d a t e d 3 0 J a n u a r y 2 0 1 7 w i t h t h e h e a d i n g “ N e w A p p l ic a ti o n ” . 10 T h a t w il l b e EXHIBIT DD13C. A D V K AT E H O F M E Y R : T h a n k y o u C h a ir … C H A I R P E R S O N : Ye s . A D V K AT E H O F M E Y R : A n d w e w i ll s p e n d m o s t o f to d a y i n D D 1 3 A w h ic h c o n ta i n s t h e a ff i d a v i t - t h e fir s t a n d s e c o n d a ff id a v i t o f M r M a i n g a n y a b u t w e w i ll o n o c c a s i o n m o v e t o th e o t h e r d o c u m e n ts . M r M a i n g a n y a s o m y s u g g e s t io n t o y o u i f I m a y is t o k e e p A r e a d i ly a v a i la b le in fr o n t o f y o u a n d t h e n w h e n i t i s n e c e s s a r y t o g o t o B u n d l e s B a n d C I w il l i d e n ti fy t h a t . T h e s e c o n d th i n g is j u s t t o a s k t h a t y o u p u t y o u r m i c r o p h o n e 20 o n a n d w e f in d t h a t i f y o u b r i n g i t c lo s e r to y o u i t s o m e t i m e s a m p li f ie s a b i t b e t t e r. Thank you. M r M a i n g a n y a c o u l d y o u j u s t f o r th e r e c o r d c la r i fy f o r u s w h a t y o u r p o s i t io n i s a t th e I D C ? M R M A R K P H A K A M I L E M A I N G A N YA : My p o s i ti o n is th a t o f t h e C h i e f R i s k O ffi c e r. A D V K AT E H O F M E Y R : T h a n k y o u a n d w h e n d i d y o u j o i n th e ID C ? Page 18 of 153 30 AUGUST 2019 – DAY 153 M R M A R K P H A K A M I L E M A I N G A N YA : I joined the IDC in 2014, S e p te m b e r. A D V K AT E H O F M E Y R : T h a n k y o u a n d w h a t a r e y o u r q u a l if ic a ti o n s ? M R M A R K P H A K A M I L E M A I N G A N YA : I a m a C h a r t e r e d A c c o u n t a n t . A D V K AT E H O F M E Y R : Th a n k y o u a n d b e f o r e jo in i n g t h e I D C i n 2 0 1 4 w h a t d i d y o u r c a r e e r i n v o lv e ? M R M A R K P H A K A M I L E M A I N G A N YA : B a n k i n g , r is k m a n a g e m e n t in b a n k i n g a n d b e f o r e th a t I w a s i n P u b l ic S e r v ic e a s - a s a n a u d i t o r. A D V K AT E H O F M E Y R : T h a n k y o u . I f w e c a n th e n j u s t p ic k u p t h e f ir s t 10 p a g e o f y o u r a ffi d a v i t a n d y o u w il l fi n d t h a t a t p a g e 1 o f th e B u n d l e D D 1 3 A . M r M a i n g a n y a t h i s is a n a ff i d a v i t a s I h a v e i t t h a t y o u d e p o s e d t o p r e v io u s ly a s c o m p a r e d w i t h a s ta t e m e n t … M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : B u t j u s t fo r c o m p le ti o n s a k e c a n y o u c o n f ir m t h a t th is is y o u r a ff id a v i t a n d t h a t i t is c o n t e n t s a r e tr u e a n d c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : I c o n fir m . A D V K AT E H O F M E Y R : T h a n k y o u a n d th e n i f I c a n t a k e y o u t o y o u r s e c o n d a ff id a v i t th a t y o u p r o v i d e d t o th e C o m m is s i o n . Yo u w i ll f in d t h a t in t h e s a m e b u n d l e a t p a g e 3 2 . 1 - 3 - 2 . 1 . 20 M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : A n d c a n y o u j u s t c o n fir m f o r th e r e c o r d t h a t t h a t is th e s e c o n d a ff id a v i t t h a t y o u p r o v id e d t o t h e C o m m is s i o n a n d t h a t y o u c o n fi r m i t s c o n t e n t s a s tr u e a n d c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s I d o . A D V K AT E H O F M E Y R : Thank you. If we can then just return to the Page 19 of 153 30 AUGUST 2019 – DAY 153 fir s t p a g e o f y o u r a ffi d a v it a n d t h a t is a t p a g i n a t e d p a g e 1 . M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . A D V K AT E H O F M E Y R : I w o u ld lik e to p i c k it u p a t p a r a g r a p h 3 t h e r e . Yo u h a v e a lr e a d y t o l d u s a b o u t w h e n y o u j o i n e d t h e I D C b u t in t h a t paragraph you go on to explain some of the committees that you serve on. What are those? M R M A R K P H A K A M I L E M A I N G A N YA : S o s o m e o f th e m a r e th e S p e c i a l C r e d i t C o m m i t t e e , t h e C r e d i t C o m m i t te e a n d th e P o s t I n v e s t m e n t Committee. 10 A D V K AT E H O F M E Y R : A n d y o u in d ic a t e a ls o in t h a t p a r a g r a p h a b o u t a r e p o r t in g li n e t o y o u fr o m t h e R is k M a n a g e m e n t D e p a r t m e n t . C a n y o u e x p l a i n to u s h o w t h a t w o r k s ? M R M A R K P H A K A M I L E M A I N G A N YA : d e p a r t m e n t r e p o r ts to m e . So the risk I t is a s e c o n d li n e f u n c ti o n . management S o it is n o t d ir e c t ly i n v o l v e d i n t h e tr a n s a c ti o n s b u t it a s s e s s e s t h e m b e f o r e t h e tr a n s a c ti o n s a r e s u b m i tt e d t o t h e c o m m i t t e e s . A D V K AT E H O F M E Y R : T h a n k y o u . C H A I R P E R S O N : J u s t r a is e y o u r v o ic e a li t tl e h i g h e r i f y o u c a n . M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. 20 C H A I R P E R S O N : O k a y. A D V K AT E H O F M E Y R : M r M a in g a n y a w h a t I w o u ld lik e to d e a l w i th n e x t j u s t f o r u s t o b e a b le t o n a v i g a t e y o u r e v i d e n c e to d a y a n d u n d e r s t a n d th e ID C s p r o c e s s e s i s t o h a v e y o u r a s s i s t a n c e i n d e s c r i b i n g t o u s h o w t h e p r o c e s s e s o f t h e I D C w o r k w h e n it r e c e i v e s a n a p p lic a ti o n f o r f u n d in g a n d M r M a i n g a n y a I h a v e b e e n g u i d e d i n t h a t b y Page 20 of 153 30 AUGUST 2019 – DAY 153 a n a ffi d a v it t h a t w a s p r e p a r e d b y o n e o f y o u r f o r m e r c o ll e a g u e s M r R a m a - w h i c h h a d a ls o b e e n s u p p l i e d t o t h e C o m m i s s i o n a n d fo r ease of reference that appears at page 38 of the same Bundle A. That is DD13A. C a n y o u c o n f ir m w h o M r R a m a i s a n d w h e t h e r h e is k n o w n t o y o u ? M R M A R K P H A K A M I L E M A I N G A N YA : the IDC. M r R a m a w a s a n e m p lo y e e o f H e - h e w a s a - s p e c i fic a lly i n v o l v e d i n t h e C h e m ic a ls B u s i n e s s U n i t a s s e s s i n g th e d e a l m a k e r. A D V K AT E H O F M E Y R : T h a n k y o u a n d i f y o u … 10 C H A I R P E R S O N : S o r r y. I t m a y b e t h a t y o u r v o i c e is s o ft b y n a t u r e . M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . C H A I R P E R S O N : M a k e a n o th e r a tt e m p t t o s p e a k u p a b it . T h a n k y o u . M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. C H A I R P E R S O N : O k a y. M R M A R K P H A K A M I L E M A I N G A N YA : S o M r R a m a w a s a n e m p lo y e e o f t h e I D C . H e w a s a d e a l m a k e r i n t h e C h e m ic a l s B u s i n e s s U n i t . A D V K AT E H O F M E Y R : T h a n k y o u M r M a in g a n y a . T h a t is m u c h b e t te r I think. M R M A R K P H A K A M I L E M A I N G A N YA : J a . 20 A D V K AT E H O F M E Y R : S o i f w e c o u l d c o n t in u e i n t h a t fr a m e f o r t h e rest of your evidence. CHAIRPERSON: Ja. A D V K AT E H O F M E Y R : J u s t fr o m a n a u d i b i li ty p o in t o f v ie w. I f y o u g o t o th e l a s t p a g e o f t h a t a ff id a v i t. Yo u w il l s e e i t is t h e f in a l p a g e i n t h e fi le i n fr o n t o f y o u - D D 1 3 A - a n d i t is p a g e 6 1 . C o u ld y o u j u s t i n d ic a te Page 21 of 153 30 AUGUST 2019 – DAY 153 f o r t h e r e c o r d t h e d a te o n w h i c h t h is a ffi d a v i t w a s d e p o s e d t o ? M R M A R K P H A K A M I L E M A I N G A N YA : 7 J u n e 2 0 1 9 . A D V K AT E H O F M E Y R : Thank you. N o w w h a t Mr R a m a d o e s i n t h i s a ffi d a v i t is t o d e s c r i b e th e e n d t o e n d a p p l ic a t i o n p r o c e s s i n th e I D C a n d s o w h a t I w o u ld lik e to p r o p o s e t o d o w i t h y o u is t o g o t o t h a t a n d t h e n a s k y o u t o e x p l a i n i t t o u s b u t w e w i l l j u s t u s e t h e p o i n te r s in h is a ffi d a v i t f o r t h a t p u r p o s e a n d y o u w il l fi n d t h a t a t p a g e 3 - 9 - 3 9 . M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . A D V K AT E H O F M E Y R : 10 I t i s t h e s e c o n d p a g e o f h is a ffi d a v it a n d y o u w i ll s e e a h e a d i n g t h e r e “ E n d t o E n d A p p l i c a ti o n P r o c e s s ” . D o y o u s e e that? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : R i g h t . S o h e b e g i n s w i t h w h a t h a p p e n s b y th e P r e I n v e s t m e n t B u s in e s s C e n tr e a t p a r a g r a p h 5 . C a n y o u te ll u s a b o u t w h a t th a t c e n tr e d o e s w h e n i t r e c e i v e s a n a p p lic a ti o n ? M R M A R K P H A K A M I L E M A I N G A N YA : S o t h a t c e n tr e w o u l d b e t h e f ir s t r e c ip i e n t o f a p p l ic a ti o n s fr o m w h e r e v e r th e y c o m e fr o m e s p e c i a l ly in in G a u t e n g a n d th e n y o u h a v e o th e r a p p lic a ti o n s t h a t c o m e fr o m th e r e g i o n s b u t th a t c e n tr e i n G a u t e n g e s s e n t ia lly d o e s a p r e a s s e s s m e n t 20 o f t h e tr a n s a c t io n s . T h a t is to - t o c h e c k i f a m o n g o th e r t h in g s t h e y - th e y a r e w i t h i n t h e m a n d a t e o f t h e I D C t o f u n d a n d to d o a p r e l i m in a r y b a s ic a s s e s s m e n t b e f o r e th e y w e r e f o r w a r d e d to t h e b u s i n e s s u n i t … A D V K AT E H O F M E Y R : H m . M R M A R K P H A K A M I L E M A I N G A N YA : Fo r p r o p e r a s s e s s m e n t . Page 22 of 153 30 AUGUST 2019 – DAY 153 A D V K AT E H O F M E Y R : A n d - a n d w h a t h a p p e n s i f i t - if a n a p p li c a t io n p r o c e e d s p a s t t h a t Pr e In v e s t m e n t B u s in e s s C e n t r e ’s e v a l u a t i o n ? W h e r e d o e s i t g o n e x t? M R M A R K P H A K A M I L E M A I N G A N YA : S o i t - i t w il l g o to t h e - th e r e l e v a n t d e p a r t m e n t i n w h i c h t h a t u n i t f a l l s . S o i f i t is c h e m ic a ls it is s e n t t o th e C h e m ic a l s B u s i n e s s U n i t . A l s o t h e y a s s e s s t h e a s s e s s m e n t t h a t h a s b e e n d o n e to d e t e r m i n e i f th e y c a n p r o c e e d t o d o a d u e d i li g e n c e o n t h a t a p p li c a t io n . A D V K AT E H O F M E Y R : A n d t h e r e is r e f e r e n c e to a p e r s o n c a ll e d a d e a l 10 m a k e r. W h o is th a t i n t h e s tr u c t u r e s ? M R M A R K P H A K A M I L E M A I N G A N YA : So a deal maker would be the p e r s o n s t h a t - t h a t w o u l d b e in v o lv e d i n t h e d u e d il ig e n c e m a i n ly i n p r e p a r a ti o n o f th e tr a n s a c t i o n s f o r s u b m is s io n s t o t h e c o m m i t t e e . A D V K AT E H O F M E Y R : A n d c o u l d y o u t e l l u s a b i t a b o u t th a t d u e d i li g e n c e p r o c e s s ? W h a t d o e s it i n v o lv e ? M R M A R K P H A K A M I L E M A I N G A N YA : So the - I would say three d is t in c t p h a s e s . I t i n v o lv e s g e t ti n g d i ff e r e n t e x p e r t is e fr o m t h e v a r io u s p e o p l e i n t h e u n it . e x p e r t is e . 20 S o o n e p e r s o n w o u l d f o r in s ta n c e b e m a r k e t i n g O n e w o u l d b e t h e t e c h n ic a l e x p e r ti s e . O n e w o u ld b e t h e fi n a n c i a l . S o - a n d t h e n t h e r e a r e v a r i o u s o th e r u n i ts t h a t a r e i n v o l v e d in t h e d u e d i li g e n c e . S o f o r e x a m p l e t h e - t h e E n v ir o n m e n t a l U n it w h i c h g o e s o n t o c h e c k t h e e n v ir o n m e n t a l c o m p li a n c e o f t h e c l ie n t . Then the other w o u ld b e t h e L e g a l D e p a r t m e n t w h ic h w i ll r e v i e w t h e l e g a l a s p e c ts o f t h e t r a n s a c t io n . Th e n y o u a ls o h a v e t h e - t h e f ix e d a s s e t s v a l u a ti o n Page 23 of 153 30 AUGUST 2019 – DAY 153 u n i t w h i c h w o u l d v a l u e t h e a s s e ts . S o - s o a ll th o s e p e o p l e w il l b e a s s e m b l e d f o r a s p e c i fic tr a n s a c ti o n a n d - a n d s h o u l d i t b e a s s e s s e d a s r e a d i ly p a s s in g f o r d u e d i li g e n c e . T h a t is t h e te a m t h a t w i ll g o t o t h e c l ie n t a n d d o a d u e d i li g e n c e o n t h a t c li e n t . A D V K AT E H O F M E Y R : A n d w h e n t h e d u e d i li g e n c e is c o m p le t e w h a t is t h e n e x t p h a s e o f th e p r o c e s s ? M R M A R K P H A K A M I L E M A I N G A N YA : S o t h e n e x t p h a s e is t h a t e a c h e a c h m e m b e r w o u ld - w o u l d c o m p il e h i s r e p o r t a n d th e d e a l m a k e r 10 w o u ld - a n d t h e t e a m l e a d e r i n t h a t u n i t w o u ld b e a p p o i n te d a n d t h e t e a m l e a d e r w o u l d - w o u l d c o m p il e t h e a s s e s s m e n t w h ic h is th e s u b m is s io n n o w t h a t s h o u ld b e s e r v i n g a t t h e c o m m i t t e e fr o m a ll t h e v a r io u s m e m b e r s a n d t h a t a s s e s s m e n t - t h a t s u b m is s i o n r e p o r t w o u ld t h e n b e s e n t t o - t o t h e R is k M a n a g e m e n t D e p a r t m e n t w h ic h w o u l d d o a n in d e p e n d e n t a s s e s s m e n t o f th a t s u b m i s s io n a n d th e n t h e y - th e y w i ll r a i s e v a r i o u s is s u e s t h a t t h e y m i g h t h a v e w i t h t h e tr a n s a c t io n a n d t h e n t h e r e w o u ld b e a to a n d fr o m w i t h th e u n i ts w h e r e t h e y - t h e y tr y to a d d r e s s s o m e o f t h e r is k s t h a t a r e r a i s e d b y t h e r is k m a n a g e m e n t d e p a r t m e n t a n d - a n d th e n p o s t t h a t i f i t i s s ti ll p r o c e e d in g m e a n i n g if 20 a d e q u a t e m e a s u r e s a r e in c l u d e d i n th e s u b m i s s i o n to d e a l w i th s o m e o f t h o s e r is k s . It may be ready for - for submission to the Credit Committees. A D V K AT E H O F M E Y R : A n d a r e t h e C r e d i t C o m m i t t e e s t h e u l ti m a t e d e c is i o n m a k i n g b o d i e s i n r e l a ti o n t o th e a p p li c a t io n ? Page 24 of 153 30 AUGUST 2019 – DAY 153 M R M A R K P H A K A M I L E M A I N G A N YA : Ye s d e p e n d i n g o n th e a m o u n t t h a t i s r e q u e s te d i t w i ll g o t o v a r io u s c o m m i t t e e s a ll th e w a y u p to b o a r d c o m m i t t e e s d e p e n d in g o n th e r e q u e s t e d a m o u n t. If it is a p p r o v e d b y t h a t c o m m i t t e e th a t is a fi n a l d e c is i o n . A D V K AT E H O F M E Y R : c la r i ty. Thank you and can I just get one point of Yo u s p o k e a b o u t th e t e a m l e a d e r p r o d u c i n g th e s u b m is s i o n r e p o r t a n d t h e n y o u s p o k e a b o u t t h a t b e i n g e v a l u a t e d b y th e r is k m a n a g e m e n t c o m m i t te e . M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h , h u h - u h . 10 A D V K AT E H O F M E Y R : I s t h e r e a ls o a p e e r r e v i e w t h a t h a p p e n s b e f o r e it g o e s t o R is k M a n a g e m e n t ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s . A D V K AT E H O F M E Y R : R ig h t . S o - s o j u s t - s o t h a t I c a n g e t i t r i g h t t h e s u b m is s i o n r e p o r t … M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : I s p r e p a r e d ? M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . A D V K AT E H O F M E Y R : T h e n i t i s p e e r r e v i e w - r e v i e w e d . M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h , h u h - u h . 20 A D V K AT E H O F M E Y R : I s t h a t c o r r e c t? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s a n d - a n d th e h e a d o f t h e u n i t m u s t a ls o s ig n o ff o n t h e r e p o r t … A D V K AT E H O F M E Y R : R ig h t . M R M A R K P H A K A M I L E M A I N G A N YA : And th e - the e x e c u t iv e r e s p o n s i b l e m u s t a ls o s ig n o ff o n th a t r e p o r t d e p e n d in g o n t h e le v e l . Page 25 of 153 30 AUGUST 2019 – DAY 153 A D V K AT E H O F M E Y R : T h a n k y o u a n d c a n I s a y j u s t fr o m t h e b a s i s o f w h a t y o u h a v e d e s c r i b e d n o w i t s o u n d s l ik e a m u l tis t a g e p r o c e s s … M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . CHAIRPERSON: A D V K AT E H O F M E Y R : W i t h v a r i o u s e n d e a v o u r s to e n s u r e a c c u r a c y i n t h e p r o c e s s . Is th a t a f a ir d e s c r i p t i o n ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s . W e t r y to d o t h a t . A D V K AT E H O F M E Y R : T h a n k y o u a n d th e n a f t e r a d e c is i o n to f u n d h a s b e e n m a d e t h e r e h a s b e e n r e f e r e n c e t o a P o s t I n v e s t m e n t C o m m i t te e . 10 H o w d o e s t h a t c o m m i t t e e b e c o m e in v o lv e d ? M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. S o - s o a ft e r a d e c i s i o n is m a d e i t d o e s h a p p e n s o m e t i m e s t h a t v a r io u s a m e n d m e n t t o t h e a p p r o v e d tr a n s a c t io n s a r e r e q u e s t e d . S o t h a t c o m m i t t e e i s m a n d a te d t o - t o d e a l w i t h th o s e a m e n d m e n ts . It i s - i t is c o m p o s e d o f f o u r e x e c u tiv e s w h ic h a ll th e ti m e o n e o f th e m w o u ld b e t h e e x e c u tiv e i n w h ic h t h e - t h e a p p l ic a ti o n c o m e s f r o m a n d s o e a c h m e m b e r o f t h a t c o m m i t t e e a s s e s s e s t h e r e q u e s t . I t is n o t a c o m m i t t e e th a t - t h a t s i ts a n d d is c u s s e s . S o t h e s u b m is s i o n is s e n t e l e c tr o n ic a lly t o e a c h member and they assess the request and they either agree an approval 20 or not of the requested change. A D V K AT E H O F M E Y R : A n d d o t h e y g e n e r a l ly d o s o q u i t e s w i f tly a f t e r t h e s u b m is s i o n ? I s t h e r e a s o r t o f t i m e fr a m e o n r e s o lv i n g t h e r e q u e s t ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . S o - s o t h e c o m m i t te e w a s f o r m e d s p e c i fi c a ll y f o r th a t p u r p o s e . A D V K AT E H O F M E Y R : H m . Page 26 of 153 30 AUGUST 2019 – DAY 153 M R M A R K P H A K A M I L E M A I N G A N YA : T h a t w e m a y d e a l s p e e d i ly w i t h a r e q u e s t s t h a t c o m e fr o m t h e c l ie n t . S o - s o - a n d h e n c e it i s - it is e l e c tr o n ic . A D V K AT E H O F M E Y R : H m . M R M A R K P H A K A M I L E M A I N G A N YA : I t - i t g o e s a t t h e s a m e ti m e t o t o a ll th e m e m b e r s , ja . A D V K AT E H O F M E Y R : Do you have a sort of sense of the average ti m e ? Ar e w e t a lk i n g a b o u t d a y s a f t e r r e c e ip t ? M R M A R K P H A K A M I L E M A I N G A N YA : 10 I - I d o n o t h a v e th e a v e r a g e ti m e b u t e a c h m e m b e r tr i e s t o p r o c e s s i t a s a n d w h e n th e y r e c e iv e i t . A D V K AT E H O F M E Y R : Th a n k y o u . W h e n i t b e c o m e s r e l e v a n t I - I w il l s e e k c l a r i ty o n t h e t i m in g i n r e l a ti o n t o t h e s p e c i fi c d e c is io n t h a t t h e P o s t I n v e s t m e n t C o m m i t t e e m a d e i n t h is c a s e . M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. A D V K AT E H O F M E Y R : If w e m a y t h e n g o to t h i s p a r ti c u l a r a p p l ic a ti o n f o r f u n d i n g a n d y o u w il l p i c k u p h o w i t o r ig i n a t e d i n t h e I D C a g a i n in M r R a m a ’s a ffi d a v i t … M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . A D V K AT E H O F M E Y R : A n d th a t w o u l d b e a t p a g e 4 1 - 4 - 1 o f B u n d le 20 D D 1 3 A a n d y o u w i ll s e e a t t h e fi r s t p a r a g r a p h o n t h a t p a g e p a r a g r a p h 11 M r R a m a d e s c r i b e s h o w h e r e c e i v e d t h e E M L th a t is a r e fe r e n c e t o E M L E n e r g y B u s in e s s Pl a n . C o u l d y o u r e a d t h e r e w h a t h e r e c o r d s ? M R M A R K P H A K A M I L E M A I N G A N YA : S o h e s a y s : “I r e c e iv e d th e EML Business Plan fr o m M r Bi ll y C o b b i n a h a s e n i o r a c c o u n t m a n a g e r in t h e Page 27 of 153 30 AUGUST 2019 – DAY 153 D e v e l o p m e n t Fu n d s D e p a r t m e n t v i a a n e m a il o f 1 7 M a y 2 0 1 6 . H e i n t r o d u c e d th e a p p l ic a ti o n t o m e . T h e e m a i l tr a i l w i t h i n M r C o b b i n a h ’s e m a il s u g g e s ts t h a t th e e m a i l o r i g i n a t e d fr o m M r E d w a r d K o m a n e the D iv is io n a l Head Industrial Investment F a c ili t a ti o n Ec o n o m y D e p a r t m e n t. ” A D V K AT E H O F M E Y R : T h a n k y o u a n d i f w e c o u ld g o a n d t a k e a l o o k a t th a t e m a il . Yo u w il l n o w n e e d t o m o v e t o D D 1 3 B a n d i t is r i g h t t o w a r d s t h e b e g in n in g o f t h a t fi l e . 10 M R M A R K P H A K A M I L E M A I N G A N YA : S o r r y. A D V K AT E H O F M E Y R : S o i f y o u g o t o th e - D D 1 3 B . I t w il l b e o n e o f t h e o th e r fi l e s n e x t t o y o u o n y o u r l e f t . CHAIRPERSON: What is the page? A D V K AT E H O F M E Y R : T h e p a g e - 6 3 C h a ir. CHAIRPERSON: Thank you. A D V K AT E H O F M E Y R : 6-3. C o u l d y o u p le a s e d e s c r i b e f o r u s th e e m a i l t h a t a p p e a r s in t h e s e c o n d h a l f o f t h a t p a g e ? W h o i t is fr o m a n d w h o i t is to ? M R M A R K P H A K A M I L E M A I N G A N YA : S o it is f r o m E d w a r d K o m a n e . I t 20 is t o B il ly. A D V K AT E H O F M E Y R : C o u l d y o u g i v e t h e fu ll n a m e - Bi ll y ? M R M A R K P H A K A M I L E M A I N G A N YA : B ill y C o b b i n a h . A D V K AT E H O F M E Y R : C h a ir j u s t f o r t h e r e c o r d C o b b i n a h is s p e l t C - O B - B- I- N - A - H a n d … C H A I R P E R S O N : Ye s . Page 28 of 153 30 AUGUST 2019 – DAY 153 A D V K AT E H O F M E Y R : Mr K o m a n e t h a t i s E d w a r d K o m a n e , K - O - M - A- N-E. Mr Mainganya on what date was that email sent? M R M A R K P H A K A M I L E M A I N G A N YA : M a y, th e 1 7 t h 2 0 1 6 . A D V K AT E H O F M E Y R : T h a n k y o u a n d i f y o u c o u l d ju s t r e a d f o r u s what it says? M R M A R K P H A K A M I L E M A I N G A N YA : I t s a y s : “ H i B i ll y, a s d is c u s s e d o n t h e p h o n e n o w s e e a tt a c h e d a n d le t m e k n o w i f y o u n e e d a n y a d d it i o n a l in f o r m a ti o n . ” 10 A D V K AT E H O F M E Y R : A n d s ig n e d o ff b y ? M R M A R K P H A K A M I L E M A I N G A N YA : E d w a r d K o m a n e . A D V K AT E H O F M E Y R : W h o i s Mr B il ly C o b b i n a h ? M R M A R K P H A K A M I L E M A I N G A N YA : Mr B il ly C o b b i n a h is - w a s a n e m p l o y e e o f t h e I D C e m p lo y e d i n t h e D e v e l o p m e n t F u n d s U n i t w it h in the IDC. A D V K AT E H O F M E Y R : Th a n k y o u a n d t h e n i f y o u g o t o t h e t o p o f th a t p a g e t h e r e i s a n e m a i l b e t w e e n w h a t I u n d e r s t a n d t o b e Mr C o b b in a h and Mr Rama. Can you tell us when that was sent? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t w a s s e n t o n 1 7 M a y 2 0 1 6 . 20 A D V K AT E H O F M E Y R : I t a p p e a r s t o b e s h o r tl y a f t e r t h e e m a i l th a t w a s s e n t fr o m M r K o m a n e t o M r C o b b in a h . Is t h a t c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : A n d w h a t d o e s M r C o b b i n a h s a y t o Mr R a m a ? M R M A R K P H A K A M I L E M A I N G A N YA : “ C a n y o u d o t h is d e a l f a s t f o r a p o t e n ti a l c li e n t ? I h a v e a s k e d f o r th e Page 29 of 153 30 AUGUST 2019 – DAY 153 a u d it e d f i n a n c i a l s t a te m e n ts . ” A D V K AT E H O F M E Y R : T h a n k y o u . C H A I R P E R S O N : J u s t t o g e t s o m e th i n g s c o r r e c t . Yo u h a v e g o t t h e ID C a n d th e n y o u h a v e g o t d iv is i o n s w i t h i n i t ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . CHAIRPERSON: Is one of i ts d iv i s io n s I n d u s tr i a l Investment F a c ili t a ti o n ? M R M A R K P H A K A M I L E M A I N G A N YA : N o C h a ir p e r s o n . C H A I R P E R S O N : Is t h a t s o m e th in g e l s e ? 10 M R M A R K P H A K A M I L E M A I N G A N YA : Ms Edward Komane works. That is where a p p a r e n t ly I t is - it is th e E c o n o m ic D e v e lo p m e n t Department … CHAIRPERSON: Oh. M R M A R K P H A K A M I L E M A I N G A N YA : B u t i t i s n o t o f t h e I D C . CHAIRPERSON: Just repeat that. Repeat the last sentence. It is not … M R M A R K P H A K A M I L E M A I N G A N YA : I t is n o t a u n i t o f t h e I D C . C H A I R P E R S O N : O h , o k a y. S o th a t is a - t h a t i s o u ts id e o f … ? M R M A R K P H A K A M I L E M A I N G A N YA : I t is o u ts i d e . 20 C H A I R P E R S O N : O k a y. O k a y. N o th a t i s f in e . A D V K AT E H O F M E Y R : S o j u s t fo r - f o r m y o w n c l a r i fic a ti o n p u r p o s e s c a n w e u n d e r s t a n d t h e s e e m a ils t o b e a t h i r d p a r ty M r K o m a n e is s i t ti n g outside the IDC … M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . A D V K AT E H O F M E Y R : Fo r w a r d i n g s o m e t h i n g t h a t h e h a d d is c u s s e d Page 30 of 153 30 AUGUST 2019 – DAY 153 w i t h Mr C o b b i n a h t o h i m . Is th a t a s y o u u n d e r s ta n d th e b o t t o m e m a i l? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is w h a t th e e m a i l s a y s y e s C h a ir p e r s o n . A D V K AT E H O F M E Y R : A n d t h e n t h e - th e h i g h e r e m a i l is b e t w e e n t w o I D C e m p l o y e e s a s I u n d e r s t a n d i t . It i s M r C o b b i n a h t h e f o r w a r d in g i t t o M r R a m a b o th o f w h o m a r e I D C e m p l o y e e s . C o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. CHAIRPERSON: And … A D V K AT E H O F M E Y R : T h a n k y o u . 10 CHAIRPERSON: A n d ju s t r e p e a t w h a t M r C o b b i n a h ’s p o s i t io n w a s . Yo u - y o u d id - I th i n k y o u d i d s a y it e a r l i e r o n . M R M A R K P H A K A M I L E M A I N G A N YA : Ye s Chairman. He was e m p l o y e d b y th e I D C i n o n e o f o u r u n i t s c a ll e d D e v e lo p m e n t F u n d s D e p a r t m e n t. C H A I R P E R S O N : O h , o k a y. Yo u d i d n o t s a y w h a t h is p o s it i o n w a s ? D o y o u r e m e m b e r w h a t h is p o s i ti o n w a s ? M R M A R K P H A K A M I L E M A I N G A N YA : I - I … C H A I R P E R S O N : Yo u d o n o t k n o w ? M R M A R K P H A K A M I L E M A I N G A N YA : 20 I th in k it was a S e n io r A c c o u n t a n t M a n a g e r. C H A I R P E R S O N : O k a y. N o t h a t i s fi n e . I a m s u r e w e w i ll g e t - fi n d i t as some stage. A D V K AT E H O F M E Y R : I n d e e d . CHAIRPERSON: Ja. A D V K AT E H O F M E Y R : Th a n k y o u C h a ir. Page 31 of 153 I f w e c a n th e n j u s t m o v e 30 AUGUST 2019 – DAY 153 a h e a d to t h e a c tu a l d e c is io n t h a t w a s m a d e i n r e l a ti o n to t h is f u n d in g b u t b e fo r e w e l e a v e t h e p a g e t h a t w e a r e o n . I d o j u s t w a n t t o i n d ic a te C h a ir t h a t M r K o m a n e ’s e m a i l a t t h e b o t to m r e f e r s t o s e e a t t a c h e d document. I f y o u g o o v e r to p a g e 6 5 - 6 - 5 - y o u w i ll th a t th a t is t h e a tt a c h m e n t to t h e e m a il a n d w h a t I w o u l d l ik e to j u s t d r a w t o th e a tt e n ti o n f o r t h e p u r p o s e s o f th e r e c o r d b e c a u s e i t w il l b e c o m e r e l e v a n t la t e r i n t h e e v i d e n c e o f Mr M a i n g a n y a . I s a t p a g e 7 1 - w e ll - s o r r y. L e t u s s t a r t a t 6 5 . W h a t is th a t d o c u m e n t Mr M a in g a n y a ? 10 M R M A R K P H A K A M I L E M A I N G A N YA : I t s a y s b u s i n e s s p l a n 2 0 1 6 . A D V K AT E H O F M E Y R : A n d w h o s e b u s i n e s s p la n i s i t? M R M A R K P H A K A M I L E M A I N G A N YA : A t h e t o p i t h a s g o t E M L E n e r g y. A D V K AT E H O F M E Y R : H a v e - h a d y o u s e e n t h i s d o c u m e n t b e fo r e ? M R M A R K P H A K A M I L E M A I N G A N YA : N o . A D V K AT E H O F M E Y R : I f w e m o v e i n t h e b u s i n e s s p la n t o p a g in a t e d p a g e 7 1 - 7 - 1 - y o u w i ll s e e a h e a d i n g t h e r e “ P r o d u c t a n d S e r v ic e s ” . Do you see that? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : C a n y o u r e a d fo r u s w h a t E M L E n e r g y i n d ic a te s 20 t h e r e i n t h e b u s i n e s s p l a n a r e i t s p r o d u c ts a n d s e r v ic e s ? M R M A R K P H A K A M I L E M A I N G A N YA : I t s a y s : “ E M L E n e r g y i s s e ll in g J e t A 1 a n d o th e r - a n d o ff e r the fo ll o w i n g s e r v ic e s : r e f u e ll in g , d e f u e l in g , c a l i b r a t i o n , s t o r a g e , m a i n t e n a n c e a n d r e p a ir s . ” A D V K AT E H O F M E Y R : T h a n k y o u . C a n y o u j u s t e x p l a i n to u s w h a t - Page 32 of 153 30 AUGUST 2019 – DAY 153 w h a t w o u l d a b u s i n e s s p l a n o f th is n a t u r e fr o m a p o t e n t ia l a p p li c a n t f o r f u n d i n g t h e n - h o w w o u l d i t b e tr e a t e d t h e n b y th e ID C ? M R M A R K P H A K A M I L E M A I N G A N YA : t h e Pr e In v e s t m e n t B u s in e s s C e n tr e . S o - s o r e m e m b e r I r e fe r r e d to S o a b u s in e s s p la n li k e t h is w o u ld h a v e g o n e to - t o t h a t c e n tr e f o r e v a l u a t i o n b e f o r e i t g o e s t o t h e business unit. A D V K AT E H O F M E Y R : And who would be the person who did that e v a l u a t i o n in t h is c a s e ? M R M A R K P H A K A M I L E M A I N G A N YA : 10 Yo u m e a n i n a n y o f t h e p e o p l e y o u h a v e m e n ti o n e d s o f a r ? A D V K AT E H O F M E Y R : Ye s . M R M A R K P H A K A M I L E M A I N G A N YA : A t - a t t h e p r e b u s in e s s c e n tr e … A D V K AT E H O F M E Y R : Ye s . M R M A R K P H A K A M I L E M A I N G A N YA : It would have been none of t h e s e p e o p l e s o fa r. A D V K AT E H O F M E Y R : R ig h t . I f w e c a n t h e n ju s t j u m p a h e a d s o t h a t w e o r i e n t a te o u r s e lv e s i n t i m e . As I h a v e i t th is e m a il w it h t h e a p p lic a ti o n a n d t h e p l a n c o m e s th r o u g h i n M a y 2 0 1 7 . T h e r e i s a fi n a l 20 d e c is i o n to a p p r o v e t h i s fu n d i n g o n 6 Fe b r u a r y 2 0 1 7 . S o I w o u ld l ik e t o ju m p a h e a d to th a t a n d th e n in th e e v i d e n c e w e w il l g o t h r o u g h t h e s t a g e s t o w a r d s th e d e c is i o n b u t i t is q u i te u s e f u l f o r u s n o w to u n d e r s t a n d w h a t th e d e c is i o n w a s i f w e m a y … M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. A D V K AT E H O F M E Y R : A n d y o u w i ll fi n d th a t d e c is io n in t h e s a m e Page 33 of 153 30 AUGUST 2019 – DAY 153 B u n d l e D th a t is D D 1 3 B a t p a g e 2 - 6 - 4 . M r M a in g a n y a a s I u n d e r s ta n d it t h i s is t h e m in u t e s o f t h e m e e t i n g a t w h i c h t h e d e c i s i o n i n r e l a ti o n t o E M L’s f u n d in g a p p l ic a ti o n w a s t a k e n . Is - i s t h a t c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : J u s t e x p la i n t o u s w h e n th a t w a s . M R M A R K P H A K A M I L E M A I N G A N YA : 6 F e b r u a r y 2 0 1 7 . A D V K AT E H O F M E Y R : W e r e y o u i n v o lv e d i n th is d e c is i o n o n t h a t d a y ? M R M A R K P H A K A M I L E M A I N G A N YA : I w a s n o t i n v o lv e d h e r e . A D V K AT E H O F M E Y R : I - I c a n s e e d o w n t h e p a g e u n d e r t h e h e a d in g 10 “Apologies”. I t a p p e a r s y o u g a v e y o u r a p o l o g ie s f o r n o t h a v i n g b e e n p r e s e n t . I s t h a t c o r r e c t? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : S o w o u l d y o u o r d i n a r i ly b e o n t h e c o m m i t t e e t h a t w a s d e c id i n g t h is a p p li c a t io n ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : But as it so happened you were not there on t h a t d a y. Is t h a t r ig h t ? M R M A R K P H A K A M I L E M A I N G A N YA : N o , I w a s n o t t h e r e . A D V K AT E H O F M E Y R : Th a n k y o u a n d th e n i f y o u g o o v e r t h e p a g e to 20 2 - 6 - 5 w h a t is th a t ? M R M A R K P H A K A M I L E M A I N G A N YA : Th is is a f u n d in g r e q u e s t b y EML. A D V K AT E H O F M E Y R : Is t h is w h a t w a s d e c i d e d b y t h e c o m m i t t e e in r e l a ti o n t o t h e f u n d in g ? If y o u s e e u n d e r th e h e a d i n g 3 . 1 “ E M L E n g i n e e r i n g a n d C o n s tr u c ti o n ( P t y ) L td ( “ E M L ” ) ” . I t s a y s : Page 34 of 153 30 AUGUST 2019 – DAY 153 “ T h e c o m m i t t e e w a s r e q u e s te d to a p p r o v e th e f o ll o w i n g : ” Do you see that? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . I s e e th a t . S o - o k a y. A D V K AT E H O F M E Y R : I s t h a t w h a t t h e y d id a p p r o v e ? M R M A R K P H A K A M I L E M A I N G A N YA : T h is i s w h a t w a s r e q u e s t e d . W h a t w a s a p p r o v e d i t is o n t h e f o ll o w i n g p a g e . A D V K AT E H O F M E Y R : T h a n k y o u . M R M A R K P H A K A M I L E M A I N G A N YA : T h e d e c is i o n . 10 A D V K AT E H O F M E Y R : T h a n k y o u . I f w e c o u ld j u s t t a k e a b i t o f t i m e w i t h s u b p a r a g r a p h 1 o f 3 . 1 o n p a g e 2 - 6 - 5 . I w o u l d lik e t o u n d e r s t a n d t h e t w o f a c il i ti e s in r e s p e c t o f w h ic h f u n d i n g w a s s o u g h t . Can you e x p l a i n t o u s w h a t t h e fir s t f a c i li ty w a s w h ic h y o u s e e u n d e r s u b p a r a g r a p h 1 o n th a t p a g e ? M R M A R K P H A K A M I L E M A I N G A N YA : S o th e f a c il i ty w a s f o r w o r k i n g c a p i t a l . Th a t w a s f o r s ix m i ll io n t h a t w a s r e q u e s t e d t o b e fu n d e d u n d e r the MSEP program which the IDC manages. A D V K AT E H O F M E Y R : C h a ir w e w il l c o m e b a c k t o e x p lo r e w h a t M S E P means. 20 M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. A D V K AT E H O F M E Y R : But fo r present purposes th a n k you M r M a i n g a n y a a n d te ll u s w h a t th e te r ms o f th e l o a n w a s g o in g to b e . M R M A R K P H A K A M I L E M A I N G A N YA : I t s a y s : “ T h e l o a n w il l b e u s e d t o fu n d w o r k i n g c a p i ta l a n d w i ll h a v e a t e r m o f 4 2 m o n th s , s ix m o n t h s c a p i ta l Page 35 of 153 30 AUGUST 2019 – DAY 153 m o r a t o r i u m a n d s c u l p t u r e d p a y m e n ts a s f o l lo w s : in s t a l m e n t o n e t o 1 2 , 2 2 0 0 0 0 ; i n s t a l m e n t 1 3 to 2 4 , 120 000; in s ta l m e n t 25 to 36, 160 000. R e p a y m e n ts w i ll b e in 3 5 i n s ta l m e n ts o f 1 6 6 0 0 0 a n d a f in a l p a y m e n t o f 1 9 0 0 0 0 . I n t e r e s t w i ll b e a t four percent.” A D V K AT E H O F M E Y R : Th a n k y o u . s o c a n I ju s t c la r i fy t h e r e I u n d e r s t a n d a t e r m o f 4 2 m o n t h s - I h a d to d o a q u i c k c a l c u la t io n i n a d v a n c e o f t o d a y ’s e v i d e n c e - i s t h r e e a n d a h a l f y e a r s . I s t h a t r i g h t ? 10 M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s . A D V K AT E H O F M E Y R : A n d t h o s e p a y m e n ts th a t y o u s e e o n e to 1 2 , 1 3 t o 2 4 a n d 2 5 to 3 6 a r e th o s e m o n th ly p a y m e n t s ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . T h e s e w il l b e m o n th ly payments. A D V K AT E H O F M E Y R : S o w h e n i t s a y s o n e t o 1 2 t h a t is m o n t h o n e t o m o n th 1 2 . Is t h a t c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s . A D V K AT E H O F M E Y R : O v e r th e p e r io d a n d s o t h e fu ll p e r i o d i f y o u a d d t h e s i x m o n t h c a p i t a l m o r a to r i u m w o u l d b e t h r e e y e a r s p lu s s ix 20 m o n th s w h ic h is f o u r y e a r s . Is m y u n d e r s t a n d in g c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : W h i c h i s 4 2 m o n t h s . S o r r y. A D V K AT E H O F M E Y R : W e ll 4 2 m o n t h s i s t h r e e a n d a h a l f y e a r s . Is t h e c a p i t a l m o r a t o r i u m w it h in t h e 4 0 … ? M R M A R K P H A K A M I L E M A I N G A N YA : W i t h i n th e 4 2 m o n th s . A D V K AT E H O F M E Y R : E x c e l le n t . S o t h e f u ll t e r m o f th is l o a n i s t h r e e Page 36 of 153 30 AUGUST 2019 – DAY 153 and a half years. The 42 months. M R M A R K P H A K A M I L E M A I N G A N YA : T h e 4 2 m o n t h s , y e s . A D V K AT E H O F M E Y R : T h a n k y o u a n d th e n t e l l u s a b o u t th e s e c o n d p i e c e o f f u n d in g th a t w a s a p p r o v e d . M R M A R K P H A K A M I L E M A I N G A N YA : S o t h a t w a s : “ A 6 5 0 0 0 0 0 p la n t a n d e q u i p m e n t s u b o r d i n a t e d lo a n f a c ili t y t o b e u s e d f o r th e u p g r a d e o f p l a n t a n d e q u ip m e n t a n d t h e p u r c h a s e o f b o w s e r s . Th e f a c i li ty w il l h a v e a t e r m o f fi v e y e a r s a n d is e x p e c te d t o a c h i e v e a 1 3 . 8 p e r c e n t r e a l a f te r t a x 10 r e tu r n . R e p a y m e n ts w i ll b e i n t h e f o r m o f c a s h s w e e p s fr o m y e a r 2 0 2 1 t o fi n a n c i a l y e a r 2 0 2 4 m a in t a i n in g a m i n i m u m c a s h b a la n c e o f o n e m i l li o n with cash sweeps occurring every six m o n th s b e g in n i n g 2 8 F e b r u a r y 2 0 1 8 . ” A D V K AT E H O F M E Y R : M r M a i n g a n y a c a n y o u j u s t c o n f ir m fo r m e w h a t w a s t h e te r m o f t h is p l a n t a n d e q u i p m e n t l o a n ? M R M A R K P H A K A M I L E M A I N G A N YA : Fiv e y e a r s . A D V K AT E H O F M E Y R : 20 Thank you. T h e n c a n y o u h e l p m e w i th s o m e t h i n g b e c a u s e I a m - t h is w a s a p p r o v e d in 2 0 1 7 . I s t h a t c o r r e c t? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s C h a i r p e r s o n . A D V K AT E H O F M E Y R : W e a r e i n F e b r u a r y 2 0 1 7 a s I r e c a ll i t . M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : S o a fi v e te r m w o u l d t a k e y o u to 2 0 2 2 . Is t h a t correct? Page 37 of 153 30 AUGUST 2019 – DAY 153 M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : S o h e l p m e w it h t h e l a s t s e n t e n c e t h e r e t h e n , it s a y s , “ R e p a y m e n t w il l b e i n t h e f o r m o f c a s h s w e e p s f r o m f i n a n c i a l year 2021 to 2024 maintaining a minim um cash balance of R 1 m i ll i o n ” , Is n ’ t 2 0 2 4 b e y o n d t h e t e r m o f th e l o a n f a c il it y ? M R M A R K P H A K A M I L E M A I N G A N YA : S o th e t e r m o f t h e l o a n f a c il i ty w o u ld s ta r t f r o m 2 0 2 1 in t e r m s o f r e p a y m e n t s . I t w i ll s t a r t fr o m 2 0 2 1 , 10 2022, 2023, 2024 s o i t d o e s n ’ t s t a r t fr o m F e b r u a r y 2017, the r e p a y m e n t s t h e r e o f , o n ly s t a r t f r o m 2 0 2 1 . A D V K AT E H O F M E Y R : W e ’l l l o o k a t t h a t , is t h a t y o u r c l e a r u n d e r s t a n d in g o f h o w i t w o r k s ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s s o fr o m th e d a t e o f a p p r o v a l u n til 2 0 2 1 t h e r e a r e n o c a s h s w e e p s . A D V K AT E H O F M E Y R : B u t t h e r e a r e r e p a y m e n ts p r e c e d i n g th a t , i s t h a t r ig h t ? M R M A R K P H A K A M I L E M A I N G A N YA : S o r e p a y m e n ts w o u l d o n l y o c c u r i f th e r e ’s c a s h b u t c o n tr a c t u a ll y t h e c li e n t is o b li g e d to s t a r t 20 r e p a y i n g fr o 2 0 2 1 . A D V K AT E H O F M E Y R : O k a y w e ’ ll n e e d to e x p lo r e t h a t a b i t fu r t h e r w h e n w e g o to t h e c a s h fl o w s t a te m e n t s t h a t w e r e p r e p a r e d b y th e fi n a n c e d e p a r t m e n t , b e c a u s e t h e u n d e r s t a n d i n g y o u ’v e g iv e n n o w d o e s n o t a c c o r d w i th m y u n d e r s t a n d in g o f t h a t s c h e d u le b u t y o u m a y b e a b l e t o c l a r i f y f o r u s b u t a s y o u u n d e r s t a n d i t h e r e , i t ’s a f iv e y e a r l o a n fo r Page 38 of 153 30 AUGUST 2019 – DAY 153 p l a n t i n g e q u ip m e n t a n d t h a t i s a lo a n t h a t th e y r e c e iv e t h e c a s h f o r in F e b r u a r y – w e ll a t a p o i n t in 2 0 1 7 , c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : Ye s . A n d a s y o u u n d e r s t a n d i t d i d th e y o n ly h a v e a r e p a y m e n t o b l ig a ti o n t h a t b e g a n i n 2 0 2 1 ? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : Ye s . O k a y t h a n k y o u a n d t h e n o v e r th e p a g e a t 2 6 6 c a n y o u a s s is t m e t h e r e , is i t y o u r u n d e r s t a n d i n g t h a t t h o s e tw o l o a n s were then approved? 10 M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : Ye s t h a t ’s c o r r e c t . A n d ju s t d e a l w i t h p a r a g r a p h 3 a t th e t o p o f t h a t p a g e , i f y o u w il l , t h e r e w a s a n o t h e r f a c i li t y s o u g h t a n d a p p r o v e d , w h a t w a s t h a t? M R M A R K P H A K A M I L E M A I N G A N YA : S o i t’s a g u a r a n t e e f a c i li ty o f R 6 2 m i ll io n to To t a l S o u t h A f r i c a a n d R 3 m ill io n to E n g e n A fr ic a f o r je t A1 r e la t in g to t h e S A A c o n tr a c t , th e fa c i li ty w il l h a v e a t e r m o f 1 2 m o n th s . A D V K AT E H O F M E Y R : T h a n k y o u , Mr M a in g a n y a I’ d t h e n l ik e t o g o b a c k t o t h e to p ic o f M C E P a n d fo r t h a t p u r p o s e I ’d li k e t o m o v e t o p a g e 20 2 o f y o u r a ff id a v i t. N o w y o u ’ ll r e c a l l y o u r a ff id a v i t is in D D 1 3 A . Mr M a in g a n y a a t p a g e 2 o f y o u r a ff i d a v i t y o u ’ l l s e e h a l f w a y d o w n t h e r e ’s a h e a d i n g 4 .1 i n b o l d , “ M a n u fa c t u r in g C o m p e t i ti v e n e s s E n h a n c e m e n t Programme Q u a l i fy in g Criteria”. Is M a n u f a c t u r in g E n h a n c e m e n t Pr o g r a m m e a b b r e v i a te d a s M C E P ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t’s c o r r e c t . Page 39 of 153 C o m p e ti t iv e 30 AUGUST 2019 – DAY 153 A D V K AT E H O F M E Y R : CHAIRPERSON: A n d p le a s e t e l l u s w h a t t h a t i s … [ in t e r v e n e s ]. H a n g o n o n e s e c , I h a v e n ’ t g o t t o t h e r ig h t p a g e , w h a t ’s th e r ig h t p a g e o n h is a ffi d a v i t ? A D V K AT E H O F M E Y R : CHAIRPERSON: H i s a ff id a v i t p a g e 2 . P a g e 2 o k a y. A D V K AT E H O F M E Y R : A p o l o g i e s C h a ir. S o w e ’r e m i d w a y d o w n t h e p a g e a n d w e ’r e d e a li n g w i t h t h e h e a d i n g i n b o l d t h e r e , “ M a n u f a c t u r i n g C o m p e t it iv e n e s s E n h a n c e m e n t P r o g r a m m e ” . W h a t is t h a t p r o g r a m m e Mr Mainganya? 10 M R M A R K P H A K A M I L E M A I N G A N YA : S o M C E P is t h e p r o g r a m m e o f t h e D e p a r t m e n t o f Tr a d e a n d I n d u s tr y f o r w h ic h s o m e o f i t’s f u n d s a r e m a n a g e d b y t h e ID C , th e I D C ’s D e v e lo p m e n t F u n d s D e p a r t m e n t is a c u s t o d i a n o f th e M C E P p r o g r a m m e w i t h i n t h e ID C a n d i t a s s e s s e s a p p lic a ti o n s fo r f u n d i n g fr o m t h e M C E P p r o g r a m m e p r i o r t o t h e s e a p p lic a ti o n s b e in g s u b m i t t e d t o t h e v a r i o u s ID C C o m m i t t e e s fo r a p p r o v a l . I ’ m in f o r m e d t h a t M C E P is a i m e d a t a s s i s t i n g , m a n u f a c t u r i n g o f v a l u e a d d in g c o m p a n i e s t h a t n e e d f u n d i n g f o r w o r k i n g c a p i ta l o r c o m p a n i e s w i t h a t l e a s t 5 1 % B E E s h a r e h o ld i n g t h a t n e e d c a p i t a l e q u ip m e n t . 20 M C E P is p r ic e d a t a r a t e o f 4 % f ix e d f o r fo u r y e a r s fo r w o r k i n g c a p i ta l a n d s e v e n y e a r s fo r c a p it a l e q u i p m e n t a m o n g o t h e r criteria. M C E P is n o t a v a i la b l e f o r s ta r t u p c o m p a n i e s , M C E P i s o n l y a p p lic a b l e t o m a n u f a c t u r e r s u n d e r s t a n d a r d in d u s tr y c l a s s if ic a ti o n c o d e 3 … [ in t e r v e n e s ]. A D V K AT E H O F M E Y R : M M a i n g a n y a d o y o u m i n d i f w e ju s t s t o p t h e r e f o r a m o m e n t, I’ d ju s t l ik e t o g e t a l i t tl e b it m o r e c l a r i t y i n r e la t i o n Page 40 of 153 30 AUGUST 2019 – DAY 153 t o t h e w o r k in g c a p i t a l l o a n t h a t w a s a p p r o v e d f o r E M L E n e r g y t h a t w e ju s t l o o k e d a t . D i d I u n d e r s t a n d y o u c o r r e c tl y to s a y i t w a s a p p r o v e d u n d e r th is M C E P p r o g r a m m e , is t h a t r i g h t ? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : T h a t’s r i g h t . A n d i f w e c a n ju s t p a u s e a t th a t 4 % f i x e d in t e r e s t r a t e , is t h a t a p r e f e r e n t ia l r a t e ? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : It is. W h a t w o u l d t h e o r d i n a r y r a t e b e i f y o u d id n ’ t q u a li fy f o r M C E P f u n d i n g ? 10 M R M A R K P H A K A M I L E M A I N G A N YA : S o t h is c l ie n t w a s p r ic e d a t p r i m e p lu s t h r e e . A D V K AT E H O F M E Y R : R i g h t a n d th a t w a s th e i n t e r e s t r a t e o n t h e p l a n t i n g e q u ip m e n t l o a n w a s i t n o t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t ’s c o r r e c t – n o , n o i t w a s 4 % b u t i f t h e r e w a s n o M C E P i t w o u l d h a v e b e e n p r i m e p l u s th r e e . A D V K AT E H O F M E Y R : N o I w a s t a l k i n g a b o u t th e p l a n t i n g e q u i p m e n t lo a n , t h e s e c o n d l o a n w a s p r ic e d – t h e s u b o r d in a t e d lo a n a t p r i m e p lu s 3 % w a s n ’ t it ? M R M A R K P H A K A M I L E M A I N G A N YA : 20 No it was not it was priced at 13.8%. A D V K AT E H O F M E Y R : R i g h t w h a t w a s th a t p r i m e p l u s w h a t a t t h e ti m e ? M R M A R K P H A K A M I L E M A I N G A N YA : N o t h is is a d i ff e r e n t – th is i s a r e a l a f t e r t a x r e t u r n i t ’s n o t li n k e d t o p r i m e . A D V K AT E H O F M E Y R : Oh I see so where is the prime plus 3%, Page 41 of 153 30 AUGUST 2019 – DAY 153 w h e r e d o e s t h a t c o m e fr o m ? M R M A R K P H A K A M I L E M A I N G A N YA : S o f o r e v e r y f a c il it y w h e th e r it q u a li fi e s fo r M C E P o r n o t, w e c a l c u la t e w h a t t h e ID C p r ic in g w o u l d h a v e b e e n h a d i t n o t q u a li fi e d . S o f o r t h is c li e n t i t w o u l d h a v e b e e n p r i m e p lu s 3 % . A D V K AT E H O F M E Y R : Thank you, so at the time, 2017, do you recall what prime was? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : 10 N o I d o n ’ t C h a ir. If I said to you it was around 10% would that s o u n d r ig h t ? M R M A R K P H A K A M I L E M A I N G A N YA : S o i t’s in th e s c h e d u l e th a t w e [i n d is t in c t] y e s C h a ir, a r o u n d 1 0 % . A D V K AT E H O F M E Y R : T h a n k y o u s o t h a t m e a n s y o u ’r e c o m p a r i n g a d i ff e r e n c e o f a b o u t – o f 4 % w i th 1 3 % c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : T h a t’s c o r r e c t . T h a n k y o u , t h e n if w e c a n g o o n b e c a u s e y o u w e r e g o i n g t o d e a l w i t h t h e c r it e r i a , s o a s I u n d e r s t a n d y o u r e v i d e n c e M C E P i s s o m e th in g th a t y o u m u s t q u a li f y f o r t o g e t t h is p r e f e r e n t ia l r a te is th a t c o r r e c t ? 20 M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : T h a t’s c o r r e c t . A n d t h e n th e r e a r e q u a li f y i n g c r i t e r i a , is t h a t r ig h t ? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : Ye s . A n d t h e f ir s t o f t h o s e y o u in d ic a t e d a t t h e b o t t o m o f p a g e t w o w h a t is th a t? Page 42 of 153 30 AUGUST 2019 – DAY 153 M R M A R K P H A K A M I L E M A I N G A N YA : It says, “ O n ly a p p l ic a b le t o m a n u f a c t u r e r s u n d e r s t a n d a r d i n d u s tr y c o d e c l a s s i fic a ti o n c o d e 3 ” . A D V K AT E H O F M E Y R : Th a n k y o u c a n I a s k y o u w h a t y o u r u n d e r s t a n d in g o f s t a n d a r d i n d u s tr i a l c l a s s i fi c a t io n c o d e 3 is ? M R M A R K P H A K A M I L E M A I N G A N YA : So the MCEP programme has v a r io u s c o d e s , s o t h is s h o u l d a c t u a ll y b e l e v e l 3 , s o l e v e l 3 w il l h a v e m a n y s u b - c a t e g o r i e s u n d e r i t a c c o r d in g – c la s s if y i n g i t i n d u s tr y a c c o r d i n g t o w h e r e i t c o m e s fr o m , i f i t’s u n d e r 3 t h e r e w i ll b e v a r i o u s 10 in d u s tr i e s f a l li n g u n d e r 3 . A D V K AT E H O F M E Y R : S o j u s t – w h a t i s a s ta n d a r d i n d u s tr i a l c la s s if ic a ti o n c o d e , w h e r e d o e s t h a t c o m e fr o m ? M R M A R K P H A K A M I L E M A I N G A N YA : I s t a n d u n d e r c o r r e c ti o n b u t I t h i n k th is i s a u n iv e r s a lly u s e d i n d u s tr y c l a s s i fi c a t io n c o d e . A D V K AT E H O F M E Y R : I f I c o u l d t a k e y o u to – i n t h a t s a m e b u n d l e p a g e 3 7 .1 y o u ’l l f in d i t j u s t b e f o r e M r R a m a ’s a ffi d a v it c o m m e n c e s , th is is a S A R S d o c u m e n t r e fl e c t in g s t a n d a r d i n d u s tr i a l c la s s i f ic a ti o n c o d e s , is t h a t w h a t M C E P is r e f e r r in g t o w h e n i t t a lk s a b o u t s ta n d a r d i n d u s t r i a l c la s s if ic a ti o n c o d e s ? 20 M R M A R K P H A K A M I L E M A I N G A N YA : I t h i n k s o , b u t M C E P h a s i ts o w n c o d e s , h a s i ts o w n c la s s i f ic a t i o n w h i c h a r e n o t g r o u p e d a c c o r d i n g to this one. A D V K AT E H O F M E Y R : Do you know that as a fact? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : Ye s I’ v e g o t t h e m h e r e . O h w e h a v e n ’t s e e n t h o s e s o m a y b e w h a t y o u Page 43 of 153 30 AUGUST 2019 – DAY 153 w o u ld n e e d t o d o is a s s is t u s o v e r th e t e a b r e a k t o m a k e t h o s e a v a i la b le t o u s . M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : O k a y. W h a t t h e n , u n ti l t o d a y w e h a d u n d e r s t o o d t h e s e to b e t h e s t a n d a r d i n d u s t r i a l c la s s i fi c a t io n c o d e s t h e o n e s t h a t y o u s e e a t 3 7 .1 , w h a t is c o d e 3 u n d e r t h e s ta n d a r d i n d u s tr i a l c la s s if ic a ti o n c o d e th a t y o u u n d e r s t a n d t o b e t h e M C E P c o d e ? M R M A R K P H A K A M I L E M A I N G A N YA : S o t h e o n e I’ v e g o t h e r e , it s a y s t h e D T I, S I C c o d e s M a n u f a c t u r i n g C o m p e t i ti v e n e s s E n h a n c e m e n t 10 p r o g r a m m e M C E P, t h e n i t l is ts s t a n d a r d i n d u s tr y c o d e l e v e l 3 a n d th e n u n d e r l e v e l 3 it li s t s v a r i o u s i n d u s tr i e s s t a r ti n g fr o m 3 0 1 a l l t h e w a y t o 395. A D V K AT E H O F M E Y R : Mr M a in g a n y a I h a v e n o t s e e n t h a t b e f o r e s o I w o u ld l ik e t o t a k e a l o o k a t i t o v e r t h e b r e a k a n d t h e n w e c a n c o m e b a c k to t h i s p o i n t i f w e m a y i n y o u r e v id e n c e . M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : the top b u ll e t of O k a y. I f w e g o o v e r to p a g e t h r e e w h e r e y o u w e r e a t your a ffi d a v i t , you give the o th e r q u a l i fy i n g r e q u ir e m e n t s w h ic h a r e n o t p e r ti n e n t f o r o u r p u r p o s e s b u t a t b ) y o u t e l l 20 u s th a t t h e E M L a p p li c a t io n w a s p r e - a s s e s s e d to h a v e m e t th e M C E P r e q u ir e m e n t s , is t h a t c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : Who did that assessment? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : T h a t’s c o r r e c t . I t w a s d o n e b y M r Bi ll y C o b i n a . A n d w h a t w a s h e – w h a t w a s t h e b a s is h e g a v e Page 44 of 153 30 AUGUST 2019 – DAY 153 f o r i d e n ti f y i n g i t a s h a v i n g q u a l i fi e d f o r M C E P f u n d i n g ? M R M A R K P H A K A M I L E M A I N G A N YA : S o i n p a r a g r a p h c ) I s a y, “ S u b s e q u e n t t o my m e e ti n g w it h th e C o m m is s i o n ’s le g a l te a m a b o v e a n d f o r p u r p o s e s o f p r e p a r in g t h i s a ffi d a v it , I r e c e iv e d – I in t e r v ie w e d th e I D C ’s M r B il ly C o b i n a w h o p r e - a s s e s s e d t h e E M L tr a n s a c ti o n t o d e t e r m i n e w h e th e r i t q u a li f ie s fo r M C E P. He indicated that he approved and recommended the tr a n s a c ti o n f o r M C E P o n t h e u n d e r s t a n d i n g th a t E M L w i ll , a s p a r t o f i t ’s o p e r a ti o n s , b e i n v o lv e d in b l e n d in g a n d v a lu e 10 a d d in g o n s o m e o f i t ’s p r o d u c ts ” . A D V K AT E H O F M E Y R : T h a n k y o u , I d o n ’ t w a n t t o j u m p to 2 0 1 8 y e t i f w e m a y t h a t ’s w h y I ’v e s t o p p e d y o u t h e r e b e c a u s e I j u s t w a n t t o s ta y f a i t h f u l t o t h e c h r o n o l o g y a t th is p o in t . T h is f a c t t h a t i t h a d b e e n q u a li fi e d f o r M C E P f u n d i n g w a s r e fe r r e d t o i n t h e s u b m is s io n t h a t w a s m a d e to t h e C o m m i t te e t h a t t o o k i ts d e c is i o n o n t h e 6 t h o f F e b r u a r y 2 0 1 7 a n d s o I’ d l ik e t o t a k e y o u t o t h a t d o c u m e n t s o th a t w e c o u ld e x p l o r e i t a b i t i f w e m a y. Yo u ’ll fi n d i t in D D 1 3 C , s o i t ’s o n e o f t h e fi le s o n y o u r le f t- h a n d s id e a n d w e ’r e lo o k in g t h e r e a t p a g e 5 5 4 w h ic h is r i g h t a t th e b e g i n n i n g , w h a t is th a t d o c u m e n t Mr M a in g a n y a ? 20 M R M A R K P H A K A M I L E M A I N G A N YA : S o t h is is a s u b m i s s i o n t o t h e s p e c i a l Tr e a s u r y C o m m i t t e e . A D V K AT E H O F M E Y R : Is t h a t t h e C o m m i t te e th a t m a d e t h e d e c is i o n on the 6th of February? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : Thanks correct. A n d in t h e s c h e m e o f th e p r o c e s s e s o f t h e Page 45 of 153 30 AUGUST 2019 – DAY 153 I D C w h a t i s t h is d o c u m e n t ? M R M A R K P H A K A M I L E M A I N G A N YA : S o t h i s d o c u m e n t i s a b a s is o n w h ic h fu n d i n g d e c is io n i s m a d e i t c o n t a i n s t h e r e q u ir e m e n t o f th e c li e n t , i t te lls w h a t f a c il i ti e s a r e r e q u i r e d , i t d e s c r ib e s t h e b u s in e s s , w h a t i t ’s g o i n g t o d o , i t d e s c r i b e s th e i n d u s tr y, i t s u m m a r is e s th e d u e d i li g e n c e t h a t w a s d o n e a n d b a s e d o n t h a t i t r e c o m m e n d s t o t h e C o m m i t t e e th a t th e fa c i li ti e s b e a p p r o v e d . A D V K AT E H O F M E Y R : T h a n k y o u , I’ d li k e t o p i c k u p a f e w a s p e c ts o f t h is s u b mi s s io n b e c a u s e t h e y w i ll b e r e l e v a n t t o t h e fu r t h e r e v i d e n c e 10 t h a t th a t y o u g i v e a n d i t c o u l d t h e n a s k y o u t o g o t o p a g e 5 5 7 in t h a t document. T h e t h i r d p a r a g r a p h o n th a t p a g e d e a ls w i t h t h e f u e l f a r m t h a t E M L E n e r g y h a d , c a n y o u t e ll u s a b o u t th a t ? M R M A R K P H A K A M I L E M A I N G A N YA : So i t w a s i n d ic a t e d i n t h e s u b m is s io n t h a t D e n e l h a d d o n a t e d a f u e l f a r m t o th e c li e n t, t h a t is t h e p r e m is e s o n w h ic h th e c li e n t w a s c o n d u c ti n g i ts b u s i n e s s . A D V K AT E H O F M E Y R : T h a n k y o u a n d i n t h i s p a r a g r a p h th e c o m p i le s o f th is s u b m i s s i o n a r e d e a li n g w i t h t h e v a l u a t io n t h a t w a s g i v e n t o t h a t f u e l f a r m , c a n y o u t e ll u s a b o u t w h a t i s r e c o r d e d th e r e ? M R M A R K P H A K A M I L E M A I N G A N YA : 20 So it says, “ E M L h a d l a te r r e v a l u e d t h e ir a s s e ts u s in g a n i n d e p e n d e n t v a l u e r t o [ in d is ti n c t ] R 1 4 . 3 m i lli o n , h o w e v e r t h e a s s e ts w e r e v a l u e d b y t h e I D C ’s e v a lu a t io n s d e p a r t m e n t a t R 7 . 4 m il li o n ” . A D V K AT E H O F M E Y R : T h a n k y o u w e ’ ll p ic k t h a t u p la t e r b u t j u s t s o t h a t I c a n u n d e r s t a n d d o e s th a t m e a n E M L in i ts b o o k s h a d g i v e n i t a p a r t ic u l a r v a lu e b u t w h e n t h e ID C d i d i t s d u e d il ig e n c e i t g a v e i t a Page 46 of 153 30 AUGUST 2019 – DAY 153 d i ff e r e n t v a lu e – a l o w e r v a l u e ? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : T h a t’s c o r r e c t . T h a n k y o u . I f w e th e n g o t o 5 5 9 t h e s e c o n d p a r a g r a p h t h e r e ta lk s a b o u t t h e t e n d e r t h a t E M L h a d b e e n i n v o lv e d in t o s u p p l y j e t f u e l to S A A , i s th a t c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : T h a t’s c o r r e c t . A n d w h a t i s r e c o r d e d i n th a t s e c o n d paragraph about that tender? M R M A R K P H A K A M I L E M A I N G A N YA : 10 “ I t h a s b e e n e s t a b lis h e d t h a t t h e r e a r e th r e e fi n a l is ts f o r t h e t e n d e r, th e b u d g e ts h a v e b e e n s e t- u p i n a m a n n e r w h e r e i t h a s b e e n a s s u m e d t h a t E M L w i ll b e a w a r d e d a th ir d o f t h e f u ll te n d e r a s p e r d i s c u s s i o n s w it h S A A t o r e m a i n p r u d e n t w i t h i n t h e b u d g e t a s th e a l lo c a t io n o f the tender has not yet been provided should a larger amount of t h e t e n d e r b e a w a r d e d th is w i ll i n c r e a s e s a l e s a n d n e t t p r o f i t f u r th e r ” . A D V K AT E H O F M E Y R : T h a n k y o u , C h a i r I n o t e th a t w e h a v e j u s t g o n e p a s t q u a r te r p a s t , i t m a y b e a n a p p r o p r ia t e ti m e t o t a k e th e b r e a k . CHAIRPERSON: 20 Ye s l e t ’s t a k e t h e b r e a k b u t w e ’l l t a k e a r a t h e r lo n g e r t e a b r e a k to d a y le t ’s r e s u m e a t q u a r t e r to t w e lv e , I j u s t n e e d t o a tt e n d t o s o m e t h in g . A D V K AT E H O F M E Y R : T h a n k y o u C h a ir w e ll i t w i ll a ls o f a c il i ta t e u s lo o k in g a t t h e d o c u m e n t , t h a n k y o u s o m u c h . CHAIRPERSON: REGISTRAR: Ye s , w e a d j o u r n . A l l r is e . Page 47 of 153 30 AUGUST 2019 – DAY 153 INQUIRY ADJOURNS INQUIRY RESUMES CHAIRPERSON: Okay let us proceed. A D V K AT E H O F M E Y R : T h a n k y o u C h a ir. Mr Mainganya we were on p a g e 5 5 9 o f b u n d l e D D 1 3 c w h e n w e b r o k e f o r th e b r e a k . And I was a s k in g t h e r e a b o u t t h e s e c o n d p a r a g r a p h o n t h a t p a g e w h e r e it i s r e c o r d e d th a t i n t h e s u b m is s i o n t o t h e c r e d i t – t h e c o m m i t t e e t h a t w a s d e c i d i n g th is a p p lic a t io n th a t it h a d b e e n e s ta b l is h e d t h a t t h e r e a r e t h r e e fi n a l is ts fo r t h e t e n d e r. T h a t is a r e f e r e n c e t o t h e S A A t e n d e r, i s 10 that correct? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s th a t i s c o r r e c t. A D V K AT E H O F M E Y R : A n d t h e n w h a t is y o u r u n d e r s ta n d i n g o f w h a t e ls e is r e c o r d e d t h e r e a b o u t t h e s t a g e i n t h a t te n d e r t h a t E M L w a s a t a t t h e ti m e t h a t t h i s f u n d i n g d e c i s i o n w a s ta k e n ? M R M A R K P H A K A M I L E M A I N G A N YA : S o r r y t h e q u e s ti o n is ? A D V K AT E H O F M E Y R : Th e s u b m is s io n i n d ic a te s t h a t t h e t e n d e r p r o c e s s h a d n o t y e t b e e n f in a lis e d , is t h a t y o u r u n d e r s t a n d i n g o f it ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : 20 W h a t d o e s i t i n d ic a t e w a s th e s ta g e o f t h e t e n d e r p r o c e s s t h a t h a d b e e n a c h i e v e d b y t h e t i m e t h is s u b m i s s i o n w a s made? M R M A R K P H A K A M I L E M A I N G A N YA : So the tender had not been a p p r o v e d a t th a t s t a g e i t w a s s ti ll a d j u d ic a ti o n . A D V K AT E H O F M E Y R : I n d e e d b u t i t d o e s g o o n t o s a y t h e b u d g e ts h a v e b e e n s e t u p in a m a n n e r w h e r e i t h a s b e e n a s s u m e d t h a t E M L w i ll Page 48 of 153 30 AUGUST 2019 – DAY 153 b e a w a r d e d a th ir d o f th e fu ll te n d e r a s p e r d is c u s s i o n s w i th S A A . L e t u s j u s t s to p t h e r e . If a t e n d e r p r o c e s s h a d n o t b e e n c o m p le t e d h o w c o u l d it b e t h a t a n y r e li a n c e w a s g o in g t o b e p l a c e d o n w h a t v o l u m e s E M L w o u ld b e a w a r d e d ? M R M A R K P H A K A M I L E M A I N G A N YA : S o in t h e s u b m i s s i o n th e t e a m s a y s t h e y i n d o i n g t h e ir m a r k e t in g d u e d i l ig e n c e t h e y i n t e r v ie w e d S A A and SAA at that stage informed them th ree bidders had been short lis t e d a n d o n e o f th e m w a s E M L . A n d t h e y a ls o i n fo r m e d t h e m t h a t m a y b e t h e a ll o c a ti o n w o u ld b e e q u a lly a m o n g th e t h r e e . S o t h e t e a m 10 h a d t o m a k e a s s u m p ti o n s i n d o in g th e ir f i n a n c i a l m o d e l th e r e f o r e t h e y t o o k t h e 2 0 % o f li tr e s t h a t w a s e a r m a r k e d f o r B B B E s u p p li e r s a n d d iv i d e d i t e q u a lly a m o n g t h e t h r e e s h o r t li s t e d b i d d e r s S & S D i m e n s i o n t o d o t h e fi n a n c i a l m o d e l . A D V K AT E H O F M E Y R : Is t h a t a c u s to m a r y a p p r o a c h f o r t h e I D C t h a t i t w o u ld a s s e s s a n a p p l ic a ti o n p r i o r t o th e t e n d e r in f a c t b e in g a w a r d e d ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s s o m e ti m e s i t d o e s h a p p e n t h a t w h e n a c l ie n t c o m e s i t is s t ill b i d d i n g b u t t h e t e n d e r r e q u i r e m e n ts f o r e x a m p le w o u ld b e s u c h t h a t w h e n i t is a w a r d e d i t n e e d t o b u y c e r t a i n e q u ip m e n t . T h e r e fo r e c l ie n ts w o u l d c o m e t o u s a n d s a y I h a v e 20 b i d f o r t h i s th i n g t h e r e q u ir e m e n ts t h a t I w ill n e e d w o r k i n g c a p i t a l . T h e r e q u ir e m e n t s th a t I w il l n e e d t o p r o v e th a t I h a v e fi n a n c i a l m e a n s t o b u y i n t h is c a s e th e j e t f u e l f r o m t h e s u p p li e r s . Therefore we would a d j u d ic a te t h a t b u t a s a c o n d i ti o n o f o u r a p p r o v a l w o u l d b e t h a t t h e d is b u r s e m e n ts o r t h e f a c il i ti e s c a n o n l y b e d o n e o n c e c o n fir m a t i o n o f t h e t e n d e r h a s b e e n a w a r d e d s o it d o e s h a p p e n . Page 49 of 153 30 AUGUST 2019 – DAY 153 A D V K AT E H O F M E Y R : A n d j u s t i n te r m s o f h o w y o u a s s e s s th e v ia b il it y o f t h e a p p l ic a ti o n is i t c u s t o m a r y t o r e l y o n r e p r e s e n t a ti o n s fr o m a s ta t e o w n e d e n t it y a b o u t h o w m u c h i s g o i n g t o b e a ll o c a t e d t o a p a r t ic u l a r b i d d e r ? M R M A R K P H A K A M I L E M A I N G A N YA : S o i n c o n d u c ti n g t h e m a r k e t in g d u e d i li g e n c e t h e te a m i n d ic a te s th a t i t w a n t e d to v e r i fy t h e a s s e r ti o n s t h a t th e c li e n t h a d m a d e . S o t h e c li e n t h a d s a i d I h a v e p u t a b i d fo r t h is t e n d e r a t S A A t h e r e f o r e a s p a r t o f D D t h e c li e n t w a n t e d t o v e r if y t h a t a n d a s c e r t a i n t h e fu e l r e q u ir e m e n t s f r o m S A A a n d a s c e r ta i n w h a t 10 t h e c li e n t w a s s a y i n g w i t h r e g a r d s t o t h e a l lo c a ti o n fo r B E E s u p p l ie r s . A D V K AT E H O F M E Y R : B u t … C H A I R P E R S O N : I a m s o r r y. Pl e a s e j u s t t r y w h a t y o u tr ie d e a r li e r o n w h e n w e c o u l d h e a r y o u q u i t e w e ll . M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. C H A I R P E R S O N : J u s t tr y t h a t a g a i n . M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. C H A I R P E R S O N : O k a y b u t i t is f in e y o u c a n c o n ti n u e y o u d o n o t h a v e t o g o b a c k t o th e a n s w e r y o u h a v e g iv e n . M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. 20 A D V K AT E H O F M E Y R : T h a n k y o u C h a ir. Mr M a in g a n y a d o y o u k n o w w h o y o u r – w e ll t h e d u e d i li g e n c e t e a m o f t h e ID C d e a l t w i t h a t S A A o n t h is q u e s t i o n ? M R M A R K P H A K A M I L E M A I N G A N YA : S o i n Vi m a l ’s a ff id a v i t h e d o e s in d i c a t e I j u s t c a n n o t r e c a ll t h e n a m e n o w. A D V K AT E H O F M E Y R : I t h i n k it w a s Mr S o q w e z e l e . Page 50 of 153 30 AUGUST 2019 – DAY 153 M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : I s – d o e s t h a t r i n g a b e l l ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s i t d o e s r i n g a b e ll j a . A D V K AT E H O F M E Y R : A n d d o y o u k n o w w h a t p o s i ti o n h e h e ld in S A A ? M R M A R K P H A K A M I L E M A I N G A N YA : N o I d o n o t . A D V K AT E H O F M E Y R : D o e s – is i t a n y c a u s e f o r c o n c e r n f o r y o u t h a t r e l i a n c e w a s b e i n g p l a c e d o n a p a r ti c u la r a l lo c a t io n o f th e 2 0 % t o E M L in c ir c u m s t a n c e s w h e r e t h e a p p r o v a l p r o c e s s e s w it h in S A A h a d n o t y e t been completed? 10 M R M A R K P H A K A M I L E M A I N G A N YA : Ye s i n o u r r is k r e p o r t w e d id r a i s e t h a t r is k th a t th e r e i s a r is k th a t th is t e n d e r m i g h t n o t b e a p p r o v e d . S o it w a s a c o n c e r n . A D V K AT E H O F M E Y R : W e l l I a m i n te r e s t e d i n a s l ig h tl y d i ffe r e n t t h in g . I k n o w t h a t y o u i d e n t if i e d a r i s k a n d y o u a l s o i d e n ti f ie d a r is k i n r e l a ti o n t o h o w l o n g t h e te n d e r w a s g o i n g t o b e a w a r d e d f o r b u t t h is is a s li g h tly d i ff e r e n t t h in g . T h i s is t h e I D C g o i n g to a p e r s o n w i th i n S A A a n d s a y in g h o w m u c h is th is te n d e r e r g o i n g t o b e a w a r d e d s o t h a t w e c a n d o o u r c a s h fl o w fo r e c a s t s o n t h e b u s i n e s s . I s t h a t c u s to m a r y ? M R M A R K P H A K A M I L E M A I N G A N YA : S o w h a t is c u s t o m a r y is t o v e r if y 20 t h e a s s e r t i o n s m a d e b y th e c l ie n t . I d o n o t k n o w t o w h a t e x t e n t i n t h is c a s e th e c li e n t r e v e a l e d t h e te n d e r p r o c e s s e s . S o in h i s a ff id a v i t h e in d i c a t e s t h a t b e f o r e t h e c li e n t c o u l d ta lk i t w a s r e q u ir e d th a t a n o n d is c l o s u r e a g r e e m e n t b e s i g n e d . A D V K AT E H O F M E Y R : S o r r y w h o is h e ? M R M A R K P H A K A M I L E M A I N G A N YA : Vi m a l . Page 51 of 153 30 AUGUST 2019 – DAY 153 A D V K AT E H O F M E Y R : Mr R a m a ? M R M A R K P H A K A M I L E M A I N G A N YA : d is c l o s u r e agreement be s ig n e d so Ye s M r R a m a t h a t a n o n that c o n f id e n t i a l i n f o r m a t io n r e g a r d in g th is p r o c e s s m a y n o t b e d is c l o s e d . A D V K AT E H O F M E Y R : And that was a non-disclosure agreement b e t w e e n S A A a n d ID C ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : I s t h a t r i g h t ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . 10 A D V K AT E H O F M E Y R : B e c a u s e c e r t a i n l y th e c l ie n t c o u l d n o t k n o w a n y th in g a b o u t t h a t p r o c e s s , c o u l d i t ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : A n d t h e n y o u g o – w e l l th e r e y o u – s u b m is s i o n goes on in the last sentence on page 559 to say: “ S h o u l d a l a r g e r a m o u n t o f th e te n d e r b e a w a r d e d t h is w i ll in c r e a s e s a le s a n d n e tt p r o fi t fu r t h e r. ” Do you see that? M R M A R K P H A K A M I L E M A I N G A N YA : J a . A D V K AT E H O F M E Y R : 20 T h a t m e a n s i t w o u l d b e b e t t e r fo r E M L r a t h e r than worse, correct? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : C o u ld it n o t a l s o b e th a t a s m a l le r a m o u n t o f the tender could be awarded/ M R M A R K P H A K A M I L E M A I N G A N YA : I t c o u l d . A D V K AT E H O F M E Y R : B u t t h a t is n o t r e fl e c t e d h e r e is i t ? Page 52 of 153 30 AUGUST 2019 – DAY 153 M R M A R K P H A K A M I L E M A I N G A N YA : N o . A D V K AT E H O F M E Y R : I f w e c a n th e n g o t o p a g e 5 6 4 . W h e n th e d e c is i o n t o a p p r o v e t h e fu n d i n g w a s m a d e o n t h e 6 F e b r u a r y 2 0 1 7 t h e r e w e r e c e r ta in c o n d it i o n s p r e c e d e n t t h a t a p p l ie d t o t h a t f u n d i n g , is t h a t correct? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : A n d th e o n e I a m i n t e r e s t e d i n w e c a n p ic k u p a t th e b o t to m o f p a g e 5 6 4 . C a n y o u t e ll u s w h a t t h o s e c o n d i ti o n s p r e c e d e n t r e la t e to in t h e la s t b lo c k o f t h a t p a g e ? 10 M R M A R K P H A K A M I L E M A I N G A N YA : S o c o n d i ti o n n u m b e r 1 … A D V K AT E H O F M E Y R : W e ll b e f o r e w e g e t t h e r e w h a t a r e t h e y c o n d i ti o n s p r e c e d e n t f o r ? M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. A D V K AT E H O F M E Y R : T h a t i s t h e u n d e r l i n e d s e c o n d li n e . M R M A R K P H A K A M I L E M A I N G A N YA : O k a y s o y o u w o u ld r e m e m b e r t h r e e f a c i li t ie s w e r e a p p r o v e d w h ic h i s t h e w o r k i n g c a p i t a l f a c il it y, t h e s u b o r d in a t e d l o a n f a c il it y f o r e q u i p m e n t a n d t h e g u a r a n te e s . S o t h e s e c o n d i ti o n s f o r t h e l o a n f o r t h e s u b o r d i n a t e d lo a n a n d f o r t h e g u a r a n te e . S o t h e r e a r e c o n d i t io n s p r e c e d e n t fo r a l l t h e fa c il i ti e s t h a t w e r e 20 approved. A D V K AT E H O F M E Y R : T h a n k y o u . A n d if w e c o u l d j u s t f o c u s o n t h e second one. M R M A R K P H A K A M I L E M A I N G A N YA : So the second one says there m u s t b e a s ig n e d o ff t a k e a g r e e m e n t b e tw e e n E M L E n g in e e r s a n d C o n s tr u c t i o n and S o u th A fr ic a n A ir w a y s Page 53 of 153 with th e te r ms to IDC 30 AUGUST 2019 – DAY 153 s a ti s f a c t io n . A D V K AT E H O F M E Y R : W h y d o y o u u n d e r s t a n d t h a t w a s p u t i n ? CHAIRPERSON: I a m s o r r y I t h o u g h t – I t h o u g h t I u n d e r s to o d w h e r e y o u w e r e . I t h o u g h t it w a s th e l a s t b l o c k a t p a g e 5 6 4 . A D V K AT E H O F M E Y R : C o r r e c t C h a ir w e w e r e a t p o in t 2 in t h a t l a s t block. C H A I R P E R S O N : O h o k a y. A D V K AT E H O F M E Y R : T h a n k y o u . A n d t h a t r e l a t e d to t h e r e q u ir e m e n t t h a t t h e r e b e a s i g n e d o ff t a k e a g r e e m e n t b e t w e e n E M L a n d S A A w i t h 10 t e r m s t o t h e I D C ’s s a tis f a c ti o n ? A n d M R M a in g a n y e I w a s ju s t a s k i n g y o u w h a t is y o u r u n d e r s t a n d i n g fo r w h y th a t w a s in c l u d e d ? M R M A R K P H A K A M I L E M A I N G A N YA : I t i s b e c a u s e i t is a k e y b a s is o n w h ic h th e fu n d i n g a p p l ic a t i o n w a s m a d e . A D V K AT E H O F M E Y R : W h a t – w h a t r is k is s o u g h t t o b e p r o te c t e d there for the IDC? M R M A R K P H A K A M I L E M A I N G A N YA : S o i t is t h e r is k y o u h a v e j u s t r a i s e d th a t i t m a y h a p p e n t h a t t h e c li e n t is a w a r d e d fe w e r l i tr e s t h a n t h e o n e th a t a r e m o d e ll e d w h i c h w o u ld m e a n b a s e d o n t h o s e l it r e s t h e c li e n t c a n n o t a ff o r d t o r e p a y t h e f a c il i ti e s . S o ID C n e e d e d t o b e h a p p y 20 w i t h t h e a l lo c a t i o n th a t t h e c li e n t h a d g o t b e f o r e i t c o u l d p r o c e e d w i t h t h e tr a n s a c ti o n . A D V K AT E H O F M E Y R : S o i s it fa ir t o s a y w h a t e v e r te r ms w e r e a r r i v e d a t w e r e i m p o r t a n t f o r t h e I D C to in t e r r o g a t e ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : T h e n i f w e c a n g o o v e r t o p a g e 5 7 0 a n d t h i s is Page 54 of 153 30 AUGUST 2019 – DAY 153 t h e p o i n t – t h is is th e d o c u m e n t t h a t r e fl e c ts t h e p o i n t t h a t y o u m a d e e a r l ie r a b o u t t h e r is k c o m m i t t e e h a v i n g i d e n t i fi e d a c o n c e r n i n r e la t io n t o t h e t e n d e r. J u s t t o h e lp u s r e m in d u s i n t h e p r o c e s s e s w h e n d o e s t h is r is k c o m m i t t e e g e t i n v o l v e d ? M R M A R K P H A K A M I L E M A I N G A N YA : No, no remember I indicated t h a t w h e n t h e s u b m i s s i o n h a s b e e n c o m p i le d b y t h e b u s i n e s s u n it i t is t h e n s e n t to t h e r is k d e p a r t m e n t t o a s s e s s t h e a p p l ic a ti o n . T h e n th e r is k d e p a r t m e n t w r i te s a r e p o r t o f t h a t a s s e s s m e n t a n d i t a t t a c h e s t o t h e s u b m is s i o n t o t h e c r e d i t c o m m i t te e . 10 A D V K AT E H O F M E Y R : I n d e e d . M R M A R K P H A K A M I L E M A I N G A N YA : S o t h i s i s th e r is k r e p o r t p r o d u c e d b y [ in d is ti n c t ] . A D V K AT E H O F M E Y R : Th a n k y o u M r M a i n g a n y a t h a t is e x a c tly a s I understood it and I am indebted to your explanation for it. So the c o m m i t t e e t h a t is d e c i d i n g w h e th e r to a p p r o v e th is fu n d i n g is n o t o n ly g e t t in g t h e s u b m is s i o n p r e p a r e d b y th e le a d e r o f t h e p a r t ic u l a r u n it w h e r e t h e a n a ly s is h a s b e e n d o n e b u t t h e y a ls o a r e g e t ti n g t h e r i s k d e p a r t m e n t’s a p p r a is a l o f t h a t s u b m i s s i o n , c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . 20 A D V K AT E H O F M E Y R : A n d i f w e c o u l d t h e n l o o k a t t h e f ir s t h e a d in g o n t h a t p a g e w h ic h is e n t i tl e d M a t e r i a l R i s k C o n s i d e r a ti o n s a n d i t is th e s e c o n d b u l le t t h e r e t h a t I a m i n t e r e s t e d i n w h ic h is h ig h l i g h t e d a s t h e m a t e r i a l r is k . W h a t w a s t h a t r is k ? M R M A R K P H A K A M I L E M A I N G A N YA : S o th e r i s k s a y s th e te n d e r w a s is s u e d fo r a p e r i o d o f t h r e e y e a r s h o w e v e r b a s e d o n d is c u s s i o n s w i th Page 55 of 153 30 AUGUST 2019 – DAY 153 S A A t h e t e n d e r m a y b e e x t e n d e d fo r f iv e y e a r s . Th e r i s k r e m a i n s t h a t t h e t e n d e r m a y n o t b e a w a r d e d f o r fiv e y e a r s r e s u l t in g in a m is m a t c h b e t w e e n t h e I D C l o a n te n d e r a n d th e a w a r d e d t e n d e r. Furthermore s h o u l d th e t e n d e r b e a w a r d e d f o r f iv e y e a r s i t m a y e x p o s e t h e ID C t o fi n a n c i a l lo s s a s th e te n d e r m a y b e c h a l le n g e d b y a n y o th e r b i d d e r a n d c o u l d b e r e n d e r e d u n e n fo r c e a b le i n te r m s o f th e P F M A . T h is w i ll expose the IDC. A D V K AT E H O F M E Y R : S o c a n I j u s t p a u s e th e r e ? Are we to u n d e r s t a n d fr o m t h a t t h a t t h e a s s e s s m e n t o f th e c o n tr a c t th a t w a s u s e d 10 – s h o u ld i t h a v e e v e n t u a t e d th a t w a s u s e d to a s s e s s th e fi n a n c i a l v ia b il it y o f E M L a s a r e c i p i e n t o f t h is fu n d in g w a s b a s e d o n a f iv e y e a r c o n tr a c t fr o m S A A ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , A D V K AT E H O F M E Y R : A n d t h a t is d e s p it e t h e f a c t t h a t i t w a s k n o w n t o t h e I D C t h a t t h e t e n d e r h a d o n ly b e e n a d v e r ti s e d fo r t h r e e y e a r s , is that correct? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : previous one. 20 A g a i n m y c o n c e r n is a s i m il a r o n e t o th e W h y w o u l d t h e I D C b e c o m f o r ta b le in a s s e s s i n g th e fi n a n c i a l v ia b i li t y o n th e b a s is o f a t e r m f o r t h e c o n tr a c t th a t h a d n o t b e e n t h e a d v e r t is e d t e r m ? M R M A R K P H A K A M I L E M A I N G A N YA : O k a y s o – s o a t t h i s s t a g e w h e n t h e d e c i s i o n is m a d e i t is n o t k n o w n h o w m a n y li tr e s a c li e n t h a s g o t a n d th e a ll o c a ti o n . S o – s o t h e m o d e l li n g i s b a s e d o n a f iv e y e a r p e r i o d s in c e th e f a c il i ti e s a r e f iv e y e a r s b u t t h e t e n d e r is fo r th r e e y e a r s s o Page 56 of 153 30 AUGUST 2019 – DAY 153 w h e n th e t e n d e r is e v e n t u a l ly a w a r d e d it w il l t h e n h a v e t h e e x a c t a l lo c a t io n o f – o f th e l i tr e s th a t a r e g iv e n t o t h e c l ie n t a n d b a s e d o n t h a t a ll o c a ti o n t h e n t h e I D C w o u ld d e t e r m i n e i f i t p r o c e e d s w i t h t h e f a c i li ty o r n o t . A D V K AT E H O F M E Y R : B u t w h y m o d e l o n f iv e y e a r s w h e n t o t h e k n o w l e d g e o f th e I D C t h e t e n d e r w a s o n l y f o r th r e e y e a r s ? M R M A R K P H A K A M I L E M A I N G A N YA : So – so remember the – the m a in f a c il i ti e s t h a t a r e g r a n t e d f o r – f o r p u r c h a s e o f f u e l i s th e g u a r a n te e . 10 S o – s o t h a t o n e is m o d e l le d f o r t w e lv e m o n t h s . s h o r t t e r m f a c il it y. T h e n th e r e a r e t w o o th e r fa c i li ti e s . w o r k i n g c a p i t a l , o n e is fo r e q u i p m e n t. It is a One is for N o w w h a t is n o r m a l is t h e e q u ip m e n t y o u w o u l d m o d e l i t a lo n g t h e l i fe t i m e o f t h e – o f th e e q u ip m e n t b e c a u s e t h o s e f a c i li t ie s a r e s e c u r e d b y t h e u n d e r l y i n g a s s e ts . S o t h o s e a r e th e [i n d is t in c t] t h a t w e r e ta k e n i n to a c c o u n t in doing that. A D V K AT E H O F M E Y R : A n d th e w o r k i n g c a p i t a l l o a n ? M R M A R K P H A K A M I L E M A I N G A N YA : T h e w o r k i n g c a p i ta l l o a n w a s f o r four years. S o in th e s u b m is s i o n t h e te a m i n d i c a t e s t h a t s h o u l d t h e ir c li e n t a l l o c a t i o n b e f o r t h r e e y e a r s t h e r e m a i n i n g f a c il i ty a t th a t p o in t i n 20 ti m e w o u l d b e m i n i m a l t h e r e f o r e t h e I D C t o o k a v i e w o n r is k o n t h a t – t h a t r e m a i n i n g f a c i li ti e s c o u ld b e s e r v i c e d b y o t h e r r e v e n u e s o th e r t h a n t h e S A A c o n t r a c t . B e c a u s e th e c li e n t w a s a lr e a d y t r a d i n g . A D V K AT E H O F M E Y R : W h e r e i s t h a t? C H A I R P E R S O N : Is t h a t s o m e t h i n g h e c o u l d c h e c k o v e r l u n c h ? A D V K AT E H O F M E Y R : P o s s ib ly. L e t u s d o t h a t C h a ir. Page 57 of 153 30 AUGUST 2019 – DAY 153 C H A I R P E R S O N : Ye s . A D V K AT E H O F M E Y R : I r a is e d i t M r M a i n g a n y a b e c a u s e I h a v e n o t f o u n d t h a t i n t h e s e d o c u m e n ts . M R M A R K P H A K A M I L E M A I N G A N YA : O k a y I w i ll g e t i t – I w il l g iv e it to you. A D V K AT E H O F M E Y R : S o i t w o u l d b e u s e f u l i f y o u c o u l d c h e c k t h a t f o r us. M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. A D V K AT E H O F M E Y R : A s s u m in g t h a t i t is n o t t h e r e t h o u g h t w o u l d i t 10 n o t b e m o r e p r u d e n t to m o d e l f o r t h e p u r p o s e s o f fi n a n c i a l v i a b il i ty a s s e s s m e n t o n t h e b a s is o f t h e k n o w n t e n d e r p e r io d . M R M A R K P H A K A M I L E M A I N G A N YA : Ye s id e a l ly w e s h o u l d m e r g e th e funding. A D V K AT E H O F M E Y R : H m . M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : A n d t h e n i f w e c a n g o o v e r t o 5 7 1 . Yo u w i ll s e e a t th e b o t to m t h e r e th e r e is a h e a d i n g Pr i c i n g , d o y o u s e e th a t ? Apologies 571. M R M A R K P H A K A M I L E M A I N G A N YA : J a . 20 A D V K AT E H O F M E Y R : S o t h e r e is a h e a d i n g a t t h e b o t to m p r ic i n g , d o you see that? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : A n d j u s t r e a d f o r u s t h e f ir s t b u ll e t t h e r e ? M R M A R K P H A K A M I L E M A I N G A N YA : S o w o r k i n g c a p it a l lo a n c l i e n t q u a l i fi e s u n d e r E M S E P a lt e r n a te p r i c i n g Page 58 of 153 30 AUGUST 2019 – DAY 153 e q u a l p r i m e p lu s 3 u s in g d e c is io n s [ in d i s ti n c t ] . A D V K AT E H O F M E Y R : T h a n k y o u a n d t h a t i s a r e c o r d a l o f y o u r e a r li e r t e s ti m o n y a s I h a d it . Yo u s a id i f t h e y h a d n o t q u a l i fi e d u n d e r E M S E P t h e n th e a l t e r n a ti v e p r ic i n g w o u l d h a v e b e e n p r i m e p lu s 3 c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. A D V K AT E H O F M E Y R : Th is in d ic a t i o n t h a t t h e c li e n t q u a l i fi e s u n d e r E M S E P, d o y o u s e e th a t ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : 10 D o y o u k n o w i f a n y w h e r e e l s e i n t h is s u b m is s io n i t w a s in d ic a t e d t o t h e d e c is io n m a k i n g c o m m i t t e e t h e b a s i s o n w h ic h it h a d b e e n d e t e r m in e d t h a t E M L E n e r g y w o u ld q u a l i fy u n d e r EMSEP? M R M A R K P H A K A M I L E M A I N G A N YA : N o I c a n o n ly t h i n k o f r e fe r e n c e t o v a l u e a d d in g p a r t . A D V K AT E H O F M E Y R : R i g h t. A n d i s y o u r r e c o l le c ti o n t h a t t h a t m a y b e s o m e w h e r e in t h i s s u b m is s i o n ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s . A D V K AT E H O F M E Y R : I u n d e r s t a n d m r M a in g a n y a f r o m y o u r a ff id a v i t t h a t a n d w e lo o k e d a t it ju s t b e fo r e w e w e n t t o th is d o c u m e n t t h a t w h e n 20 y o u w e n t to M r K o b e n a a f te r y o u r e n g a g e m e n t s w i t h t h e c o m m i s s i o n a n d y o u a s k e d h i m w h y h e h a d q u a li fi e d E M L f o r E M S E P f u n d in g h e t o l d y o u a n d I a m q u o ti n g h e r e fr o m p a g e 3 y o u d o n o t h a v e t o g o t h e r e f o r p r e s e n t p u r p o s e s b u t a s I r e a d i t h e r e h e s a id t o y o u . “ H e a p p r o v e d a n d r e c o m m e n d e d t h e tr a n s a c t io n f o r E M S E P o n t h e u n d e r s t a n d in g t h a t E M L w i ll a s p a r t o f Page 59 of 153 30 AUGUST 2019 – DAY 153 it s o p e r a t i o n s b e in v o lv e d i n b l e n d i n g a n d v a lu e a d d in g o n s o m e o f i ts p r o d u c t . ” Is t h a t w h a t h e t o l d y o u ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s th a t i s c o r r e c t. A D V K AT E H O F M E Y R : I f I te ll y o u t h a t I h a v e r e a d t h is s u b m is s i o n v e r y c lo s e ly i t d o e s n o t m e a n t h a t I d o s o a l w a y s w i th o u t e r r o r b u t I r e a d i t v e r y c lo s e ly a n d I h a v e n o t fo u n d a n y r e f e r e n c e to b l e n d i n g o r v a l u e a d d i n g i n i t , w o u l d th a t s u r p r is e y o u ? M R M A R K P H A K A M I L E M A I N G A N YA : 10 I t w o u l d n o t b u t th e r e w a s r e fe r e n c e to v a lu e a d d in g . A D V K AT E H O F M E Y R : T h e r e i s ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . C H A I R P E R S O N : C o u l d y o u t a k e m e t o th a t ? M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. C a n I r e fe r t o [ i n d is ti n c t – n o t s p e a k i n g in t o m ic r o p h o n e ] A D V K AT E H O F M E Y R : I n d e e d c e r ta in ly. I f w e c a n d o i t q u i c k ly th e n m a y b e w e d o s o n o w o t h e r w is e C h a ir w i t h y o u r le a v e w e c a n m a y b e p ic k t h e s e tw o a s p e c t s u p a f t e r th e b r e a k ? C H A I R P E R S O N : Ye s . Ye s , y e s . 20 A D V K AT E H O F M E Y R : J u s t s o t h a t w e d o n o t d e l a y o u r s e lv e s t o o much. CHAIRPERSON: Ja. Hm. A D V K AT E H O F M E Y R : Mr M a in g a n y a s h o u l d w e l e a v e i t fo r t h e b r e a k ? M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. A D V K AT E H O F M E Y R : W o u l d t h a t b e p r e f e r a b le . Page 60 of 153 30 AUGUST 2019 – DAY 153 M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. A D V K AT E H O F M E Y R : B u t ju s t s o I c a n u n d e r s t a n d w h e r e w e a r e . Yo u a g r e e w i th m e t h a t t h e r e is n o r e f e r e n c e to b l e n d i n g a n y w h e r e ? M R M A R K P H A K A M I L E M A I N G A N YA : J a . A D V K AT E H O F M E Y R : B u t y o u d o r e c a l l a r e fe r e n c e to v a lu e a d d . M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : A n d y o u w il l f in d t h a t f o r m e ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : T h a n k y o u s o m u c h . W e n o w s h o u l d g o t o th e 10 d o c u m e n t th a t y o u m a d e a v a i la b l e t o th e c o m m is s i o n o v e r t h e b r e a k . C h a ir w e h a v e m a n a g e d to m a k e a c o p y fo r y o u r s e l f . I f I m a y b e g l e a v e to hand that up? C H A I R P E R S O N : Ye s . A D V K AT E H O F M E Y R : C h a ir i t is a c o p y t h a t M r M a in g a n y a h a d w i th h i m a n d s o i t d o e s h a v e s o m e h a n d w r i t te n a n n o ta t io n s o f h i s . He is h a p p y f o r u s t o w o r k o ff t h is d o c u m e n t n o w n o t w i t h s t a n d i n g t h o s e a n n o ta t io n s b u t h e is g o i n g t o p r o v i d e u s w it h a c l e a n c o p y. C H A I R P E R S O N : O k a y. A D V K AT E H O F M E Y R : Fo r w h e n i t g o e s i n to t h e r e c o r d . 20 C H A I R P E R S O N : O k a y. A D V K AT E H O F M E Y R : C h a ir m y s u g g e s t io n i s t h a t w e s l o t i t i n a f t e r t h e c o d e s t h a t w e h a d t h o u g h t w e r e a p p lic a b l e a n d t h a t w o u l d m e a n p a g in a ti n g i t a t p a g e 3 7 . 3 . I f t h a t is s u i ta b le ? O t h e r w i s e w e c o u ld g iv e it a d i ff e r e n t e x h i b i t n u m b e r I a m i n y o u r h a n d s o n t h a t? C H A I R P E R S O N : L e t u s m a k e i t 3 7 . 3 i f y o u t h i n k t h a t w i ll – th a t s h o u l d Page 61 of 153 30 AUGUST 2019 – DAY 153 work? A D V K AT E H O F M E Y R : I t h in k i t w il l b e c a u s e th e n i t c o m e s in t h e r i g h t p l a c e i n th e d o c u m e n t . C H A I R P E R S O N : Ye s in t h e r i g h t p l a c e j a . A D V K AT E H O F M E Y R : B u t w e c a n ju s t w o r k w it h i t s e p a r a t e l y n o w. C H A I R P E R S O N : Ye s . A D V K AT E H O F M E Y R : W e w i ll r e p la c e t h e c l e a n c o p y i n y o u r b u n d l e a s w e ll C h a ir. C H A I R P E R S O N : J a o k a y. T h a n k y o u . 10 A D V K AT E H O F M E Y R : S o M r M a i n g a n y a I u n d e r s ta n d y o u r e v i d e n c e e a r l ie r t o b e t h is i s t h e a p p lic a b l e s e t o f s t a n d a r d in d u s tr i a l c o d e s t h a t a p p li e s to E M S E P, i s t h a t c o r r e c t? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : W e a r e i n d e b t e d t o y o u fo r p o i n t i n g t h a t o u t t o us this morning. Te l l m e w h i c h o f t h o s e c o d e s i t w a s d e t e r m i n e d a p p li e d t o E M L ? M R M A R K P H A K A M I L E M A I N G A N YA : I t d o e s n o t s a y b u t t h e o n ly o n e I c o u l d s e e t h a t r e fe r s t o p e tr o l e u m i s c o d e 3 3 2 p e tr o l e u m a n d synthesises. 20 A D V K AT E H O F M E Y R : S o if w e g o d o w n th e r e is a c o l u m n t h e t h ir d c o l u m n is S I C c o d e a n d th e n w e r e a d t h e fir s t o n e o f th o s e is 0 3 0 1 . I f w e m o v e d o w n t o 0 3 3 2 is th a t t h e o n e y o u r e fe r r i n g t o ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : T h e o n e y o u h a v e r in g e d a c t u a ll y i n p e n ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s , y e s . Page 62 of 153 30 AUGUST 2019 – DAY 153 A D V K AT E H O F M E Y R : Is th a t w h a t y o u u n d e r s t a n d M r K o b e n a d e t e r m i n e d o r is t h a t y o u lo o k i n g a t t h e c o d e a n d w o r k i n g o u t w h a t i t might have been? M R M A R K P H A K A M I L E M A I N G A N YA : It i s m e l o o k i n g a t th e c o d e s . B e c a u s e – s o i f y o u lo o k a t t h a t c o d e s 3 3 2 i t a l s o h a s s u b - c o d e s b e t w e e n u n d e r it w h ic h I h a v e i n d ic a t e d t h e r e b u t t h e s u b m is s i o n a n d h e d i d n o t in d i c a t e w h ic h o f th o s e p a r t ic u l a r c o d e s a p p l ie d to t h i s . A D V K AT E H O F M E Y R : B u t E M L w a s n e i th e r a r e fi n e r y n o r a synthesiser was it? 10 M R M A R K P H A K A M I L E M A I N G A N YA : No it does not say so on the a p p lic a ti o n . A D V K AT E H O F M E Y R : Ye s . S o w h y w o u l d y o u i d e n ti f y t h a t a s th e a p p lic a b l e o n e ? M R M A R K P H A K A M I L E M A I N G A N YA : B e c a u s e t h e s u b - c o d e s t a lk t o t h e c r u d e p e tr o l e u m . A D V K AT E H O F M E Y R : I b e g y o u r p a r d o n ? M R M A R K P H A K A M I L E M A I N G A N YA : The sub-codes that I have r e fe r r e d t o t a l k t o c r u d e p e tr o l e u m . A D V K AT E H O F M E Y R : C r u d e p e tr o l e u m ? 20 M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s . A D V K AT E H O F M E Y R : Okay could you get us those sub-codes over the break? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : Th a n k y o u . in t e r r o g a ti n g th is p r e - a s s e s s m e n t . Page 63 of 153 R ig h t s u b s e q u e n t t o y o u 30 AUGUST 2019 – DAY 153 M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : O f t h e E M L f u n d i n g q u a l i fy i n g fo r E M S E P w i th M r K o b e n a y o u t h e n I u n d e r s t a n d a n d th a t is i f w e g o b a c k t o p a g e 3 o f y o u r a ff id a v i t a t p a r a g r a p h C o n t h a t p a g e . C h a ir t h a t is D D 1 3 a . We a r e b a c k in t h e s m a l l e r f il e . C H A I R P E R S O N : Ye s p a g e 3 y o u s a y ? A D V K AT E H O F M E Y R : I n d e e d . C H A I R P E R S O N : O k a y. A D V K AT E H O F M E Y R : A n d I w o u ld a c t u a l ly li k e t o p i c k i t u p a t D o n 10 t h a t p a g e . Yo u s a y a t D t h e r e “ M r K o b e n a s u b s e q u e n t ly in f o r m e d m e o n th e 2 3 r d May t h is year that the DTI in an email c o r r e s p o n d e n c e d a t e d 3 M a y 2 0 1 8 h a d c o n fir m e d t h a t fu e l s t o r a g e a n d b le n d i n g is n o t c o v e r e d b y th e EMSEP program.” Do you see that? M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : W a s E M L e v e r d o i n g a n y t h in g o th e r t h a n fu e l storage to your knowledge? 20 M R M A R K P H A K A M I L E M A I N G A N YA : N o . A D V K AT E H O F M E Y R : S o i n M a y 2 0 1 8 i f I r e a d t h i s a n d c o r r e c t m e i f my understanding is incorrect. In M a y 2 0 1 8 t h e D T I c o n fi r m e d th a t E M L w o u ld n o t h a v e q u a li f i e d f o r E M S E P f u n d in g , is t h a t r i g h t ? M R M A R K P H A K A M I L E M A I N G A N YA : S o in m y s u p p l e m e n ta r y a ffi d a v i t t h is is a p o i n t t h a t I a m r e f e r r i n g to . Page 64 of 153 30 AUGUST 2019 – DAY 153 A D V K AT E H O F M E Y R : L e t u s g o th e r e . M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. A D V K AT E H O F M E Y R : bundle. 3 2 .1 . Yo u w i ll f in d t h a t a t p a g e 3 2 .1 i n th e s a m e T h a t i s t h e c o m m e n c e m e n t o f y o u r s u p p l e m e n ta r y a ffi d a v i t . M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s , y e s . A D V K AT E H O F M E Y R : I s t h a t r i g h t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is r i g h t . A D V K AT E H O F M E Y R : M r M a i n g a n y a a n d t h e n i f y o u g o o v e r t h e p a g e 10 t o 3 2 .2 t h a t is w h e r e i n p a r a g r a p h 5 y o u d e a l w i t h E M S E P i s th a t correct? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : A n d w h a t d i d y o u w a n t to t e l l u s a b o u t th a t ? M R M A R K P H A K A M I L E M A I N G A N YA : S o I w a n te d to c l a r i fy t h a t – t h a t c o n fir m a t io n fr o m t h e D T I w a s r e f e r r i n g to a d i ff e r e n t tr a n s a c ti o n . B e c a u s e t h e I D C w a s c o n s i d e r i n g a d i ff e r e n t tr a n s a c t io n a n d it r e q u e s t e d c o n f ir m a ti o n fr o m E M S E P – f r o m D T I w h e t h e r th a t w o u ld a p p ly. S o t h e r e s p o n s e i n th a t e m a il w a s c o n f ir m i n g t h a t i t w o u l d n o t a p p ly. 20 A D V K AT E H O F M E Y R : Ye s I u n d e r s t a n d t h a t b u t i f t h e D TI a d m i t te d l y in r e l a t i o n to a d i ff e r e n t f u n d i n g a p p l ic a ti o n i n M a y o f 2 0 1 8 s a i d f u e l s t o r a g e d o e s n o t q u a l i fy f o r E M S E P t h a t w o u ld I a s s u m e a p p ly t o a n y a p p lic a ti o n f o r f u n d in g b a s e d o n f u e l s to r a g e , c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : A n d E M L w a s n e v e r d o i n g a n y t h in g o t h e r th a n Page 65 of 153 30 AUGUST 2019 – DAY 153 f u e l s to r a g e , c o r r e c t? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : S o i t w o u l d n o t h a v e q u a l i fi e d w h e n i t w a s p r e a s s e s s e d b y Mr K o b e n a ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : S o r r y ju s t s a y t h a t c o r r e c t ly. M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s I a g r e e . A D V K AT E H O F M E Y R : Thank you. Thank you. I w o u l d th e n li k e to m o v e i f w e m a y b a c k t o y o u r a ff id a v i t a n d ju s t to c o n c l u d e t h e q u e s t i o n 10 o f E M S E P i s it fa ir t h e n to s a y t h a t t h e c o m m i t t e e r e l i e d e n ti r e ly o n M r K o b e n a ’s p r e - a s s e s s m e n t th a t t h is fu n d i n g a p p l ic a ti o n q u a li f ie d a t le a s t o n t h e w o r k in g c a p i t a l l o a n f o r t h e p r e f e r e n ti a l E M S E P r a t e ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s h e is t h e o n e w h o d i d t h e a s s e s s m e n t . U s u a l ly t h e t e a m w o u l d a l s o m o tiv a t e d u r i n g t h e m e e ti n g a s to w h y i t d e e m s i t q u a l i fy in g . A D V K AT E H O F M E Y R : D id t h e y d o th a t to y o u r k n o w le d g e ? M R M A R K P H A K A M I L E M A I N G A N YA : I c a n n o t c o n fi r m I w a s n o t th e r e . I do not know anything. A D V K AT E H O F M E Y R : I n d e e d y o u w e r e n o t p r e s e n t w e r e y o u ? 20 M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : H a v e y o u d o n e a n y t h i n g t o i n v e s t ig a t e w h e t h e r t h e r e w e r e j u s ti f ic a ti o n s g iv e n o r w h e t h e r t h e c o m m i t t e e j u s t r e li e d o n that sentence that we read at page 571 – you do not need to go back t h e r e . B u t t h e s e n t e n c e ju s t s ti p u l a t e d c li e n t q u a li fi e s u n d e r E M S E P. M R M A R K P H A K A M I L E M A I N G A N YA : Page 66 of 153 I c a n n o t c o n f ir m i f t h e r e 30 AUGUST 2019 – DAY 153 d is c u s s io n s o n t h a t o r n o t . A D V K AT E H O F M E Y R : T h a n k y o u . I w o u l d t h e n li k e to m o v e t o p a g e 4 I t h i n k t h a t i s w h e r e w e w e r e a n d lo o k a t t h e e n g a g e m e n ts w it h S o u t h A fr ic a n E x p r e s s . W e h a v e t r a v e r s e d t h is a b i t a lr e a d y i n y o u r e v id e n c e b e c a u s e w e w e r e d e a li n g w h e n w e l o o k e d a t t h e s u b m is s i o n t h a t w e n t t o t h e c o m m i t te e . W i t h s o m e o f w h a t I a m g o in g t o s u g g e s t a r e c u r i o u s features … M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : 10 O f t h e w a y i n w h ic h th e S A A t e n d e r w a s a p p r o a c h e d b y t h e I D C a n d y o u w i ll r e c a l l th e is s u e s w e tr a v e r s e d there was taking a funding decision despite the fact that the tender had not been approved. M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . A D V K AT E H O F M E Y R : A n d y o u h a v e g iv e n y o u r c o m m e n t o n t h a t . M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . A D V K AT E H O F M E Y R : A n d t h e n d e c i d i n g t o r u n a fi n a n c i a l v i a b il i ty m o d e l o n a fiv e y e a r c o n tr a c t in c ir c u m s t a n c e s w h e r e t h e t e n d e r w a s o n ly f o r th r e e y e a r s . Is th e r e a n y o t h e r a s p e c t o f t h e e n g a g e m e n ts b e t w e e n th e I D C a n d S A A t h a t y o u w o u l d l i k e to c o m m e n t o n ? 20 M R M A R K P H A K A M I L E M A I N G A N YA : N o t a t t h i s s ta g e . A D V K AT E H O F M E Y R : T h a n k y o u . W e ll t h e n w e c a n g o o v e r t o p a g e 5 b e c a u s e t h e r e w e d e a l w i th t h e f in a n c ia l v i a b il i ty a s s e s s m e n t … M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . A D V K AT E H O F M E Y R : Th a t w a s m a d e o f th e E M L a p p l ic a ti o n a n d y o u w i ll p ic k t h a t u p u n d e r t h e h e a d i n g o f 4 .3 i n b o l d o n t h a t p a g e . Fo r t h is Page 67 of 153 30 AUGUST 2019 – DAY 153 p u r p o s e M r M a i n g a n y a w e a r e g o i n g to n e e d t o l o o k a t th e c a s h fl o w m o d e l th a t w a s p r o d u c e d b y t h e r e l e v a n t te a m in s o f a r a s i t w a s s u b m i tt e d t o t h e c o m m i t t e e . N o w it is in t h e B u n d le C C h a ir b u t w h a t I h a v e d o n e f o r t o d a y ’s p u r p o s e s i s j u s t p r o v i d e d u s w it h b i g g e r c o p i e s b e c a u s e t h e r e a r e l o ts o f n u m b e r s o n t h e p a g e a n d i t i s j u s t e a s i e r t o s e e . S o i f I m a y beg leave to hand it up. C h a ir t h is is a d u p lic a t e o f t h e p a g e i n th e bundle and … C H A I R P E R S O N : Ye s . 10 A D V K AT E H O F M E Y R : My s u g g e s t i o n is ju s t f o r to d a y ’s c o n v e n ie n c e we work on the A3. C H A I R P E R S O N : O k a y. A D V K AT E H O F M E Y R : I a m h a n d in g u p t w o p a g e s . CHAIRPERSON: Thank you. A D V K AT E H O F M E Y R : T h e i d e a is t h a t w e w o r k w it h t h e m to g e th e r i f we can. T h e y c o m e fr o m d i ffe r e n t p a r ts o f th e b u n d l e . S o j u s t fo r r e c o r d p u r p o s e s th e o n e p a g e i s p a g in a t e d M P M 5 - 7 - 6 . T h a t i s a c t u a ll y t h e o n e w e n e e d t o s t a r t w it h a n d it a p p e a r s in D D 1 3 C a n d t h e n th e s e c o n d o n e I w a n t t o w o r k w i th M r M a i n g a n y a a p p e a r s i n y o u r a ff i d a v i t . 20 W e ll i t is a n a n n e x u r e t o y o u r a ff id a v i t … M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . A D V K AT E H O F M E Y R : A n d th a t is p a g in a te d M P M 2 1 a n d th a t i s in D D 1 3 A b u t fo r e a s e w e w i ll w o r k o n - I u n d e r s ta n d y o u h a v e a ls o b e e n g iv e n a l a r g e r c o p y Mr M a i n g a n y a a n d y o u r le g a l r e p r e s e n ta t iv e s a s w e ll . I w il l w o r k o n my s m a ll e r c o p i e s b e c a u s e w e s e e m o n ly t o h a v e Page 68 of 153 30 AUGUST 2019 – DAY 153 r e c e i v e d th r e e . Mr M a in g a n y a t h e d o c u m e n t a t 5 - 7 - 6 w h a t i s t h a t? M R M A R K P H A K A M I L E M A I N G A N YA : S o d u r i n g t h e d is c u s s i o n s w i t h t h e l e g a l t e a m i t - i t w a s i d e n t i fi e d th a t t h e r e w a s a n e r r o r i n t h e c a s h fl o w. A D V K AT E H O F M E Y R : O h , b e f o r e w e g e t t o t h e e r r o r. Can we start with 5-7-6? M R M A R K P H A K A M I L E M A I N G A N YA : J a . A D V K AT E H O F M E Y R : S o r r y a n d I s h o u l d h a v e s a id t o y o u 5 - 7 - 6 - is t h e c a s h fl o w s ta t e m e n t t h a t a p p e a r e d i n t h e s u b m is s i o n 10 M R M A R K P H A K A M I L E M A I N G A N YA : J a , ja . A D V K AT E H O F M E Y R : T h a t w a s a p p r o v e d i n F e b r u a r y 2 0 1 7 . M R M A R K P H A K A M I L E M A I N G A N YA : J a . A D V K AT E H O F M E Y R : Right. S o I j u s t w a n t t o k n o w w h a t th is d o c u m e n t i s . R ig h t . M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. A D V K AT E H O F M E Y R : W h a t i s i t? M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. So these are the cash fl o w p r o j e c ti o n s d e r i v e d fr o m t h e f in a n c i a l m o d e l. They are used to d e t e r m i n e t h e r e p a y m e n t - t h e a b ili t y t o r e p a y t h e f a c il i ty. 20 A D V K AT E H O F M E Y R : T h a n k y o u . M R M A R K P H A K A M I L E M A I N G A N YA : J a . A D V K AT E H O F M E Y R : S o j u s t i n l a y m a n ’s s p e a k I a s s u m e t h e p e o p l e in y o u r Fi n a n c e D e p a r t m e n t w il l l o o k a t t h e a p p l ic a ti o n f o r f u n d i n g . M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . A D V K AT E H O F M E Y R : H o w m u c h is s o u g h t? Page 69 of 153 30 AUGUST 2019 – DAY 153 M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . A D V K AT E H O F M E Y R : W i ll l o o k a t t h e p o s i ti o n o f th e b u s i n e s s . M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . A D V K AT E H O F M E Y R : I ts c a s h fl o w a n d w i ll d e t e r m in e w h e th e r o n th e t e r m s f o r th e l o a n t h a t a r e b e in g p r o p o s e d . M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . A D V K AT E H O F M E Y R : T h e l o a n w il l b e s e r v i c e d . It w i ll b e - th e c o m p a n y w il l b e i n a p o s i ti o n t o p a y i t b a c k . Is th a t a f a ir s u m m a r y ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. 10 A D V K AT E H O F M E Y R : T h a n k y o u . S o i f w e c a n ju s t l o o k a t t h is p a g e b e c a u s e f o r t h o s e o f u s th a t d o n o t w o r k w it h t h e s e s p r e a d s h e e t s o f t e n . I t s o m e t i m e s r e q u ir e s a l i t tl e b it o f d e c i p h e r i n g . Fir s t o f a l l j u s t r e a d f o r u s t h e h e a d in g o f t h e d o c u m e n t. M R M A R K P H A K A M I L E M A I N G A N YA : So 5-7-6 i ts “EML Energy C o n s o li d a t e d C a s h Fl o w S t a t e m e n ts f o r t h e Ye a r E n d i n g 2 8 Fe b r u a r y ” . A D V K AT E H O F M E Y R : T h a n k y o u a n d t h e n b e lo w t h a t t h e r e i s a n u n d e r l i n e d R a n d d e n o m i n a ti o n w i th a n a p o s tr o p h e a n d th r e e z e r o s . C a n y o u e x p la i n t o u s w h a t t h a t m e a n s ? M R M A R K P H A K A M I L E M A I N G A N YA : T h o u s a n d s . 20 A D V K AT E H O F M E Y R : A n d l e t m e j u s t a s k y o u h e r e I u n d e r s ta n d th a t t o s i g n i fy t h a t w h e n w e l o o k a t t h e t a b l e … M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . A D V K AT E H O F M E Y R : there. Right. W e h a v e g o t a w h o l e lo t o f n u m b e r s T h o s e a r e - t h o s e a r e o t h e r t h a n w h e r e it is a d a t e i n d i c a t e d . T h o s e a r e R a n d s . I s t h a t c o r r e c t? Page 70 of 153 30 AUGUST 2019 – DAY 153 M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : S o i t is - i t is m o n e y b e in g s ig n if i e d - f u n d s ? M R M A R K P H A K A M I L E M A I N G A N YA : J a . A D V K AT E H O F M E Y R : R ig h t , b u t o f te n t h o s e n u m b e r s d o n o t e x c e e d fi v e d i g i t s . C o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : J a . A D V K AT E H O F M E Y R : So does the R’000 mean we must add three zeros to any numbers that we see in this table? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . 10 A D V K AT E H O F M E Y R : O k a y. S o ju s t t o h e l p u s i f ta k e t h a t fi r s t c o l u m n a u d i t a n d i t is h e a d e d “ F e b r u a r y 2 0 1 5 ” . D o y o u s e e t h a t? M R M A R K P H A K A M I L E M A I N G A N YA : J a . A D V K AT E H O F M E Y R : T h e r e is a n u m b e r i n b r a c k e ts th e r e - ( 4 7 ) . D o you see that? M R M A R K P H A K A M I L E M A I N G A N YA : J a . A D V K AT E H O F M E Y R : T h a t i s n o t R 4 7 ,0 0 . I s i t ? M R M A R K P H A K A M I L E M A I N G A N YA : N o . T h a t is 4 7 0 0 0 . A D V K AT E H O F M E Y R : W h a t i s i t? M R M A R K P H A K A M I L E M A I N G A N YA : 4 7 0 0 0 . 20 A D V K AT E H O F M E Y R : O k a y. So every number in this table we must a d d th r e e d i g i ts t o . M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : I n a s e n s e m u lt i p l i e d b y 1 0 0 0 . Is t h a t r i g h t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is r i g h t . A D V K AT E H O F M E Y R : O k a y. R i g h t . Th e n I w o u l d li k e t o k n o w u n d e r Page 71 of 153 30 AUGUST 2019 – DAY 153 t h e h e a d i n g “ S e n io r D e b t ” d o y o u s e e th a t h a l f w a y d o w n o n th e l e f t hand side? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : W h a t i s t h a t d e s c r i b i n g ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is a w o r k i n g c a p i ta l f a c il i ty t h a t w a s a p p r o v e d . T h e s ix m i ll io n . A D V K AT E H O F M E Y R : O k a y. S o j u s t t o r e m i n d o u r s e lv e s t h r e e w a s a n a p p r o v a l o n 6 F e b r u a r y 2 0 1 7 f o r a w o r k in g c a p i t a l l o a n o f R 6 mi ll i o n a t f o u r p e r c e n t i n te r e s t . C o r r e c t? 10 M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : O k a y a n d th e n j u s t h e lp m e if w e m o v e a c r o s s fr o m t h a t “ S e n i o r D e b t ” a n d f o l lo w it t h r o u g h t h e c o lu m n s . I f y o u g o t o J u l y 2 0 1 7 ’s c o lu m n . C h a ir t h a t i s a b o u t f o u r - fi v e a l o n g fr o m th e l e f t … C H A I R P E R S O N : Ye s . A D V K AT E H O F M E Y R : A n d y o u f o l lo w i t d o w n t o w h e r e i t i s i n l in e w i t h “ S e n i o r D e b t ” . T h e r e is a R 6 0 0 0 th e r e . D o y o u s e e t h a t ? W e l l t h e r e is a 6 0 0 0 . W e h a v e t o m u lt i p ly i t b y 1 0 0 0 . M R M A R K P H A K A M I L E M A I N G A N YA : O k a y, y e s . 20 A D V K AT E H O F M E Y R : S o i t - i t s ig n i f ie s s ix m il li o n . C o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : I s t h a t s h o w in g u s t h e s ix mi ll i o n th a t w o u ld h a v e b e e n m a d e a v a il a b l e t h r o u g h th e l o a n fa c i li ty t o E M L ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : A n d w h y i s i t s h o w n a s c o m i n g i n to t h e c a s h Page 72 of 153 30 AUGUST 2019 – DAY 153 fl o w p o s i ti o n o f th e b u s i n e s s i n J u l y 2 0 1 7 ? M R M A R K P H A K A M I L E M A I N G A N YA : So that - that is a peak period. I t is a p e r io d w h e n th e fu ll f a c i li t ie s w o u l d h a v e b e e n d is b u r s e d . A D V K AT E H O F M E Y R : R ig h t . M R M A R K P H A K A M I L E M A I N G A N YA : S o - s o i t is c o m i n g e a r l ie r b u t i t r e a c h e s s i x m i ll io n i n 2 0 1 7 . A D V K AT E H O F M E Y R : I n J u l y 2 0 1 7 ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s , y e s . A D V K AT E H O F M E Y R : 10 R i g h t , b e c a u s e t h e a p p r o v a l w a s in F e b r u a r y. S o a s I u n d e r s t a n d t h i s i t i s a n ti c i p a t i n g t h a t b y w h a t y o u c a ll t h e p e a k t h e f u l l f a c il it i e s … M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : W i ll h a v e b e e n m a d e a v a il a b l e a n d th a t is w h y w e h a v e s i x m i ll i o n t h e r e . C o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : Th e n h e l p m e . T h e n e x t li n e u n d e r t h a t - s ti ll u n d e r “ S e n i o r D e b t ” s a y s p r o p o s e d I D C lo a n r e p a y m e n ts . C o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : 20 A n d t h e n i f w e f o ll o w th a t a c r o s s t h a t li n e s t a r ts i n F e b r u a r y 2 0 1 9 w i t h a n a m o u n t o f 2 .6 4 0 m i ll i o n . Is th a t r i g h t? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is r i g h t . A D V K AT E H O F M E Y R : W h a t i s t h a t ? M R M A R K P H A K A M I L E M A I N G A N YA : S o t h o s e a r e t h e r e p a y m e n ts . A D V K AT E H O F M E Y R : O f t h e l o a n o f s ix m il li o n … M R M A R K P H A K A M I L E M A I N G A N YA : O f t h e lo a n ( i n t e r v e n e s ) . Page 73 of 153 30 AUGUST 2019 – DAY 153 A D V K AT E H O F M E Y R : T h a t w a s e x t e n d e d i n … M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . A D V K AT E H O F M E Y R : By J u ly 2 0 1 7 . M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : Correct; and if we track that along - please c o r r e c t m e i f I a m u n d e r s t a n d in g it i n c o r r e c t ly b u t t h e r e is a r e p a y m e n t o f a b o u t 2 . 6 m il li o n i n Fe b r u a r y 2 0 1 9 . C o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : Th e r e is a n e x t r e p a y m e n t in F e b r u a r y 2 0 2 0 o f 10 1 .4 m i lli o n o r t h e r e a b o u t … M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : A n d th e n th e r e is a r e p a y m e n t in F e b r u a r y 2 0 2 1 o f a b o u t 1 . 9 m il li o n . C o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : S o t h a t i n s o f a r a s c a p i ta l o f t h e lo a n is c o n c e r n e d i s r e p a i d b y Fe b r u a r y 2 0 2 1 . C o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : If we could then go to the next line. What is that? 20 M R M A R K P H A K A M I L E M A I N G A N YA : S o t h a t i s t h e i n te r e s t . S o th e fir s t l in e w a s j u s t s h o w i n g t h e c a p it a l. N o w th e r e i s a - t h e f o u r p e r c e n t in t e r e s t . A D V K AT E H O F M E Y R : R i g h t . S o t h o s e s t a r t t o b e r e p a id f r o m w h a t I c a n u n d e r s ta n d h e r e i n J u l y 2 0 1 7 . Is th a t r ig h t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. Page 74 of 153 30 AUGUST 2019 – DAY 153 A D V K AT E H O F M E Y R : A n d th e n y o u t r a c k t h o s e n u m b e r s t h r o u g h a n d if I a m u n d e r s t a n d i n g t h is c o r r e c t ly b y F e b r u a r y 2 0 2 2 t h a t i s w h e n th e la s t in t e r e s t p a y m e n t o f 3 8 0 0 0 is m a d e . I s t h a t r ig h t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is r i g h t . A D V K AT E H O F M E Y R : O k a y. S o j u s t s o t h a t w e a r e o n th e s a m e p a g e . T h e w o r k i n g c a p i ta l f a c il i ty o f s ix m il li o n a c c o r d i n g t o t h is c a s h fl o w s t a t e m e n t w a s g o i n g to h a v e b e e n fu l ly r e p a i d c a p i t a l a n d in t e r e s t by February 2022. Is that right? C H A I R P E R S O N : I a m s o r r y M s H o f m e y r. 10 A D V K AT E H O F M E Y R : S o r r y C h a ir. C H A I R P E R S O N : Fe b r u a r y 2 0 2 2 … A D V K AT E H O F M E Y R : Ye s . C H A I R P E R S O N : O h t h a t 3 8 ( i n te r v e n e s ) . A D V K AT E H O F M E Y R : T h a t 3 8 . CHAIRPERSON: 38 000 ja. A D V K AT E H O F M E Y R : T h a t i s t h e f i n a l p a y m e n t … C H A I R P E R S O N : O k a y. A D V K AT E H O F M E Y R : A s I u n d e r s t a n d M r M a i n g a n y a ’s e v i d e n c e o n t h is f a c i li t y a n d i t w o u l d b e to w a r d s th e i n t e r e s t . 20 CHAIRPERSON: Ja. A D V K AT E H O F M E Y R : S o a m I r i g h t M r M a in g a n y a t h a t t h e r e p a y m e n t t a k e s p l a c e a n d is c o n c l u d e d b y F e b r u a r y 2 0 2 2 ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : T h a n k y o u . L e t u s m o v e to th e s e c o n d fa c i li ty t h a t w a s a v a i l a b le . That is under the heading “Mezzanine Debt”. Page 75 of 153 Is 30 AUGUST 2019 – DAY 153 t h a t r ig h t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is r i g h t . A D V K AT E H O F M E Y R : S o w h a t d o e s t h a t s ig n if y - th e “ M e z z a n i n e D e b t ” ? W h ic h l o a n w a s th a t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t w a s a 6 . 5 m il li o n f a c il i ty fo r e q u ip m e n t . A D V K AT E H O F M E Y R : A n d th e i n t e r e s t r a t e o n t h a t w a s ? M R M A R K P H A K A M I L E M A I N G A N YA : I t i s t h e 1 3 . 8 p e r c e n t r e a l a f te r tax return. 10 A D V K AT E H O F M E Y R : Thank you and again I understand this cash fl o w s ta t e m e n t t o w o r k i n t h e s a m e w a y i n th is l i n e a s w e d i d w i t h “ S e n i o r D e b t ” b u t p l e a s e j u s t c h e c k m e if I a m in c o r r e c t . M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . A D V K AT E H O F M E Y R : I f w e ta k e J u ly 2 0 1 7 a g a i n b e c a u s e t h a t is a l w a y s th e p e a k w h e n t h e f u l l f u n d s w il l h a v e b e e n e x t e n d e d y o u s e e a n a m o u n t o f 6 . 5 m il li o n t h e r e . D o y o u s e e t h a t? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : W h a t d o e s t h a t s ig n i fy ? M R M A R K P H A K A M I L E M A I N G A N YA : 20 A g a i n it s i g n i f ie s th a t it i s fu ll y d is b u r s e d a t t h a t ti m e . A D V K AT E H O F M E Y R : S o b y J u ly 2 0 1 7 E M L h a s r e c e iv e d 6 . 5 m il li o n for the plant and equipment loan. Correct? M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . A D V K AT E H O F M E Y R : A n d t h e n i f w e g o d o w n th e li n e a g a i n w h a t th is is r e fl e c t in g o n m y u n d e r s t a n d i n g is t h e r e p a y m e n t s o f th a t lo a n . Page 76 of 153 30 AUGUST 2019 – DAY 153 C o r r e c t? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : O k a y. S o t h e y s t a r t i n F e b r u a r y 2 0 1 9 . Is t h a t r ig h t - w i t h a n a m o u n t o f 2 . 1 m il li o n ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : T h e r e is a s e c o n d p a y m e n t i n Fe b r u a r y 2 0 2 0 o f 2 .1 m i lli o n ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : A n d t h e r e is a t h i r d p a y m e n t in F e b r u a r y 2 0 2 1 10 o f 2 . 1 m i ll i o n / M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : S o i n s o f a r a s t h e r e p a y m e n t s o n t h a t lo a n a r e c o n c e r n e d th e y a r e c o m p l e t e d b y F e b r u a r y 2 0 2 1 . Is t h a t r ig h t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h e c a p i t a l p o r t io n ? A D V K AT E H O F M E Y R : Ye s . M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : A g a i n c a p i ta l . R i g h t ; a n d t h e n t h e r e is s o m e t h i n g c a l l e d - o n th e l e f t h a n d s id e - “ B u ll e t P a y m e n t ” . W h a t d o e s that mean? 20 M R M A R K P H A K A M I L E M A I N G A N YA : S o th a t i s t h e i n t e r e s t o n th a t f a c i li ty b e c a u s e i t is n o t p r i c e d l ik e th e fir s t o n e . A D V K AT E H O F M E Y R : R ig h t . M R M A R K P H A K A M I L E M A I N G A N YA : S o t h e f ir s t o n e i n c u r s i n te r e s t a s t i m e g o e s . T h a t is w h y th e r e p a y m e n t s s t a r t w h e n i t is d i s b u r s e d . T h i s o t h e r o n e is p r ic e d li k e a n e q u i ty in s tr u m e n t . S o t h e r e t u r n o n it is Page 77 of 153 30 AUGUST 2019 – DAY 153 a c h i e v e d a t t h e e n d . T h a t i s w h y i t is r e f e r r e d t o a s a b u ll e t f a c i li t y a t the end. A D V K AT E H O F M E Y R : O h , o k a y. S o t h e li a b il i ty t o p a y th e i n t e r e s t o n ly k ic k s i n l a te r. C o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . S o w e s t a r t c o l le c ti n g t h e c a p i t a l fi r s t … A D V K AT E H O F M E Y R : Ye s . M R M A R K P H A K A M I L E M A I N G A N YA : A n d t h e n th e r e t u r n is c o l le c te d la t e r. 10 A D V K AT E H O F M E Y R : A n d a s I u n d e r s t a n d t h i s d o c u m e n t t h e fi r s t in t e r e s t p a y m e n t i s i n F e b r u a r y 2 0 2 1 . Is t h a t c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : A n d i t is i n th e a m o u n t o f 2 .7 m i ll io n ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : And then the second interest payment is in F e b r u a r y 2 0 2 2 . T h e s a m e a m o u n t 2 .7 m i ll i o n . C o r r e c t? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : A n d s o a g a i n s i m i l a r t o t h e w o r k i n g c a p i ta l l o a n t h e p l a n t a n d e q u i p m e n t l o a n i s s i m il a r l y r e p a i d b y t h e e n d o f 20 February 2022. Correct? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : A n d t h a t - F e b r u a r y 2 0 2 2 - is fi v e y e a r s fr o m t h e d e c i s i o n in F e b r u a r y 2 0 1 7 . C o r r e c t? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : Thank you. Right. Page 78 of 153 Yo u i n y o u r e v id e n c e 30 AUGUST 2019 – DAY 153 w a n t e d t o t a lk a b o u t a n e r r o r … M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : A n d I s to p p e d y o u a n d I a p o l o g is e . Let us u n d e r s t a n d th e e r r o r t h a t w a s b r o u g h t t o t h e a tt e n ti o n o f t h e I D C b y t h e C o m m i s s i o n ’s i n v e s t ig a t o r s . W h a t is t h e e r r o r o n th is c a s h fl o w s t a te m e n t th a t w e a r e l o o k i n g a t ? M R M A R K P H A K A M I L E M A I N G A N YA : S o y o u w il l r e c a l l th a t th e c li e n t s a i d i t h a d g o t e q u ip m e n t d o n a t e d t o i t b y D e n e l o f 4 0 m il li o n a n d - a n d w e v a lu e d i t a t s e v e n m il li o n o u r s e l v e s . 10 S o - s o t h a t d o n a ti o n is r e fl e c t e d a s i n c o m e i n t h e h a n d s o f t h e c l ie n t b u t i t is a s s e t. It i s n o t cash. S o w h e n w e d o t h e c a s h f lo w s ta t e m e n ts w e m u s t t a k e i t o u t b e c a u s e t h e c li e n t d id n o t r e c e iv e c a s h . I t j u s t r e c e i v e d a s s e ts . A D V K AT E H O F M E Y R : H m . M R M A R K P H A K A M I L E M A I N G A N YA : S o - s o i n - i n t h i s c a s h f lo w s t a te m e n t t h e - t h e i n c o m e s h o u l d h a v e b e e n r e d u c e d b y th e v a l u e o f t h a t d o n a ti o n t o t a k e it o u t … A D V K AT E H O F M E Y R : H m . M R M A R K P H A K A M I L E M A I N G A N YA : 20 And th a t is the error th a t h a p p e n e d . I t w a s n o t a d j u s t e d o u t. A D V K AT E H O F M E Y R : A n d w h a t a m o u n t w a s t h e e r r o r ? M R M A R K P H A K A M I L E M A I N G A N YA : S o t h e - t h e a d j u s t m e n t i s a b o u t t o - t o a d d b a c k t h a t i n c o m e . I t h i n k i t w i ll b e a r o u n d 6 . 9 0 3 . A D V K AT E H O F M E Y R : Ye s . A b o u t 6 . 9 m il li o n . R i g h t ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s . Page 79 of 153 30 AUGUST 2019 – DAY 153 A D V K AT E H O F M E Y R : N o w Mr M a i n g a n y a h o w c o u l d a n e r r o r l ik e t h i s o c c u r in y o u r r i g o r o u s p r o c e s s e s t h a t y o u h a v e d e s c r i b e d ? M R M A R K P H A K A M I L E M A I N G A N YA : C h a ir, I - I t h i n k a n e r r o r l ik e t h is s h o u l d n o t h a p p e n . A D V K AT E H O F M E Y R : C o u l d y o u - M r M a in g a n y a i f y o u w o u l d m in d ju s t a s b i t c lo s e r. C H A I R P E R S O N : J a , j a , ja . A D V K AT E H O F M E Y R : T h a n k y o u . M R M A R K P H A K A M I L E M A I N G A N YA : S o - s o … 10 C H A I R P E R S O N : I - I t h i n k I a m - I h a v e g iv e n u p y o u r v o ic e . I t s e e m s t o b e j u s t l o w b y n a tu r e . M R M A R K P H A K A M I L E M A I N G A N YA : S o r r y. S o r r y, s o r r y C h a ir p e r s o n . C H A I R P E R S O N : I d o n o t k n o w i f t h e t e c h n ic i a n s h a v e … A D V K AT E H O F M E Y R : W e w il l t r y a n d r e m i n d y o u to b r i n g i t c lo s e r. M R M A R K P H A K A M I L E M A I N G A N YA : J a . C H A I R P E R S O N : W h e t h e r t h e r e is a n y th i n g t h e t e c h n i c i a n s c a n d o . M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. CHAIRPERSON: Ja. M R M A R K P H A K A M I L E M A I N G A N YA : 20 Ye s C h a ir p e r s o n . I was saying it is r e g r e t t a b le t h a t t h i s e r r o r w a s n o t p ic k e d b y a l l t h e p r o c e s s e s … A D V K AT E H O F M E Y R : H m . M R M A R K P H A K A M I L E M A I N G A N YA : Including the peer review processes. A D V K AT E H O F M E Y R : Because Mr Mainganya if I may just come in t h e r e . I t is - i t is - I m e a n y o u r d e s c r i p ti o n o f it w it h r e s p e c t i s a v e r y Page 80 of 153 30 AUGUST 2019 – DAY 153 s i m p l e d e s c r ip t io n . I t is n o t a c o m p l e x m a t t e r. M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . A D V K AT E H O F M E Y R : Th a t i t s h o u ld n o t h a v e r e fl e c t e d a R 6 . 9 m il li o n c a s h p o s it i o n i n s o fa r a s t h e D e n e l a s s e t d o n a ti o n w a s c o n c e r n e d . Is it ? It is n o t c o m p le x - t h e e r r o r ? C H A I R P E R S O N : I t s e e m s s o m e th i n g th a t c o u l d a n d s h o u ld h a v e b e e n e a s i ly p ic k e d u p . M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s C h a ir p e r s o n . Th e - t h e a m o u n t s h o u ld h a v e b e e n a d d e d b a c k . 10 I do not know how it was m is s e d . I t s h o u l d h a v e b e e n a d d e d b a c k … CHAIRPERSON: Hm. M R M A R K P H A K A M I L E M A I N G A N YA : Because it was not a cash receipt. It was an asset receipt. C H A I R P E R S O N : D i d - d id … A D V K AT E H O F M E Y R : H m . C H A I R P E R S O N : I t h i n k w e p r o b a b ly w a n t t o a s k t h e s a m e q u e s ti o n . M R M A R K P H A K A M I L E M A I N G A N YA : H m . CHAIRPERSON: What are the chances that it - it was a genuine error? What are the chances that it was not a genuine error in your own 20 assessment? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s C h a i r p e r s o n . C H A I R P E R S O N : O r i s t h a t s o m e t h in g y o u a r e u n a b le t o … ? M R M A R K P H A K A M I L E M A I N G A N YA : N o , n o , n o . I - I h a v e e n g a g e d w i t h t h e t e a m th a t p r e p a r e d th e fi n a n c i a l m o d e l a n d I a l s o s h o w e d t h e m t h is e r r o r. Th e y i n d i c a t e d t o m e th is w a s a g e n u in e e r r o r in th e Page 81 of 153 30 AUGUST 2019 – DAY 153 assessment. I - I d id n o t g e t t h e i m p r e s s i o n t h a t i t w a s d o n e in t e n t io n a l ly w h e n I - w h e n I i n te r v i e w e d t h e m . I i n t e r v i e w e d b o th t h e fi n a n c i a l s p e c i a l is t a n d t h e h e a d o f th e d e p a r t m e n t a n d - a n d h e n c e I r e q u e s t e d th e m t o - t o d o a n o t h e r c a l c u l a ti o n . To s a y h a d t h is e r r o r n o t b e e n d o n e w h a t w o u l d h a v e b e e n t h e i m p a c t o n th e c a s h f l o w s ? C H A I R P E R S O N : O k a y. A D V K AT E H O F M E Y R : T h a n k y o u . C H A I R P E R S O N : It w a s n o t y o u r q u e s ti o n . 10 A D V K AT E H O F M E Y R : N o i t - m i n e w a s c l o s e t o i t C h a ir. S o m i n e h a s n o t b e c o m e n o t n e c e s s a r y a n y f u r t h e r. Mr Mainganya when was the e r r o r fir s t m a d e k n o w n to y o u ? M R M A R K P H A K A M I L E M A I N G A N YA : I t h in k i t w a s a r o u n d M a y w h e n I h a d i n t e r v ie w s w i t h y o u . A D V K AT E H O F M E Y R : W i t h t h e C o m m i s s i o n . M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s . A D V K AT E H O F M E Y R : Thank you and what steps did you take? Yo u h a v e in d ic a t e d to t h e C h a ir y o u d id g o b a c k … M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . 20 A D V K AT E H O F M E Y R : To e n g a g e w it h t h e fi n a n c i a l t e a m . I also u n d e r s t a n d fr o m y o u r a ffi d a v i t y o u a s k e d t h e m t o l o o k a t th e n u m b e r s a g a in in a s e n s e … M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . A D V K AT E H O F M E Y R : A n d t h a t is t h e s e c o n d s p r e a d s h e e t t h a t y o u h a v e i n fr o n t o f y o u C h a ir a n d i t is a t p a g i n a t e d p a g e 2 1 . Page 82 of 153 That is in 30 AUGUST 2019 – DAY 153 DD13A. M r M a i n g a n y a w h y d id y o u a s k fo r t h is r e c a lc u la t io n o f t h e c a s h fl o w s ta t e m e n t t o b e d o n e ? M R M A R K P H A K A M I L E M A I N G A N YA : C h a ir p e r s o n w h e n - w h e n t h e C o m m i s s i o n p o in t e d t h is to m e t h e y w a n t e d t o k n o w w h e th e r th e b u s i n e s s w o u l d h a v e b e e n v i a b l e s h o u l d t h is e r r o r n o t h a v e b e e n d o n e . H e n c e I r e q u e s t t h is to b e r e d o n e . A D V K AT E H O F M E Y R : A n d M r M a i n g a n y a I u n d e r s t a n d y o u r a ff id a v i t t o s a y i t w o u l d s ti ll h a v e b e e n v i a b le . Is t h a t c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : 10 Ye s . I a m s a y i n g th e f a c il i ti e s t h e - t h e w o r k in g c a p i ta l - t h e fir s t o n e - w o u l d - w o u l d s ti ll b e r e p a i d i n 2 0 2 1 b u t t h e - t h e “ M e z z a n in e ” o n e fa c i li t y w o u ld b e r e p a y a b l e a y e a r la t e r th a n w a s a n t ic ip a t e d . A D V K AT E H O F M E Y R : I t i s t h a t l a s t p a r t th a t I w a n t t o e x p lo r e a b i t f u r th e r w i t h y o u M r M a i n g a n y a w h e n y o u s a y t h e “ M e z z a n i n e D e b t ” w h ic h f o r o u r p u r p o s e s I w a n t t o s u g g e s t w e c a ll t h e p l a n t a n d e q u ip m e n t l o a n b e c a u s e t h a t is h o w i t w a s r e fe r r e d to i n th e d e c is io n making. I u n d e r s ta n d y o u t o s a y th e p l a n t a n d e q u i p m e n t lo a n w o u l d h a v e b e e n p a id la t e r. M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . 20 A D V K AT E H O F M E Y R : R e p a i d la t e r b u t o n ly o n e y e a r l a t e r t h a n o n t h e o r i g in a l c a lc u l a ti o n . Is t h a t r ig h t ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s . A D V K AT E H O F M E Y R : Ye s . H o w e v e r M r M a in g a n y a i f y o u g o b a c k t o page 5-7-6. M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . Page 83 of 153 30 AUGUST 2019 – DAY 153 A D V K AT E H O F M E Y R : R e m e m b e r w e h a d d e t e r m in e d o n t h a t p a g e that the plant and equipment loan would have been paid back by February 20 - 2022. Do you see that? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s . A D V K AT E H O F M E Y R : I f w e lo o k a t th a t s a m e l i n e o n p a g e 2 1 w h ic h i s t h e r e c o n s tr u c t e d c a s h fl o w s ta t e m e n t . M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . A D V K AT E H O F M E Y R : Yo u w i ll s e e t h a t t h e p l a n t a n d e q u i p m e n t l o a n is o n l y r e p a i d i n F e b r u a r y 2 0 2 5 . C o r r e c t ? 10 M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s . A D V K AT E H O F M E Y R : S o t h a t is m o r e th a n a y e a r l a te r. C o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s . A D V K AT E H O F M E Y R : I t is i n f a c t t h r e e y e a r s l a te r. M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , yes. Oh, so - so C h a ir p e r s o n r e m e m b e r t h e te r ms o f t h e - o f t h e e q u ip m e n t f a c i li ty a r e t h a t y o u o n ly d e d u c t p a y m e n t s s u c h t h a t t h e r e is c a s h a v a il a b l e o f a m il li o n . S o w h e n y o u r e p a y t h e c li e n t m u s t r e m a i n w i t h a m i ll io n . S o i f - i f e v e r y y e a r w h e n w e te s t t h e m o d e l w e f in d th a t s h o u l d w e a s k fo r r e p a y m e n t t h e c li e n t w o u l d h a v e a mi ll i o n l e s s . 20 T h e r e is n o r e p a y m e n t d u e i n t h a t d a t e . S o - s o b e c a u s e o f t h is e r r o r w h i c h h a d s h o w n t h a t t h e c li e n t w a s h a v i n g m o r e c a s h t h a n it h a d . T h e - t h e t e a m m o d e l l e d r e p a y m e n ts e a r li e r t h a n t h e te r ms o f t h e f a c i li t ie s . Th e t e r m s o f t h e f a c i li t ie s s a y t h a t th e r e p a y m e n ts m u s t s t a r t in 2 0 2 1 b u t b e c a u s e i t w a s s h o w in g a n e r r o n e o u s c a s h t h e y w e r e s t a r ti n g e a r li e r th a n t h e te r m s o f t h e f a c il i t ie s . Page 84 of 153 30 AUGUST 2019 – DAY 153 So - so as per agreement - as per agreed on the credit a p p r o v a l t h e r e p a y m e n t s m u s t s ta r t fr o m 2 0 2 1 to 2 0 2 4 b u t t h e y s t a r te d e a r l ie r b e c a u s e o f t h is c a s h . S o w h e n w e c o r r e c t th is a d j u s t m e n t w e w e s t a r t s w e e p i n g w i t h t h e t e r m s o f t h e f a c i li t ie s fr o m 2 0 2 1 . So the t e r m s o f th e f a c il i ti e s s a i d t h e c li e n t m u s t h a v e r e p a i d b y 2 0 2 4 a s p e r a g r e e m e n t b u t o n t h e r e s t a t e d m o d e l i t r e p a y s b y 2 0 2 5 . T h a t is w h a t I m e a n w h e n I a m s a y in g i t r e p a y s a le t t e r t h a n th e fi r s t m o d e l. A D V K AT E H O F M E Y R : T h a n k y o u Mr M a i n g a n y a . Yo u w i ll r e c a ll w h e n w e w e r e l o o k i n g a t th e d e c is io n t a k e n o n 6 F e b r u a r y 2 0 1 7 … 10 M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : I s a id w e m a y n e e d to c o m e b a c k t o i t w h e n w e lo o k e d a t t h e c a s h fl o w s t a t e m e n t a n d y o u r c l a r i f ic a ti o n n o w h a s b e e n h e l p f u l in th a t r e g a r d b u t I w o u l d li k e u s j u s t to g o b a c k t h e r e i f w e m a y s o th a t I c a n b e s u r e I a m e n tir e l y u n d e r s t a n d in g y o u r p o s i ti o n . Yo u w i ll fi n d t h a t i n D D 1 3 B a n d i t i s a t p a g e 2 - 6 - 5 . M R M A R K P H A K A M I L E M A I N G A N YA : I a m t h e r e . CHAIRPERSON: A D V K AT E H O F M E Y R : Yo u w il l s e e u n d e r tw o th e r e th a t d e a l s w i th p l a n t a n d e q u i p m e n t l o a n . Th e o n e w e a r e i n t e r e s t e d in a t th e m o m e n t . 20 C o r r e c t? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : N o w i t i s j u s t t h e w o r d i n g h e r e d o e s tr o u b l e m e b e c a u s e i t s e e m s o n i ts f a c e t o b e c o n tr a d i c t o r y … M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : B u t y o u m a y a s s is t m e th e r e . I t r e a d s : Page 85 of 153 30 AUGUST 2019 – DAY 153 “ A R 6 . 5 m i lli o n p l a n t a n d e q u i p m e n t s u b o r d i n a t e d lo a n f a c ili t y t o b e u s e d f o r th e u p g r a d e o f p l a n t a n d e q u ip m e n t a n d t h e p u r c h a s e o f b o w s e r s . Th e f a c i li ty w il l h a v e a t e r m o f fi v e y e a r s a n d is e x p e c te d t o a c h i e v e a 1 3 .8 r e a l a f t e r t a x r e t u r n . R e p a y m e n ts w il l b e i n t h e f o r m o f c a s h s w e e p s fr o m y e a r 2 0 2 1 to fi n a n c i a l y e a r 2 0 2 4 m a in t a i n i n g a m i n i m u m c a s h b a la n c e o f o n e m il li o n w i t h c a s h sweeps occurring every six months b e g in n i n g 28 February 2018.” 10 M R M A R K P H A K A M I L E M A I N G A N YA : H m , y e s . A D V K AT E H O F M E Y R : I d o n o t u n d e r s ta n d th a t . C a n - c a n y o u a s s is t me there? M R M A R K P H A K A M I L E M A I N G A N YA : I - I lo o k e d a t t h a t C h a ir p e r s o n . So A D V K AT E H O F M E Y R : I f y o u c o u ld ju s t c o m e a b i t c l o s e r. M R M A R K P H A K A M I L E M A I N G A N YA : S o - s o i t w a s c o n tr a d i c t o r y t o me. A D V K AT E H O F M E Y R : H m . 20 M R M A R K P H A K A M I L E M A I N G A N YA : Hence I looked at the actual a g r e e m e n t . T h e a c tu a l a g r e e m e n t d o e s a c t u a ll y c o r r e c t t h a t . S o i t is n o t 2 0 1 8 . I t i s 2 0 2 1 in t e r m s o f r e p a y m e n t o n t h e a c t u a l s u b o r d i n a t e d a g r e e m e n t w i th t h e c li e n t . A D V K AT E H O F M E Y R : S o w a s t h is a n e r r o r t h a t w a s t h e n p ic k e d u p b e f o r e th e a g r e e m e n t s w e r e c o n c l u d e d i n y o u r … Page 86 of 153 30 AUGUST 2019 – DAY 153 M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : Vie w. M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s . A D V K AT E H O F M E Y R : So the approval that was given did not make sense at point two. Did it? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . T h e fa c i li ty w a s o n ly s u p p o s e d to s t a r t fr o m 2 0 2 1 . A D V K AT E H O F M E Y R : A n d th e n h e lp m e w i t h o n e l a s t p a r t . M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . 10 A D V K AT E H O F M E Y R : W h y w o u l d y o u r e f e r t o i t a s a lo a n f a c il it y o f fi v e y e a r s w h e n i t e n d s u p b e i n g a lo a n f a c ili t y o f e i g h t y e a r s ? M R M A R K P H A K A M I L E M A I N G A N YA : I th in k i t r e f e r s t o t h e r e p a y m e n t p e r i o d - t h e f iv e y e a r s . A D V K AT E H O F M E Y R : S o t h e r e is b a s ic a l ly a h o l id a y o f t h r e e y e a r s . Is t h a t r ig h t? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s b e c a u s e t h is i s a n e q u i ty in s t r u m e n t . A D V K AT E H O F M E Y R : S o t h e y g e t to f u n d t h e ir p l a n t a n d e q u ip m e n t fr o m J u ly 2 0 1 7 … 20 M R M A R K P H A K A M I L E M A I N G A N YA : H u h - u h . A D V K AT E H O F M E Y R : B u t t h e y o n ly h a v e t o r e - s t a r t r e p a y in g t h a t i n 2021. M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : I s t h a t c o r r e c t? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. Page 87 of 153 30 AUGUST 2019 – DAY 153 A D V K AT E H O F M E Y R : T h a n k y o u b u t y o u a g r e e w it h m e t h a t i t c a n n o t p o s s i b ly h a v e b e e n th a t t h e y s t a r t e d c a s h … M R M A R K P H A K A M I L E M A I N G A N YA : J a , ja . A D V K AT E H O F M E Y R : S w e e p i n g i n … M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : Fe b r u a r y 2 0 1 8 . M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t . A D V K AT E H O F M E Y R : L e t u s g o b a c k i f w e m a y j u s t t o t h a t p a g e 2 1 . CHAIRPERSON: 10 I a m s o r r y. J u s t s o t h a t I fo ll o w t h a t p a r t . Is t h a t r e g u la r f o r t h e m t o h a v e t h a t h o li d a y ? M R M A R K P H A K A M I L E M A I N G A N YA : m o d e l w h a t t h e c l ie n t c a n a ff o r d . Ye s C h a ir p e r s o n . We - we S o m e t i m e s b e c a u s e th e c a s h fl o w s a r e s m a l l e r i n t h e b e g i n n i n g . W e g i v e c li e n ts a m o r a t o r i u m . S o … C H A I R P E R S O N : Ye s , b u t y o u r e c o u p … M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . C H A I R P E R S O N : L a t e r w h a te v e r t h e y w o u l d h a v e p a id e a r l ie r ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s . Hence - hence you c a n s e e t h e r e t u r n o n t h is fa c i li ty i s … C H A I R P E R S O N : O k a y. 20 M R M A R K P H A K A M I L E M A I N G A N YA : M u c h h ig h e r t o c o m p e n s a t e f o r that period. C H A I R P E R S O N : O k a y. M R M A R K P H A K A M I L E M A I N G A N YA : T h a t w e g iv e t h e m a h o li d a y f o r. C H A I R P E R S O N : O k a y, th a n k y o u . A D V K AT E H O F M E Y R : A n d th e n if w e g o b a c k t o 2 1 b u t m a y b e b e fo r e Page 88 of 153 30 AUGUST 2019 – DAY 153 w e d o t h a t j u s t to p ic k u p o n t h e C h a ir ’s q u e s t i o n . O f c o u r s e a ll t h e ti m e - c o r r e c t m e i f I a m w r o n g - t h e I D C i s d e c id i n g w h i c h a p p l ic a ti o n s t o f u n d . C o r r e c t? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : I s t h a t r i g h t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is r i g h t . T h a t is c o r r e c t . A D V K AT E H O F M E Y R : T h a n k y o u . J u s t f o r th e r e c o r d y o u n e e d t o … M R M A R K P H A K A M I L E M A I N G A N YA : Ye s th a t i s c o r r e c t. A D V K AT E H O F M E Y R : G iv e t h e p o s i t iv e a n s w e r. 10 M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. A D V K AT E H O F M E Y R : N o t t h e h e a d n o d . M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. A D V K AT E H O F M E Y R : S o i t is a s s e s s i n g a t a n y p o in t in t i m e w h i c h t o f u n d a n d w h e th e r i t h a s t h r e e y e a r s r e c e i v in g n o r e p a y m e n t i n r e la t io n t o a p a r tic u la r a p p l ic a n t a s c o m p a r e d w it h o th e r s . I a s s u m e w o u l d b e s o m e t h i n g i t t a k e s in t o a c c o u n t . I s t h a t r i g h t? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s . T h a t is c o r r e c t b e c a u s e th e - t h e s u b o r d i n a t e d f a c i li t ie s a r e tr e a t e d a s a n e q u i t y in s t r u m e n t . S o t h e r e t u r n o n th e m is - is m u c h h i g h e r. 20 A D V K AT E H O F M E Y R : B u t d e l a y e d . M R M A R K P H A K A M I L E M A I N G A N YA : D e la y e d . Hence the period is lo n g e r. A D V K AT E H O F M E Y R : I n d e e d . M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : S o i t i s - it i s - I w o u l d s u g g e s t t o y o u a Page 89 of 153 30 AUGUST 2019 – DAY 153 b a l a n c e t h a t h a s t o b e s t r u c k w h e n f in a n c i a l v ia b il it y is a s s e s s e d . M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : Yo u g e t a b i g g e r r e tu r n a t t h e e n d … M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : B u t y o u d o n o t g e t r e p a y m e n t i n th e i n t e r i m a n d I a s s u m e y o u w o u l d h a v e t o t a k e i n t o a c c o u n t th a t i m p a c t o n t h e r e s t o f t h e I D C ’s d e c is i o n m a k i n g a l b e i t t h a t w e d e a l in g w i t h f a ir ly s m a l l fi g u r e s h e r e . I a c c e p t t h a t . M R M A R K P H A K A M I L E M A I N G A N YA : O h y e s , y e s . S o w e - w e a s s i g n 10 c a p i t a l in t e r m s o f h o w m u c h w e c a n p r o v i d e u n d e r t h e s e f a c ili t ie s a n d w h e t h e r th e o th e r f a c il it i e s d o c o m p e n s a t e fo r th e m b e c a u s e w e h a v e m a n y fa c i li ti e s . O t h e r s a r e r e p a y in g d u r i n g th e p e r io d o f m o r a to r i u m t h a t w e g r a n t t o o t h e r f a c il i ti e s . A D V K AT E H O F M E Y R : T h a n k y o u . C H A I R P E R S O N : T h e - w h e r e y o u g iv e a c li e n t a h o li d a y a s - a s w e c a ll it now - the arrangement c o m p e n s a t io n whole deal you that ju s t you s tr u c t u r e m e n ti o n e d i n to that the later whole on the r e p a y m e n t s a r e h i g h e r. W o u l d th e a i m b e to a c h i e v e th e s a m e b e n e fi t fo r I D C a s I D C 20 w o u ld h a v e a c h ie v e d i f t h e r e h a d b e e n n o h o li d a y o r is th e p o s it i o n th a t b e c a u s e y o u h a v e b e e n g i v e n a h o l i d a y I D C w il l s tr u c t u r e t h e r e p a y m e n t s in s u c h a w a y t h a t i t m u s t e n d u p g e t ti n g m o r e fr o m y o u a s a c li e n t t h e n o t h e r w is e w o u l d h a v e b e e n t h e c a s e i f t h e r e h a d b e e n h o li d a y - h o li d a y ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . Page 90 of 153 30 AUGUST 2019 – DAY 153 CHAIRPERSON: I n o t h e r - is th e a i m t o s i m i la r ly a c h i e v e t h e s a m e t h i n g b e c a u s e y o u j u s t w a n t to a s s is t t h e c li e n t o r is th e r e a n e l e m e n t o f s a y i n g w e ll w e m u s t p u n is h y o u a li t tl e b it i n o r d e r to d i s c o u r a g e p e o p l e fr o m w a n ti n g t o g e t i n t o h o l i d a y s . M R M A R K P H A K A M I L E M A I N G A N YA : O k a y C h a ir p e r s o n . T h a n k s . S o I would not say … C H A I R P E R S O N : O r i s t h a t s o m e t h in g th a t y o u a r e n o t s u r e a b o u t ? M R M A R K P H A K A M I L E M A I N G A N YA : N o , n o , n o I a m s u r e . CHAIRPERSON: Ja. 10 M R M A R K P H A K A M I L E M A I N G A N YA : I c a n e x p l a in i t t o y o u . S o it is not a punishment … C H A I R P E R S O N : Yo u w o u l d n o t u s e p u n i s h . M R M A R K P H A K A M I L E M A I N G A N YA : I t is n o t a p u n is h m e n t t o t h e c li e n t … CHAIRPERSON: Ja. M R M A R K P H A K A M I L E M A I N G A N YA : B u t i t is a n a s s i s t a n c e to t h e c li e n t b e c a u s e t h e t y p e o f c li e n ts t h a t w e f u n d s o m e o f t h e m a r e s tr u g g li n g . C H A I R P E R S O N : Ye s . 20 M R M A R K P H A K A M I L E M A I N G A N YA : S o in t h e e a r li e r p e r i o d s t h e y a r e n o t a b l e to p a y b u t o v e r t i m e th e y g e t m o r e c o n tr a c t s t h e b u s in e s s s u r v iv e s , s o w e g iv e t h is f a c il i ty a s i f t h e I D C i s i n v e s ti n g i n t h e b u s i n e s s b u t b e c a u s e w e a r e s u s p e n d i n g o u r c a s h fl o w s t h e c l ie n ts m u s t c o m p e n s a te u s fo r t h a t i n th e e n d . S o – a n d a l s o t h e s e f a c i li t ie s a r e s u b o r d i n a t e d , m e a n i n g o t h e r c r e d i to r s a r e p a i d fir s t t h a t t h e I D C , Page 91 of 153 30 AUGUST 2019 – DAY 153 s o t h e r e ’s m o r e r is k s to t h e I D C h e n c e w e s a y t h e c li e n t a t t h e e n d , w h e n th e b u s i n e s s is v i a b le a n d m a k in g m o n e y th e y m u s t c o m p e n s a t e u s fo r t h a t r is k t h a t w e ’r e t a k i n g s o th a t w e c a n p l o u g h i t b a c k a n d f u n d o th e r c l ie n ts w it h t h e r e tu r n t h a t w e g e t b u t a s is i n th is c a s e w e m o d e l it s u c h t h a t w e a r e o n l y a b l e t o g e t t h a t m o n e y i f t h e c l ie n t ’s b u s in e s s s u c c e e d s a s w e ll . S o s h o u l d t h e c l i e n t f a il o t h e r c r e d i t o r s w i ll b e p a id fir s t th e n t h e I D C t h a t is t h e a s s is t a n c e w e a r e g iv in g t o t h e c l i e n t , I d o n ’t s e e i t a s a p u n is h m e n t. CHAIRPERSON: 10 Ye s , n o , n o I u n d e r s t a n d t h a t I th i n k w h a t I ’ m lo o k in g fo r is w h e t h e r y o u s a y, i f w e h a d n ’ t g iv e n t h is c l i e n t a h o l id a y o v e r, f o r e x a m p le , a fiv e y e a r p e r i o d w e h a v e n ’ t g i v e n t h is c l ie n t a h o li d a y o f, w h a t t w o y e a r s , fo r e x a m p l e t h e f ir s t t w o y e a r s a n d t h e y s t a r t p a y in g o n th e th ir d y e a r, w h e th e r y o u lo o k a t s i m p ly p u t ti n g y o u r s e l v e s i n t h e s a m e p o s i t io n y o u w o u l d h a v e b e e n in fi n a n c i a l ly i n t e r m s o f w h a t y o u g e t o r w h e t h e r y o u a c t u a ll y m a k e m o r e , y o u s e e k t o m a k e m o r e m o n e y b y r e a s o n o f th e f a c t t h a t t h e r e ’s b e e n s o m e h o li d a y ? M R M A R K P H A K A M I L E M A I N G A N YA : CHAIRPERSON: 20 W e tr y t o a c h ie v e b o t h . O h y o u t r y to a c h i e v e b o th ? M R M A R K P H A K A M I L E M A I N G A N YA : W e tr y to b e c o m p e n s a t e d f o r t h e l o n g e r p e r io d a n d w e tr y t o b e c o m p e n s a t e d fo r t h e r i s k i n e s s o f t h e f a c i li ty. CHAIRPERSON: Okay thank you. A D V K AT E H O F M E Y R : T h a n k y o u C h a ir. Mr Mainganya just in r e l a ti o n t o p a g e 2 1 y o u w e r e e x p la i n i n g … [i n te r v e n e s ] . Page 92 of 153 30 AUGUST 2019 – DAY 153 CHAIRPERSON: A r e y o u b a c k i n h is … [ i n t e r v e n e s ] . A D V K AT E H O F M E Y R : W e a r e b a c k i n h is a ffi d a v i t w h ic h is D D 1 3 A . T h i s w a s th e r e c a lc u la t io n d o n e w h e n y o u w e n t b a c k to t h e fi n a n c e t e a m , is t h a t r ig h t ? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : CHAIRPERSON: Ye s And it…[intervenes]. Yo u d i d m e n t io n th e p a g e b u t … [ in t e r v e n e s ] A D V K AT E H O F M E Y R : 2 1 C h a ir b u t i t ’s a ls o o n t h e b i g A 3 t h a t I h a n d e d u p w h i c h m i g h t ju s t b e m o r e c o n v e n i e n t t o l o o k a t . 10 CHAIRPERSON: O h o k a y. A D V K AT E H O F M E Y R : T h is w a s t h e r e c o n s t r u c t e d c a s h f lo w s t a te m e n t d o n e b y t h e fi n a n c e t e a m w h e n th e e r r o r w a s d r a w n t o t h e i r a tt e n ti o n , is th a t r i g h t? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : T h a t’s r i g h t . I t d o e s n o t , a s I u n d e r s t a n d i t , a c c o u n t f o r th e in c r e a s e i n th e i n t e r e s t r a t e t h a t o u g h t t o h a v e b e e n p a id b y E M L i f it , a s w e ’v e a g r e e d d i d n o t q u a li fy f o r M C E P f u n d in g i s t h a t r i g h t ? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : 20 T h a t’s r i g h t . T h a t w o u l d h a v e i n c r e a s e d i ts i n t e r e s t p a y m e n t s f r o m 4 % t o 1 3 % c o r r e c t … [ in t e r v e n e s ] . CHAIRPERSON: I w a s n ’ t s u r e w h e th e r h e w a n t e d t o a d d s o m e t h in g ? A D V K AT E H O F M E Y R : A p o l o g i e s d i d y o u w a n t t o a d d s o m e t h in g there Mr Mainganya? CHAIRPERSON: To th e p r e v i o u s q u e s t io n . M R M A R K P H A K A M I L E M A I N G A N YA : Ye s C h a ir p e r s o n f o r t h is I j u s t Page 93 of 153 30 AUGUST 2019 – DAY 153 w a n t e d t o o n ly a d j u s t f o r th e i m p a c t o f t h e e r r o r, I d id n ’ t w a n t t o a d ju s t f o r a n y t h i n g e ls e . A D V K AT E H O F M E Y R : F u l ly u n d e r s t o o d . M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , s o I d id n ’t c o r r e c t t h o s e o th e r r e p a y m e n t s t h a t w e r e r e p a y a b le a s p e r t h a t f a c i li ty a n d I d i d n ’ t c h a n g e a n y f ig u r e o t h e r t h a n t o c o r r e c t th e e r r o r. A D V K AT E H O F M E Y R : T h a n k y o u , d o y o u a g r e e w i th m e t h o u g h , th a t if t h is w a s p r o p e r ly t o h a v e b e e n a s s e s s e d a t t h e ti m e , t h is a p p li c a t io n f o r f u n d in g , t w o t h in g s w o u ld h a v e h a d t o h a v e c h a n g e d i n t h e c a s h 10 fl o w s t a t e m e n t a n a l y s is t h a t w a s p r o d u c e d b y th e f in a n c e d e p a r t m e n t . T h e f ir s t is t h a t t h e f a c il i ty w o u ld n o t h a v e q u a l i fi e d f o r M C E P f u n d i n g a n d s o t h e in t e r e s t r a t e o n th a t l o a n w o u ld h a v e h a d t o h a v e b e e n a t p r i m e p lu s 3 % , c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : Ye s t h a t ’s c o r r e c t . A n d t h e n th e s e c o n d t h i n g i s th a t t h e e r r o r w o u ld h a v e h a d t o h a v e b e e n r e m o v e d , c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : Ye s t h a t ’s c o r r e c t . S o h a d n o e r r o r s , a n d th e C h a ir h a s a lr e a d y q u e s t io n e d y o u o n t h e e r r o r o f w h e th e r t h e R 6 . 9 m ill i o n w a s a g e n u in e 20 e r r o r a n d y o u ’ v e g i v e n y o u r e v id e n c e o n t h a t , w e w i ll r e t u r n t o th e q u e s t io n o f w h e t h e r t h e M C E P e r r o r, I ’ m p u t ti n g t h a t i n in v e r te d c o m m a s a t t h e m o m e n t , w a s a ls o g e n u i n e i n y o u r v ie w b e c a u s e t h e r e h a v e b e e n f u r t h e r d e v e lo p m e n ts a n d i n v e s t ig a ti o n s a r o u n d t h a t b u t f o r p r e s e n t p u r p o s e s a t l e a s t t h o s e t w o t h i n g s w o u ld h a v e to b e c o r r e c t e d f o r t h e c o m m i t t e e to b e i n a p r o p e r p o s it io n t o a s s e s s t h e fi n a n c i a l Page 94 of 153 30 AUGUST 2019 – DAY 153 v ia b il it y o f th is a p p lic a ti o n , is t h a t r ig h t ? M R M A R K P H A K A M I L E M A I N G A N YA : S o y o u w a n t u s to s h o w w h a t t h e in t e r e s t w o u l d h a v e b e e n h a d i t n o t q u a l if i e d f o r M C E P ? A D V K AT E H O F M E Y R : M r M a i n g a n y a I d o n ’ t s u g g e s t it ’s n e c e s s a r y t h a t w e d o t h a t e x e r c is e , I’ m w o r k in g a t t h e l e v e l o f p r in c i p l e . M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : Okay yes. S o j u s t t o e s t a b l is h t h a t y o u a n d I a g r e e a t le a s t th o s e t w o e r r o r s w o u l d h a v e t o h a v e b e e n c o r r e c t e d . M R M A R K P H A K A M I L E M A I N G A N YA : 10 A D V K AT E H O F M E Y R : Ye s . T h a n k y o u I t h e n j u s t w a n t t o u n d e r s ta n d th e r a ti o n a le b e c a u s e I r e a d y o u r a ff i d a v i t to s a y y o u s t il l th in k th is w o u ld h a v e b e e n a fi n a n c i a l ly v i a b l e l o a n to f u n d , is th a t r i g h t a s y o u s i t h e r e today? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : Ye s . W h y w o u l d th e ID C w a n t t o e x te n d l o a n f a c i li t ie s t h a t e n d u p e x t e n d in g fo r e ig h t y e a r s i n a s i tu a ti o n w h e r e t h e y o n ly m a y b e h a v e a t e n d e r w h i c h i s , a s I u n d e r s ta n d t h e s u b m is s io n , t h e s o l e s o u r c e o f r e v e n u e o f E M L a t t h e t i m e f o r th r e e y e a r s , is t h a t usual? 20 M R M A R K P H A K A M I L E M A I N G A N YA : S o C h a i r p e r s o n t h e I D C b e in g in v o lv e d w i t h t h i s c l ie n t w a s n o t s e e i n g i t a s i t w il l o n l y f u n d i t f o r t h a t period of three years and exit. W e r a i s e th e r i s k o f th e c l i e n t h a v i n g o n e c o n tr a c t a n d i n m i ti g a t io n o f t h a t t h e c l i e n t in d i c a t e d t h a t i t w a s w o r k i n g o n o t h e r c o n tr a c t a n d a s w e ’ ll s e e l a te r th e c li e n t w a s a b l e t o a tt a in o t h e r c o n tr a c ts . S o a l t h o u g h f o r t h is lo a n t h e p r i m a r y s o u r c e o f Page 95 of 153 30 AUGUST 2019 – DAY 153 r e p a y m e n t w a s a S A A c o n tr a c t th e I D C w a s s e e i n g i t a s h e lp i n g it t o b e s u s t a i n a b l e t o b e a b le t o b id f o r o t h e r c o n tr a c ts h e n c e w e w e r e in v e s t i n g i n t h e c li e n t, g e t t in g s u ffi c i e n t e q u i p m e n t t o n o t o n l y g e t t h e S A A c o n tr a c t b u t to b e a b l e t o b i d f o r o t h e r c o n tr a c ts a n d f o r t h e p o i n t y o u a r e r a is in g t h e r e is a r is k in t h a t, i n t h a t t h e c l ie n t m a y n o t g e t t h o s e a n d a g a i n to t h e p o i n t y o u ’r e r a is i n g i t is w h y t h o s e o t h e r f a c i li t ie s a r e m a r k e d a t a h i g h e r r a t e b e c a u s e th e I D C c a r r i e s m o r e r is k b u t w e d o s e t u p c li e n t s l ik e t h a t w it h a n in i ti a l c o n tr a c t a n d w e p u s h them to find other revenues so that the business doesn’t end on 10 c o m p le t io n o f th a t c o n tr a c t. S o t h a t ’s w h y w e w e r e p r e p a r e d to t a k e t h e r is k t o p u t t h e c li e n t , s i n c e w e ’v e i n v e s t e d a lo t in t h e e q u i p m e n t t h e c li e n t w a s h a v in g w h ic h h a d a l i fe s p a n e x t e n d i n g m o r e t h a n f iv e years. A D V K AT E H O F M E Y R : And what if they can’t get other contracts? M R M A R K P H A K A M I L E M A I N G A N YA : S o t h a t is a r i s k w e a r e in a s a D e v e l o p m e n t F i n a n c e I n s ti t u ti o n , s o m e ti m e s c l ie n ts a r e n o t a b l e to g e t o th e r c o n t r a c t , s o m e ti m e s th e b u s i n e s s e s c l o s e , s o m e t i m e s th e y g e t o th e r c o n tr a c t s , s o m e t i m e s i t d o e s h a p p e n t h a t w e s u ff e r l o s s e s a n d t h e y c a n n o t r e p a y o u r f a c i li t ie s . 20 CHAIRPERSON: W h a t – I m e a n I c a n u n d e r s ta n d t h e id e a o n t h e p a r t o f a n in s t i tu t io n s u c h a s I D C o f s a y i n g w e a r e – w e a r e p r e p a r e d to t a k e s o m e r i s k in o r d e r to a s s is t m a y b e a c e r t a i n s e c t o r o f b u s i n e s s o r s o c ie t y a n d s o o n b u t I w o n d e r w h a t m e a s u r e s th e I D C w o u ld t a k e to tr y a n d m a k e s u r e t h a t it ’s d e c is i o n to ta k e t h a t r i s k is a r e a s o n a b l e o n e , p a r t ic u l a r ly w h e r e y o u ’r e lo o k in g a t p e o p l e w h o m i g h t b e d e p e n d i n g o n Page 96 of 153 30 AUGUST 2019 – DAY 153 t e n d e r s y o u k n o w, th e y t e l l y o u w e h a v e h o p e t h a t w e ’ ll g e t t w o o r t h r e e o th e r te n d e r s a n d t h e y m ig h t n o t e v e n k n o w w h o e l s e w i ll b e t e n d e r i n g f o r t h o s e t e n d e r s , w h a t a r e t h e ir p r o s p e c t s , w h a t w il l t h e i r p r o s p e c ts o f g e t t in g t h o s e w h e n th e y d o n ’ t e v e n k n o w w h o e ls e w i ll b e b i d d i n g fo r t h e m . I t s e e m s d i ff e r e n t t o m e fr o m s o m e b o d y w h o s a y, lo o k t h is is th e b u s i n e s s I h a v e n o w a n d h e r e i s a n o t h e r b u s i n e s s t h a t I ’ m g o in g to s t a r t , h e r e ’s m y b u s i n e s s p l a n y o u c a n l o o k a t i t a n d t h e y m o t iv a t e . Yo u c a n a s s e s s t h e r is k in a c e r t a in w a y t h e r e a r e n o t t o o m a n y v a r ia b le s b u t I’ m j u s t th in k i n g i f i t ’s a n e n t i ty th a t i s t a lk i n g a b o u t 10 g e t t in g o t h e r te n d e r s i n J o h a n n e s b u r g , i n P r e t o r i a , i n B l o e m f o n t e i n , I’ m ju s t m a k i n g e x a m p l e s , y o u s a y, b u t w e h a v e n o i d e a w h a ts o e v e r w h a t y o u r c h a n c e s w il l b e , a r e you able to shed any light as to how those r is k s a r e a s s e s s e d ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s C h a i r p e r s o n a n d t h a n k s f o r t h a t q u e s ti o n . I t is a d i ffic u l t s p a c e t h a t w e fi n d o u r s e lv e s i n b e c a u s e o n t h e o t h e r h a n d w e h a v e t o p l a y t h a t r o l e o f a s s is ti n g n e w e n tr a n t s i n t h e in d u s tr y a n d w e tr y o u r b e s t t o e s ti m a t e o n a b a l a n c e o f p r o b a b i li ti e s th a t t h e c li e n t h a s a r e a s o n a b l e p r o s p e c t o f g e t ti n g t h a t t e n d e r b u t w e m u s t a l w a y s r e m e m b e r t h a t o u r fu n d i n g o n ly f l o w s o n h i m 20 g e t t in g t h e t e n d e r. S o w e w o n ’ t g i v e h i m m o n e y u n t il h e g e ts i t b u t t h e n w e a ls o tr y t o d o a p r e - a s s e s s m e n t o f t h e a b il it y o f th e c l ie n t , s o if s o m e b o d y w h o ’s n e v e r b e e n i n v o l v e d i n t h is b u s i n e s s c o m e t o I D C a n d s a y I’v e b i d f o r t h i s f u n d m e a n d w e w i ll a s k q u e s ti o n s . Do you u n d e r s t a n d t h e i n d u s tr y, a r e y o u i n t h i s i n d u s tr y ? S o i n th is p a r ti c u l a r c li e n t w h a t th e s u b m is s i o n s a y s , it s a y s t h a t , t h i s p a r t ic u l a r c li e n t h a d Page 97 of 153 30 AUGUST 2019 – DAY 153 b e e n i n e x i s t e n c e fo r t e n y e a r s a n d a s w e k n o w m o s t o f t h e c l ie n ts w e f u n d , th e s m a l l b u s i n e s s e s f a i l w i t h i n th e ir fir s t y e a r. S o t h is o n e a t le a s t a s p e r a p p li c a t io n h a d b e e n t h e r e f o r t e n y e a r s , i t is i n th is in d u s tr y b u t t h e c li e n t i s c o m i n g to u s a n d s a y i n g , I’v e b e e n d o in g th is o n a p ie c e m e a l I d o n ’ t h a v e th e r i g h t e q u i p m e n t to b e a b l e to b id f o r b i g g e r b u s i n e s s e s a n d fo r m e t o b id fo r S A A i t r e q u i r e s m e t o h a v e t h i s lic e n s i n g r e g i m e , it r e q u ir e s m e t o h a v e th is e q u i p m e n t b u t th e n o n t h a t b a s is w e a s s e s s , w e s a y a t l e a s t t h i s c li e n t h a s s u r v i v e d f o r te n y e a r s in t h is b u s i n e s s w e c a n t a k e s o m e r is k o n h i m t h a t h e w i ll b e t h e r e 10 even post the SAA tender because of h is previous record, so…[intervenes]. C H A I R P E R S O N : L o o k in g a t t h e tr a c k r e c o r d . M R M A R K P H A K A M I L E M A I N G A N YA : L o o k i n g a t t h e tr a c k r e c o r d , s o – a n d i t’s n o t a lw a y s t h e c a s e C h a ir p e r s o n i n o t h e r d i ff ic u l t s e c t o r s w e h a v e t o s t il l tr y t o fa c i li t a t e , e s p e c i a l ly t h e e n tr a n ts o f n e w b l a c k p e o p l e , s o m e t i m e s t h e y ju s t h a v e t h e t e c h n ic a l k n o w h o w a n d t h e n t h e y d o n ’t h a v e t h e e q u i p m e n t s o w e a ls o g i v e t h e m b u s i n e s s s u p p o r t . S o a s y o u ’ ll s e e la t e r o n i n t h i s c li e n t w e s a i d h e m u s t g o f o r c o r p o r a t e g o v e r n a n c e tr a i n in g , w e g a v e h i m s u p p o r t in te r ms o f a p p o i n ti n g a 20 fi n a n c i a l m a n a g e r, w e a s s i s te d h i m w i th a fi n a n c i a l s u p p o r t . S o in a d d it i o n to t h e fu n d i n g w e tr y t o g iv e t h e m n o n - f u n d i n g s u p p o r t s o t h a t t h e y s u r v iv e p o s t t h a t c l ie n t b u t i t is a r is k t h a t th i n g s d o n ’ t a l w a y s happen as we planned. CHAIRPERSON: Th a n k y o u . A D V K AT E H O F M E Y R : C h a ir I n o t e t h a t w e a r e a t t h e l u n c h b r e a k Page 98 of 153 30 AUGUST 2019 – DAY 153 ti m e i f i t ’s c o n v e n ie n t w e c a n t a k e th e a d j o u r n m e n t . CHAIRPERSON: O k a y I t h i n k l e t ’s t a k e t h e a d jo u r n m e n t a n d w e w i ll resume at two, we adjourn. REGISTRAR: A l l r is e . INQUIRY ADJOURNS INQUIRY RESUMES C H A I R P E R S O N : I n o t e t h a t th is Fr i d a y a f t e r n o o n i s a v e r y e m p ty – i t is a v e r y e m p ty h a ll . A D V K AT E H O F M E Y R : I t is i n d e e d C h a ir. 10 CHAIRPERSON: W e c a n j u s t a s s u r e Mr M a in g a n y a t h a t i t is h a s g o t nothing to do with him, A D V K AT E H O F M E Y R : N o in d e e d n o t , in d e e d n o t . I think it is a c o m b in a ti o n o f Fr id a y a f te r n o o n a n d lo t s o f f ig u r e s t h a t w e h a v e b e e n d e a li n g w it h . C H A I R P E R S O N : T h a t is r i g h t . A D V K AT E H O F M E Y R : T h a n k y o u C h a ir. I f w e m a y p r o c e e d th e n . C h a ir t h e r e w e r e t w o a s p e c ts w e l l th e r e w e r e t h r e e a s p e c ts th a t M r M a in g a n y a w a s g o in g t o f o l l o w u p f o r u s o n o v e r t h e b r e a k . C H A I R P E R S O N : Ye s . 20 A D V K AT E H O F M E Y R : Th e o n e r e la t e d t o th e s u b - c o d e s . I i n d ic a t e d t o h i m t h a t a s h is e v i d e n c e p r o g r e s s e d a f t e r th a t p o in t t h e y n o lo n g e r became material certainly for my purposes. C H A I R P E R S O N : O k a y. A D V K AT E H O F M E Y R : S o I a m n o t c o n c e r n e d th a t w e g o t o t h o s e s u b codes. Page 99 of 153 30 AUGUST 2019 – DAY 153 C H A I R P E R S O N : O k a y. A D V K AT E H O F M E Y R : T h e o th e r t w o I d o w a n t to ju s t r e f e r e n c e q u ic k ly i n fa ir n e s s t o M r M a in g a n y a a n d t h e n o n e o r tw o f o l l o w u p q u e s t io n s a n d t h e n w e w i ll p r o c e e d . C h a i r f o r t h i s p u r p o s e w e n e e d t o b e w o r k in g w i t h D D 1 3 b . C H A I R P E R S O N : Ye s I h a v e g o t it . A D V K AT E H O F M E Y R : A n d i f y o u p i c k t h a t u p a t p a g e 1 8 9 . C h a ir t h e q u e s t io n a r o s e i n th e c o n t e x t o f th e is s u e a r o u n d th e te n d e r w i t h S A A b e i n g f o r t h r e e y e a r s b u t th e n t h e l o a n a s s e s s m e n t b e i n g d o n e o n a 10 fi v e y e a r b a s i s a n d th e q u e s ti o n t o M r M a i n g a n y a w a s w e ll h o w c o u l d t h a t r e a lly h a v e o c c u r r e d ? A n d h e i n d ic a te d t h a t th e r e h a d b e e n a n assessment as to what the extent of the exposure would be over at the e n d o f t h e t h r e e y e a r p e r i o d a n d I a s k e d h i m t o d r a w o u r a tt e n ti o n t o w h e r e t h a t w a s i n t h e s u b m is s i o n . A n d th a t y o u w il l fi n d a t p a g e 1 8 9 a s I h a v e i t . In t h e s e c o n d p a r a g r a p h th e r e t h is is p a r t o f th e s u b m is s io n t h a t w e n t t o t h e c o m m i t t e e o n t h e Fe b r u a r y 2 0 1 7 d a t e , i s t h a t c o r r e c t Mr Mainganya? M R M A R K P H A K A M I L E M A I N G A N YA : C o r r e c t . A D V K AT E H O F M E Y R : T h a n k y o u . A n d w h a t th e p a r a g r a p h y o u h a v e 20 d r a w n to o u r a t t e n t io n i s t h e s e c o n d p a r a g r a p h t h e r e it r e a d s : “ T h r o u g h th e o u t c o m e o f t h e d u e d il ig e n c e th e t e a m h a s a s s e s s e d t h a t t h e a c c o u n ta n ts u s e d b y E M L fo r m o n th ly r e p o r ti n g s h o u ld b e c h a n g e d t h is h a s b e e n in c l u d e d a s a n u n d e r ta k i n g . ” A n d t h e n t h e r e l e v a n t p a r t b e g in s i n t h e n e x t s e n te n c e . Page 100 of 153 30 AUGUST 2019 – DAY 153 “ T h e I D C e x p o s u r e t o t h e s e n io r lo a n o u ts i d e t h e t h r e e y e a r p e r io d o f t h e S A A c o n t r a c t is 1 . 1 2 I a s s u m e t h a t m e a n s m il li o n . ” And then it goes on and says: “ A m i t i g a n t i s t h a t t h e r e is R 1 . 8 m il li o n c a s h i n t h e b a n k a t t h a t p o i n t to r e p a y t h e fa c il i ty. ” Is t h a t w h a t y o u w a n t e d t o d r a w t o m y a tt e n ti o n ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : M r M a in g a n y a t h e R 1 . 8 m il li o n th a t i s r e f l e c te d 10 t h e r e is a p r o d u c t a t t h e t i m e o f t h a t e r r o r s ti ll b e i n g i n c lu d e d in t h e c a s h fl o w s ta t e m e n t, c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : S o t h e e r r o r w o u l d h a v e t o b e t a k e n in t o a c c o u n t t o k n o w w h a t t h e a c tu a l c a s h in th e b a n k p o s i t io n w o u ld b e a ft e r t h e t h r e e y e a r s , i s t h a t r i g h t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : A n d a s I h a v e i t fr o m y o u r r e c o n s tr u c te d m o d e l t h a t w o u ld r e d u c e t o a b o u t R 1 . 1 m il li o n , is t h a t r ig h t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. 20 A D V K AT E H O F M E Y R : M r M a i n g a n y a o f c o u r s e th e R 1 . – y o u h a v e tr a v e r s e d t h i s w i th t h e C h a ir a lr e a d y b u t … C H A I R P E R S O N : Ye s I a m s o r r y I t h i n k I g o t l o s t . A D V K AT E H O F M E Y R : A p o lo g i e s . C H A I R P E R S O N : Yo u w e n t t o 1 8 9 . A D V K AT E H O F M E Y R : 1 8 9 t h e s e c o n d p a r a g r a p h th e r e C h a ir. Page 101 of 153 30 AUGUST 2019 – DAY 153 C H A I R P E R S O N : O h o k a y. A D V K AT E H O F M E Y R : I t is t h e l a s t s e n t e n c e o f i t . C H A I R P E R S O N : I w a s s e e in g t h a t 1 . 1 2 . A D V K AT E H O F M E Y R : Ye s . C H A I R P E R S O N : A n d t h a t 1 . 8 b u t I w a s n o t s e e i n g s o m e o f t h e fi g u r e s you were mentioning. A D V K AT E H O F M E Y R : A p o lo g i e s . CHAIRPERSON: Hm. A D V K AT E H O F M E Y R : 10 S o t h a t l a s t – w e ll s e c o n d l a s t s e n t e n c e s a y s t h e r e is g o i n g to b e a n e x p o s u r e o n th e s e n i o r lo a n t h a t is t h e w o r k in g c a p i t a l l o a n o f R 1 . 1 2 a t t h e t i m e . Th a t i s m il li o n b u t t h e m it i g a n t t h a t is id e n t i fi e d is t h a t t h e r e is g o in g to b e a b o u t R 1 .8 m i ll io n i n c a s h i n th e bank, correct? M R M A R K P H A K A M I L E M A I N G A N YA : C o r r e c t . A D V K AT E H O F M E Y R : W h a t I h a v e a ls o u n d e r s t o o d y o u r e v i d e n c e t o b e i s y o u r e c o g n is e t h a t b e c a u s e o f th e e r r o r t h a t h a d b e e n i n c l u d e d in t h e c a s h fl o w s t a t e m e n t a t th e t i m e t h a t R 1 .8 m il li o n fi g u r e w o u ld h a v e t o b e r e d u c e d , c o r r e c t? M R M A R K P H A K A M I L E M A I N G A N YA : C o r r e c t . 20 A D V K AT E H O F M E Y R : A n d i t w o u ld g o d o w n to a b o u t R 1 . 8 m i ll io n , is t h a t r ig h t ? M R M A R K P H A K A M I L E M A I N G A N YA : R 1 . 1 m ill i o n . A D V K AT E H O F M E Y R : A p o lo g y fr o m R 1 . 8 to R 1 .1 , c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : S o t h e r e i s l e s s a v a i la b le c a s h t h a n i s r e c o r d e d Page 102 of 153 30 AUGUST 2019 – DAY 153 h e r e a t t h e e n d o f th e t h r e e y e a r p e r io d ? M R M A R K P H A K A M I L E M A I N G A N YA : C o r r e c t . A D V K AT E H O F M E Y R : I f t h e e r r o r h a d n o t o c c u r r e d , c o r r e c t? M R M A R K P H A K A M I L E M A I N G A N YA : C o r r e c t . A D V K AT E H O F M E Y R : W o u ld t h a t h a v e in f lu e n c e d y o u m a te r i a l ly i f y o u h a d b e e n m a k i n g t h i s d e c is i o n ? M R M A R K P H A K A M I L E M A I N G A N YA : N o b e c a u s e t h e a m o u n t o f c a s h a v a i la b le is m o r e o r l e s s e q u a l to th e o u ts t a n d i n g b a l a n c e t h e n . B e c a u s e th e r e is R 1 .1 o u t s ta n d i n g a n d t h e n t h e r e is a b a l a n c e o f c a s h 10 o f R 1 .1 . A D V K AT E H O F M E Y R : R i g h t. A n d j u s t t o c o n c lu d e t h is M r M a i n g a n y a o f c o u r s e t h a t w h o l e c a s h fl o w m o d e l d e p e n d s o n a r a n g e o f a s s u m p t io n s m a d e a f t e r t h e t h r e e y e a r s i n w h ic h t h e c o n t r a c t w h ic h h a s b e e n t e n d e r e d fo r w o u l d a p p ly, i s t h a t c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : S o y o u in a s e n s e if I c a n u n d e r s ta n d a n d m a k e s u r e w e a r e o n t h e s a m e p a g e w h e n ID C lo o k s a t it s m o d e ll in g i f t h e S A A c o n tr a c t h a d b e e n a w a r d e d o n t h e te r m s o f t h e te n d e r i t th e n h a s a r e a l is tic s e n s e a s s u m i n g p e r f o r m a n c e u n d e r th e c o n tr a c t a n d o n b o th 20 s id e s w h a t is c o m in g i n t o t h e c o m p a n y f o r t h r e e y e a r s , i s t h a t r i g h t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is r i g h t . A D V K AT E H O F M E Y R : B u t a f t e r t h o s e t h r e e y e a r s s o t h is w a s in 2 0 1 7 a ft e r 2 0 2 0 e v e r y t h in g e l s e w e s e e i n t h o s e c a s h f lo w s t a t e m e n t s a r e p r o j e c ti o n s , th e y a r e a s s u m p ti o n s , is t h a t c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s th a t i s b e y o n d t h e a c t u a l Page 103 of 153 30 AUGUST 2019 – DAY 153 c o n tr a c t. A D V K AT E H O F M E Y R : I t is . A n d y o u tr a v e r s e d w it h t h e C h a ir e a r li e r w e ll t h a t i s p a r t o f t h e r is k a s I u n d e r s ta n d it t h a t t h e I D C e v a l u a te s , C o r r e c t? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s th a t i s c o r r e c t. A D V K AT E H O F M E Y R : A n d w h a t w a s t h e b a s is f o r t h o s e a s s u m p ti o n s a n d th e fi g u r e s p u t i n t o t h e c a s h p o s it i o n o f th e b u s i n e s s th e r e a f t e r ? M R M A R K P H A K A M I L E M A I N G A N YA : S o in t h e s u b m i s s i o n th e t e a m in d i c a t e s th a t i t h a s g r o w n th e p r o j e c ti o n s b y t h e i n f l a t i o n r a te b e y o n d 10 t h e c o n tr a c t a m o n g o t h e r a s s u m p ti o n s . A D V K AT E H O F M E Y R : So would that m ean that they assume for the p u r p o s e s o f th e m o d e l t h a t w h a t h a s b e e n s e c u r e d in th e t e n d e r w i t h S A A f o r t h e t h r e e y e a r s is lik e ly t o c o n ti n u e p lu s i n fl a ti o n ? M R M A R K P H A K A M I L E M A I N G A N YA : S o t h e y a s s u m e d i n t h is o n e li k e t h e y i n d i c a t e t h a t th e s u b m is s i o n w o u ld b e f o r f iv e y e a r s a n d t h e y a l s o a s s u m e d t h a t th e c l ie n t w il l g e t o t h e r c o n tr a c ts o n t e r m i n a t io n o f t h e SAA contract. A D V K AT E H O F M E Y R : A n d c o n t r a c ts o f a s i m il a r v a l u e , c o r r e c t? M R M A R K P H A K A M I L E M A I N G A N YA : 20 N o n o t r e a l ly c o n tr a c ts fr o m d i ff e r e n t o th e r s u p p li e r s n o t n e c e s s a r il y o f a s i m i la r v a lu e . A D V K AT E H O F M E Y R : B u t if y o u a r e a n d c o r r e c t m e i f I a m w r o n g b u t if y o u a r e i n c r e a s in g o ff a b a s e f o r i n fl a ti o n y o u a r e a s s u m i n g t h a t b a s e r e m a in s th e s a m e t h e r e a f t e r w h ic h w o u l d a s s u m e a s i m il a r v a l u e o f c o n tr a c t b e i n g o b ta i n e d e ls e w h e r e w o u ld it n o t ? M R M A R K P H A K A M I L E M A I N G A N YA : O r m o r e o r l e s s . Page 104 of 153 30 AUGUST 2019 – DAY 153 A D V K AT E H O F M E Y R : I n d e e d b u t … M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : They put a figure in and a I understand the fi g u r e a s s u m e s a c o n ti n u a ti o n o f th e s a m e c a s h r e c e i p t o v e r ti m e a s w a s s e c u r e d f o r t h e th r e e y e a r s p l u s i n fl a ti o n ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s s o t h a t t h e y s t a r t a t th e b a s e a n d p u t s o m e g r o w t h a s s u m p t io n s o n th e c o m p a n y a n d th e y in d i c a t e i n th e s u b m is s io n s w h i c h o th e r p r o s p e c t t h a t t h e c l ie n t w a s p u r s u i n g a n d t h e y m o d e l a s s u m p ti o n s b a s e d o n th a t . 10 A D V K AT E H O F M E Y R : T h a n k y o u . Th e s e c o n d a s p e c t t h a t I a s k e d f o r y o u to lo o k a t o v e r th e b r e a k r e l a te d t o w h e th e r t h e r e w a s a n y r e fe r e n c e t o t h e ju s t i fi c a t io n f o r E M S E P f u n d i n g a s b e i n g th e v a l u e a d d t h a t E M L w o u ld b r i n g a n d y o u d r e w m y a t te n ti o n in th e s a m e v o lu m e C h a ir t o p a g e 2 2 2 . C H A I R P E R S O N : I h a v e g o t i t. A D V K AT E H O F M E Y R : A n d Mr M a i n g a n y a I h a d i n tr o d u c e d t h a t q u e s t io n o n th e b a s is th a t I h a d n o t s e e n a r e fe r e n c e t o v a l u e a d d a s t h e j u s t if ic a ti o n f o r t h e E M S E P a p p r o v a l o r q u a l if ic a ti o n in t h is s u b m is s io n . W h a t y o u h a v e d r a w n m y a t t e n ti o n t o is r ig h t a t t h e b o t to m 20 o f t h a t p a g e 2 2 2 w h e r e th e r e is a r e f e r e n c e t o t h e a p p r o a c h th a t A C S A A ir p o r t s C o m p a n y S o u t h A fr ic a ta k e s to p e o p l e i n t h e p o s i ti o n l ik e E M L w o u ld h a v e b e e n in it s c o n tr a c t w i t h S A A , i s t h a t c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : C o r r e c t . A D V K AT E H O F M E Y R : A n d w h a t i t r e c o r d s th e r e i s A C S A s e e s t h r o u g h p u t t e r s . C h a ir y o u w il l r e m e m b e r t h a t p h r a s e o f t h r o u g h p u t t e r fr o m t h e Page 105 of 153 30 AUGUST 2019 – DAY 153 e v i d e n c e o f M r Va u g h a n . The real essence of it was that a company lik e E M L w a s g o in g t o p u r c h a s e t h e fu e l fr o m o n e o f th e b ig – th e o il m a jo r s To t a l e tc e t e r a a n d th e n w a s g o i n g to u ti lis e t h e p i p e l in e a t t h e r e l e v a n t a ir p o r t a s a t h r o u g h p u t te r to t h e n p r o v i d e t h a t f u e l p l u s a m a r g in t h a t S A A w o u l d p a y in t o t h e a ir c r a f t. Is th a t c o n s is t e n t w it h y o u r u n d e r s t a n d i n g o f t h r o u g h p u t te r s t a t u s ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : Th a n k y o u . S o w h a t is r e c o r d e d h e r e i s A C S A s e e s th r o u g h p u t t e r s a s a v a lu e a d d t o t h e p r o c e s s a s t h e y w i ll b e 10 s o u r c in g th e fu e l , p u r c h a s i n g t h e f u e l , tr a n s p o r t i n g t h e fu e l, s t o r in g th e f u e l a n d t e s t in g th e f u e l b e f o r e i t is p u t i n t o t h e p la n e s . Yo u a n d I m i g h t h a v e b e e n a t c r o s s p u r p o s e s i n s o f a r a s I w a s i n t e r e s t e d i n it b e i n g p r e s e n t e d a s th e j u s t if ic a ti o n f o r th e E M S E P q u a l if ic a ti o n in t h i s s u b m is s io n . D o y o u k n o w w h e t h e r t h is i s w h a t M r K o b e n a t o o k i n t o a c c o u n t w h e n h e i n d ic a t e d t o y o u w h e n y o u fo ll o w e d u p w i th h i m a b o u t t h is t o p i c th a t t h e r e w a s a v a l u e a d d t h a t E M L w a s g o in g t o b e c o n tr i b u t i n g ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . So in one of the c o r r e s p o n d e n c e a n d a l s o i n t h e i n v e s ti g a t io n t h a t w e w i ll t a lk a b o u t i t 20 does draw reference to that. A D V K AT E H O F M E Y R : To th is . M R M A R K P H A K A M I L E M A I N G A N YA : T h a t w a s i n d ic a t e d i n th e s u b m is s io n . A D V K AT E H O F M E Y R : Th a n k y o u . D o y o u h o ld t h e s a m e v ie w t h a t i t is a v a lu e a d d a s u n d e r s to o d u n d e r t h e E M S E P p r o g r a m w h e n a n e n ti ty Page 106 of 153 30 AUGUST 2019 – DAY 153 p u r c h a s e s f u e l fr o m o n e o f th e o i l m a jo r s a n d e n te r s i n to a n a r r a n g e m e n t to th e n p u t i t i n t o t h e a ir c r a f t t h e r e a f te r. Is t h a t th e s o r t o f v a l u e a d d t h a t E M S E P i s i n t e r e s te d i n ? M R M A R K P H A K A M I L E M A I N G A N YA : S o I w o u l d u n d e r s t a n d th a t th e c li e n t d o e s n o t j u s t s i m p l y t a k e a n d p u t h e d o e s s o m e th in g s o i n th e s u b m is s io n t h e r e is a q u a n ti f ic a ti o n o f w h a t t h a t v a l u e a d d a m o u n t t o b u t I d o n o t k n o w i f i t is s u ff ic ie n t t o q u a li f y f o r E M S E P p u r p o s e s . ADV K AT E HOFMEYR: If it was s i m p ly purchasing the fuel, tr a n s p o r t in g i t , u s in g t h e p ip e l i n e a n d p u t ti n g i t in t o t h e p l a n e i s t h a t 10 t h e s o r t o f t h i n g t h a t y o u t h i n k w o u ld q u a li f y a s a v a l u e a d d ? M R M A R K P H A K A M I L E M A I N G A N YA : N o I w o u ld n o t t h in k t h a t is value add. A D V K AT E H O F M E Y R : T h a n k y o u . S o r r y, a p o l o g i e s I h a v e t a k e n t w o fi le s . I f w e c a n t h e n g o b a c k in y o u r a ff id a v it M r M a in g a n y a a n d m y h o p e is C h a ir t h a t t h e r e a r e n o t t o o m a n y t o p ic s to s ti ll d e a l w i t h w i t h M r M a i n g a n y a s o w e l o o k o n g o o d t e r m s t o c o m p l e te t h is a f te r n o o n . I w o u ld li k e t o p ic k i t u p a t p a g e 6 if w e m a y ? M r M a in g a n y a t h a t i s i n D D 1 3 a . A n d i t i s u n d e r t h e h e a d in g o n th a t p a g e i n b o l d 4 .4 R e q u e s t t o r e p l a c e th e S A A c o n tr a c t w i t h S A E x p r e s s S O C L i m i te d . 20 Now Mr M a in g a n y a f o r t h i s p o in t I d o n o t w a n t t o h a v e y o u m o v e b a c k a n d f o r w a r d b e t w e e n fi le s u n le s s i t i s n e c e s s a r y b e c a u s e t h e d o c u m e n t I a m g o i n g t o r e f e r t o n o w is o n e w e h a v e l o o k e d a t b e f o r e a n d I j u s t n e e d t o q u o t e fr o m i t . But if at any point you want to go and look at the d o c u m e n t f e e l fr e e t o te ll m e t h a t . I t w a s i n th e c o n d i ti o n s p r e c e d e n t o f t h e d e c is i o n i n Fe b r u a r y 2 0 1 7 t h a t a r e q u ir e m e n t t h a t th e r e b e a s ig n e d Page 107 of 153 30 AUGUST 2019 – DAY 153 a g r e e m e n t w i t h S A A w a s s ti p u l a t e d a n d I ju s t w a n t to r e a d h o w i t w a s fr a m e d i n t h a t c o n d i t io n p r e c e d e n t . I t s a i d : “ A s i g n e d o ff t a k e a g r e e m e n t b e t w e e n E M L E n g i n e e r s a n d C o n s tr u c t io n a n d S o u t h A f r ic a n A ir w a y s w it h th e t e r m s t o – t h e I D C ’s s a t is f a c ti o n . ” D o y o u r e c a l l t h a t? M R M A R K P H A K A M I L E M A I N G A N YA : I d o . A D V K AT E H O F M E Y R : S o w h e n t h is w a s a p p r o v e d g iv e n e v e r y t h in g w e h a v e tr a v e r s e d p r e v io u s ly i n y o u r e v id e n c e a s I u n d e r s t a n d i t a t th a t 10 point the tender had not been awarded, correct? M R M A R K P H A K A M I L E M A I N G A N YA : C o r r e c t . A D V K AT E H O F M E Y R : So as I understood your evidence it was a p r o t e c t io n f o r t h e I D C to s a y w e ll i t i s a c o n d i ti o n p r e c e d e n t o f a l l o f t h e s e a g r e e m e n t s b o t h l o a n s a n d t h e g u a r a n t e e fa c i li ty t h a t th e r e m u s t b e a s i g n e d a g r e e m e n t b e tw e e n E M L a n d S A A w it h te r ms t o t h e I D C ’s s a ti s f a c t io n , C o r r e c t? M R M A R K P H A K A M I L E M A I N G A N YA : C o r r e c t . A D V K AT E H O F M E Y R : R i g h t t h e n a s I u n d e r s t a n d y o u r a ff i d a v i t t h a t d o e s n o t m a t e r ia li s e t h a t c o n tr a c t , is t h a t r ig h t? 20 M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : S o t h e n w h a t h a p p e n s ? M R M A R K P H A K A M I L E M A I N G A N YA : So around the 26 July the b a s ic s a n d c h e m ic a l s te a m r e q u e s te d a n a m e n d m e n t t o t h e a p p r o v a l o f t h e c o n d i t io n s s e t b y t h e s p e c i a l g r a d e c o m m i t t e e . A m e n d m e n ts t h a t a r e r e q u e s t e d b y tr a n s a c ti o n t e a ms a r e p r e s e n t e d i n th e fo r m o r a Page 108 of 153 30 AUGUST 2019 – DAY 153 m e m o r a n d u m a d d r e s s e d t o t h e p o s t i n v e s t m e n t c o m m i t t e e w h ic h i s c o m p r is e d o f t h e d i v i s i o n a l e x e c u ti v e d ir e c t ly r e s p o n s ib l e f o r t h e tr a n s a c ti o n . T h e d iv is i o n a l e x e c u tiv e r e s p o n s i b l e f o r tr a n s a c ti o n s u p p o r t a n d p o s t in v e s t m e n t m a n a g e m e n t . T h e C h ie f R is k o ffi c e r a n d t h e g e n e r a l c o u n c il . T h e p o s t i n v e s t m e n t c o m m i t te e a b b r e v ia t e d P I C d o e s n o t u s u a ll y s i t a s a c o m m i t t e e a n d d o e s n o t h a v e a c h a ir p e r s o n a s e a c h m e m b e r c o n s i d e r s t h e r e q u e s t e d a m e n d m e n t i n d e p e n d e n tly a n d in d i c a t e s h i s o r a p p r o v a l o r o b j e c ti o n . A D V K AT E H O F M E Y R : If w e c o u l d ju s t s t o p th e r e M r M a i n g a n y a . Yo u 10 in d i c a t e d t h a t e a r li e r in y o u r e v id e n c e to d a y t h a t y o u d o n o t c o n v e n e a s a committee and that it is done on an almost round robin basis and I s a i d t o y o u in t h a t e v id e n c e w h e n it b e c a m e r e l e v a n t I h a d a s k y o u i n r e l a ti o n t o th is d e c is i o n w h e r e t h e s u b m is s io n w a s m a d e o n t h e 2 6 J u ly 2 0 1 7 w h e th e r y o u r e c a l l h o w s o o n a f t e r t h a t s u b m is s i o n w a s r e c e i v e d t h e d e c i s i o n w a s ta k e n ? M R M A R K P H A K A M I L E M A I N G A N YA : I d o n o t r e c a l l e x a c t ly. A D V K AT E H O F M E Y R : W o u l d i t h a v e b e e n a m a t te r o f d a y s i n a l l lik e l i h o o d ? M R M A R K P H A K A M I L E M A I N G A N YA : 20 So some members could have a p p r o v e d i t o n th e s a m e d a y, s o m e a d a y o r t w o la t e r. A D V K AT E H O F M E Y R : I n d e e d b u t w e a r e n o t t a lk in g a b o u t m o r e t h a n a w e e k o r s o , is th a t fa ir ? M R M A R K P H A K A M I L E M A I N G A N YA : N o . A D V K AT E H O F M E Y R : T h a n k y o u . I n o t h e r w o r d s y e s y o u a g r e e ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s I a g r e e . Page 109 of 153 30 AUGUST 2019 – DAY 153 A D V K AT E H O F M E Y R : I t i s j u s t th e r e c o r d d o e s n o t a l w a y s r e fl e c t th e m a n n e r in w h i c h y o u h a v e i n d i c a t e d t h e a n s w e r. M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. A D V K AT E H O F M E Y R : T h a n k y o u . S o s h o r tl y a f t e r t h e 2 6 J u ly 2 0 1 7 a d e c is i o n w a s m a d e a n d w h a t d e c i s i o n w a s t h a t ? M R M A R K P H A K A M I L E M A I N G A N YA : S o t h e d e c i s i o n w a s t o a g r e e t o t h e r e q u e s te d a m e n d m e n t t h a t i n s te a d o f t h e S A A c o n tr a c t t h e S A A E x c o n tr a c t w o u l d b e u s e d a t t h e o ff t a k e . Th a t i s [ in d is ti n c t ] . A D V K AT E H O F M E Y R : 10 O k a y. Thank you. So now we have a s u b s t a t i o n o f f u n d i n g t h a t w a s p r e m is e d o n a S A A c o n tr a c t b e i n g r e p l a c e d b y a S A A E x p r e s s c o n tr a c t , c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : C o r r e c t . A D V K AT E H O F M E Y R : I w o u ld l ik e t o g o t o t h a t a c tu a l s u b m is s i o n b e c a u s e t h e a s p e c ts o f i t th a t w e d o j u s t n e e d t o t r a v e r s e . Yo u w il l f i n d t h a t i n D D 1 3 c a n d i t c o m m e n c e s a t p a g e 6 3 1 . M r M a i n g a n y a y o u w il l b e in fi le c . M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. Fi l e C . A D V K AT E H O F M E Y R : At page 631. Thank you. C a n y o u c o n fi r m w h a t d o c u m e n t th a t i s a t p a g e 6 3 1 ? 20 M R M A R K P H A K A M I L E M A I N G A N YA : S o it is a m e m o r a n d u m a d d r e s s e d to t h e p o s t i n v e s t m e n t c o m m i t t e e . I t is fr o m t h e b a s i c s a n d s p e c i a li ty c h e m ic a ls b u s i n e s s u n i t . I t s r e f e r e n c e i t is f o r E M L E n g i n e e r i n g a n d C o n s tr u c ti o n . A D V K AT E H O F M E Y R : Th a n k y o u . A n d i s t h is a s u b m is s i o n t h a t y o u h a v e b e e n d is c u s s i n g t h e y w e n t t h e p o s t i n v e s t m e n t c o m m i t te e to Page 110 of 153 30 AUGUST 2019 – DAY 153 c h a n g e t h e fu n d i n g fr o m a S A A c o n t r a c t t o a S A E x p r e s s c o n tr a c t ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . C o r r e c t . A D V K AT E H O F M E Y R : Th a n k y o u . A n d t h e n i f y o u j u s t g o to p a g e 6 3 4 it is a fe w p a g e s o n . Under the – the last table on that page where t h e r e i s c a p it a l le t t e r s A P P R O V E D a h e a d o f i t. I s e e th e r e i n t h e t h ir d li n e t h e c h ie f r is k o ffi c e r i d e n ti f ie d , is t h a t y o u ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : A n d s o th a t is y o u r s ig n a tu r e ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. 10 A D V K AT E H O F M E Y R : S o y o u w e r e p a r t o f t h e g r o u p th a t a p p r o v e d t h is c h a n g e fr o m t h e S A A c o n tr a c t to th e S A E x p r e s s c o n t r a c t , is th a t r ig h t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : A n d th is o c c u r r e d ju s t a fe w m o n t h s – a f e w d a y s a f t e r th e 2 6 J u ly 2 0 1 7 , c o r r e c t? M R M A R K P H A K A M I L E M A I N G A N YA : C o r r e c t . A D V K AT E H O F M E Y R : I w o u ld l ik e to l o o k a t t h e a c t u a l w o r d i n g t h a t w a s u s e d in t h is r e q u e s t t o t h e c o m m i t t e e o f w h i c h y o u w e r e a m e m b e r a n d y o u w i ll f in d t h a t a t p a g e 6 3 3 . Yo u w ill s e e t h e r e t h a t th e r e q u e s t 20 u n d e r 1 if y o u c o u l d r e a d t h a t f o r u s . W h a t is th e fir s t r e q u e s t t h a t th e b u s i n e s s u n i t m a k e s to y o u r c o m m i t t e e ? M R M A R K P H A K A M I L E M A I N G A N YA : I t i s r e q u e s te d t h a t t h e I D C c o n s e n t to c h a n g e N C P t o a ll o w E M L t o d r a w f u n d i n g b a s e d o n t h e S A E x a w a r d l e t t e r. A D V K AT E H O F M E Y R : A n d th e n u n d e r 2 . Page 111 of 153 30 AUGUST 2019 – DAY 153 M R M A R K P H A K A M I L E M A I N G A N YA : I t is r e q u e s te d t h a t t h e fir s t drawdown be changed from 6 August 2017 to 30 September 2017. A D V K AT E H O F M E Y R : So that was to push the drawdown date out s li g h t ly, i s t h a t r i g h t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : O k a y I w o u ld li k e t o f o c u s a b i t o n p o i n t 1 t h o u g h b e c a u s e y o u w i ll c o r r e c t m e i f I a m w r o n g b u t t h is is a r e q u e s t a s I r e a d i t t h a t t h e r e b e a c o n s e n t t o c h a n g e t h e c o n d i t io n p r e c e d e n t t h a t is t h e c o n d i ti o n p r e c e d e n t t h a t w e s a w p r e v i o u s l y r e l a t e d t o t h e 10 n e e d f o r a s ig n e d a g r e e m e n t b e t w e e n S A A a n d E M L o n t e r m s s a ti s f a c t o r y t o th e I D C t o a t e r m w h i c h n o w s ti p u l a te s t h a t E M L w il l b e a l lo w e d t o d r a w f u n d i n g b a s e d o n th e S A E x p r e s s a w a r d l e t t e r. D o y o u r e g a r d a n a w a r d le t t e r a s b e i n g d i ffe r e n t to a c o n tr a c t ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s i t i s . A D V K AT E H O F M E Y R : So why would the request be being made to a l lo w fu n d i n g p u r e ly o n th e b a s is o f a n a w a r d l e t te r in c ir c u m s ta n c e s w h e r e p r e v io u s ly i t h a d b e e n o f s o m e i m p o r ta n c e a s I u n d e r s t o o d y o u r e v i d e n c e t o th e ID C t h a t t h e y a c t u a l ly h a d a s i g n e d c o n tr a c t i n p la c e . M R M A R K P H A K A M I L E M A I N G A N YA : 20 No. S o t h i s m e m o r a n d u m is r e q u e s t in g th e c h a n g e f r o m S A A t o S A E x p r e s s a n d in s u p p o r t f o r th a t i t is i n d i c a t in g t h a t h e r e i s a n a w a r d l e t te r fr o m S A E x p r e s s . S o – s o I think if we – if we go to page 632. A D V K AT E H O F M E Y R : T h a t i s t h e p a g e b a c k y e s . M R M A R K P H A K A M I L E M A I N G A N YA : t h i n k t h a t p a r a g r a p h a f t e r i te m 3 . T h a t is th e p a g e b a c k . So I So which says as part of the Page 112 of 153 30 AUGUST 2019 – DAY 153 a p p r o v a l p r o c e s s c o n d i t io n p r e c e d e n t 6 . 1 .7 o f t h e g u a r a n te e f a c il i ty w a s f o r E M L to o b t a i n a s i g n e d o ff t a k e a g r e e m e n t fr o m S A A L i m it e d . S o i t is th a t c o n d it i o n t h a t i s r e q u e s te d b e i n g c h a n g e d . A D V K AT E H O F M E Y R : C o r r e c t . M R M A R K P H A K A M I L E M A I N G A N YA : S o i t r e m a i n s a C P b u t i n s te a d o f t h e c o n tr a c t b e i n g S A A t h e c o n tr a c t b e c o m e S A E x p r e s s . S o – s o i f y o u r e a d i t e m n u m b e r 4 i t d o e s n o t m e a n t h a t o n a w a r d p a y m e n t w il l h a p p e n b e c a u s e t h e C P w i ll n o w r e a d w e m u s t g e t a n o ff t a k e fr o m S A E x p r e s s . I t i s n o t s a y i n g b a s e d o n th is l e t te r w e c a n p a y. I t i s s a y i n g 10 b a s e d o n t h i s l e t t e r c a n w e c h a n g e t h e c o n d i ti o n . A D V K AT E H O F M E Y R : Is th a t h o w y o u u n d e r s t o o d th is d o c u m e n t a t t h e ti m e ? MR M A R K P H A K A M I L E M A I N G A N YA : Ye s . Ye s t h a t is h o w I u n d e r s t o o d it . A D V K AT E H O F M E Y R : B e c a u s e c a n I s a y t o y o u th a t l a n g u a g e is n o t r e a d il y a p p a r e n t t o m e c e r t a i n l y a s a n o u t s id e r e a d e r o f t h i s . A n d th e r e a s o n is b e c a u s e w h e n t h i s d o c u m e n t t a lk s a b o u t th e c h a n g e it t a lk s a b o u t a c h a n g e a n d o n l y e v e r m a k e s r e f e r e n c e to a n a w a r d l e tt e r t h a t h a s b e e n r e c e iv e d fr o m S o u t h A f r ic a n Ex p r e s s . D o y o u a c c e p t t h a t ju s t 20 in t e r m s o f th e w o r d s ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s , y e s . No I can u n d e r s t a n d b u t in s u p p o r t o f w h a t I a m s a y i n g i t i s f a c tu a l t h a t u p o n t h is c h a n g e b e i n g m a d e th e c l i e n t s t a r te d r e q u e s ti n g p a y m e n t a n d o u r t e a m s a n d l e g a l t e a m s a i d n o w e c a n n o t p a y y o u w e s t il l c o n tr a c t fir s t. need the S o t h a t is m y u n d e r s t a n d i n g i t is j u s t c h a n g i n g th e Page 113 of 153 30 AUGUST 2019 – DAY 153 c o n d i ti o n . D i s b u r s e m e n ts c o u l d n o t h a p p e n o n th e b a s is o f t h is l e t te r. A D V K AT E H O F M E Y R : A n d d o y o u u n d e r s t a n d t h e p o s i ti o n t o b e t h a t a t 2 7 o r c a l l i t 2 9 J u ly w h e n t h e a p p r o v a l w a s g i v e n t h e I D C h a d n o t y e t seen the agreement? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s a t t h a t p o i n t a n d i t is n o t there – the agreement. A D V K AT E H O F M E Y R : T h e r e i s o n l y t h e a w a r d le t t e r ? M R M A R K P H A K A M I L E M A I N G A N YA : T h e r e i s o n l y t h e a w a r d le t t e r. A D V K AT E H O F M E Y R : I s t h a t r i g h t ? 10 M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is r i g h t . A D V K AT E H O F M E Y R : A n d l e t u s ju s t g o to t h a t a w a r d l e t te r b e c a u s e it is a f e w p a g e s o n i t i s a t 6 3 5 . M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : I s t h a t t h e a w a r d l e tt e r t h a t y o u r e f e r t o ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s t h is is t h e o n e t h a t w a s a tt a c h e d t o th is m e m o r a n d u m . A D V K AT E H O F M E Y R : A n d I u n d e r s ta n d y o u r e v i d e n c e to b e th is y o u u n d e r s t a n d is n o t a c o n tr a c t b u t – a n d y o u a ls o – y o u r e v id e n c e i s t h a t a s a t t h i s d a te t h e I D C h a d n o t s e e n a c o n t r a c t , c o r r e c t ? 20 M R M A R K P H A K A M I L E M A I N G A N YA : C o r r e c t . A D V K AT E H O F M E Y R : B u t t h e r e a f t e r i t w a s o b t a i n e d , is t h a t c o r r e c t? M R M A R K P H A K A M I L E M A I N G A N YA : C o r r e c t . A D V K AT E H O F M E Y R : A n d d is b u r s e m e n t s w e r e m a d e o n l y a ft e r i t w a s obtained, correct? M R M A R K P H A K A M I L E M A I N G A N YA : C o r r e c t . Page 114 of 153 30 AUGUST 2019 – DAY 153 A D V K AT E H O F M E Y R : W e r e i ts te r ms i n t e r r o g a t e d a t a ll b y t h e t e a m in t h e I D C ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s I s p o k e t o t h e l e g a l t e a m t h e y i n d ic a te d th a t th e y d i d r e v i e w th e c o n tr a c t . A D V K AT E H O F M E Y R : D i d th e y e n g a g e w i t h S o u t h A fr ic a n E x p r e s s a t a l l a b o u t i t lik e th e y h a d e n g a g e d w i t h S A A p r e v i o u s l y ? M R M A R K P H A K A M I L E M A I N G A N YA : N o t h e y d id n o t . A D V K AT E H O F M E Y R : B e c a u s e a s I u n d e r s t a n d i t fr o m M r R a m a ’s a ffi d a v i t a n d c o r r e c t m e i f I a m w r o n g t h e r e i s n o s e c o n d d u e d il i g e n c e 10 t h a t i s d o n e w h e n a c h a n g e o f t h i s n a t u r e o c c u r s , is th a t r i g h t? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s th e r e is n o s e c o n d d u e d i li g e n c e i n th e s e n s e o f r e s t a r ti n g t h e p r o c e s s b u t th e y s ti ll r e q u e s te d t o d o d il ig e n c e o n th e t e r m s t h a t h a v e c h a n g e d . A D V K AT E H O F M E Y R : R i g h t i f w e a t 6 3 5 t h e o n e th i n g I ju s t w a n t t o p r o b e w it h y o u th e r e is i f a d u e d i li g e n c e i s n o t d o n e w h e n a c h a n g e o f t h is n a tu r e t a k e s p l a c e I a s s u m e in t e r r o g a ti n g t h e p r e s c r ib e d l it r e s o f f u e l t h a t w e r e g o i n g to b e p r o c u r e d fr o m E M L w o u l d n o t h a v e b e e n in t e r r o g a t e d a t a ll w o u ld i t? M R M A R K P H A K A M I L E M A I N G A N YA : S o w i th r e g a r d t o t h a t t h e te a m 20 in d i c a t e d in t h e s u b m is s i o n th a t b a s e d o n th e s e l it r e s t h e n th e y r e d i d t h e f in a n c i a l m o d e ls th a t w e h a v e b e e n d i s c u s s i n g a n d th e n r e - v e r i f ie d t h e s u p p o r t in g p r i c e s to t h o s e li tr e s t o te s t i f t h e c l ie n t w o u l d b e a b l e to m a k e s u s t a i n a b l e i n c o m e fr o m t h is n e w c o n tr a c t. S o t h a t i s t h e e x te n t o f t h e i n t e r r o g a ti o n t h a t th e y d i d i n c h e c k in g th a t w h a t th e c l i e n t b i d w a s s u p p o r te d b y r e a s o n a b l e p r ic e s fr o m th e s u p p li e r s a n d t h e n t h e y Page 115 of 153 30 AUGUST 2019 – DAY 153 u s e t h o s e li tr e s t o d o a n e w m o d e l a n d b a s e d o n t h a t th e y in d i c a t e d in t h e m e m o r a n d u m t h a t b a s e d o n t h e m o d e l t h e c li e n t w o u l d s t il l b e a b le t o a ff o r d t h e f a c il i ti e s t h a t w e r e g r a n t e d . A D V K AT E H O F M E Y R : A n d i n fa ir n e s s Mr M a in g a n y a t o t h e I D C I e x p e c t i n th is p r o c e s s y o u a r e n o t o n t h e lo o k o u t f o r fr a u d u le n t c o n tr a c ts b e in g c o n c l u d e d w i t h s ta t e o w n e d e n ti t ie s a r e y o u ? M R M A R K P H A K A M I L E M A I N G A N YA : I t i s a r is k t h a t is a l w a y s th e r e in t h e c u r r e n t e n v ir o n m e n t s o h e n c e t h e l e g a l s c r u t in y m u s t d o reasonable processes. 10 A D V K AT E H O F M E Y R : I n d e e d . M R M A R K P H A K A M I L E M A I N G A N YA : To s a ti s f y i ts e l f th a t th e c o n tr a c t t h a t i s p r e s e n t e d t o t h e m is v a l i d a n d t h a t is t h e li n e b e t w e e n d o i n g f o r e n s ic p r o c e s s o n t h e c o n t r a c t v e r s u s d o i n g r e a s o n a b l e m e a s u r e s to c h e c k w h a t y o u g e t ti n g c o u ld b e fr o m a r e l i a b l e i n s ti t u ti o n . A D V K AT E H O F M E Y R : I n d e e d . M R M A R K P H A K A M I L E M A I N G A N YA : S o w e h a v e t o t h in k a b o u t th e r is k o f f r a u d w h e n w e d o th a t . A D V K AT E H O F M E Y R : O h t h e r e a s o n I r a is e i t M r M a in g a n y a a n d t h is is n o t e v i d e n c e I a s s u m e o f w h i c h t h e I D C w a s a w a r e a t th e ti m e b u t 20 t h e 8 m il li o n l i tr e s t h a t w e r e g o i n g t o b e p r o v i d e d a c c o r d i n g t o t h is le t t e r o f a w a r d t o P il a n e s b u r g a ir p o r t t h e c o m m is s i o n h a s r e c e iv e d e v i d e n c e w a s w il d l y i n e x c e s s o f th e n u m b e r o f l it r e s t h a t a ir p o r t w o u l d e v e r n e e d a n n u a ll y b u t I a s s u m e t h a t w a s n o t k n o w n t o t h e I D C a t t h e ti m e ? M R M A R K P H A K A M I L E M A I N G A N YA : N o I d i d n o t k n o w i t . Page 116 of 153 30 AUGUST 2019 – DAY 153 A D V K AT E H O F M E Y R : A n d t h e p r o c e s s o f r e v ie w t h a t w a s u n d e r ta k e n d i d n o t r e v e a l th a t? M R M A R K P H A K A M I L E M A I N G A N YA : N o it d i d n o t . A D V K AT E H O F M E Y R : Thank you. And then if we could go Mr M a in g a n y a b a c k in t o y o u r a ff id a v i t. M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : A n d w e w il l p ic k i t u p a t p a g e 8 i f w e c a n . A t p a g e 8 t h e h e a d i n g b e g i n s 4 . 5 d r a w d o w n s p a i d d ir e c t ly t o E M L . D o y o u s e e t h a t? 10 M R M A R K P H A K A M I L E M A I N G A N YA : Ye s I d o . A D V K AT E H O F M E Y R : Mr M a i n g a n y a I k n o w a t t h e t i m e y o u m a y n o t h a v e b e e n a w a r e o f a p a r t ic u l a r in v o ic e fo r a c o n s u lt a n t th a t w a s in c l u d e d w h e n t h e d r a w d o w n s w e r e s o u g h t b y E M L fr o m t h e I D C b u t y o u h a v e s e e n M r R a m a ’s a ffi d a v i t b e f o r e . H a v e y o u n o t ? M R M A R K P H A K A M I L E M A I N G A N YA : I h a v e . A D V K AT E H O F M E Y R : C a n y o u a s s i s t u s w i th w h a t th a t p a r ti c u l a r in v o ic e i n t h e o r d e r o f 1 . 5 m i ll io n th a t w a s s u b m i t te d to t h e I D C in r e s p e c t o f th e d r a w d o w n r e l a t e d t o ? M R M A R K P H A K A M I L E M A I N G A N YA : Th a t i n v o i c e r e l a t e d to a f e e fo r 20 c o n s u l t in g s e r v ic e s t h a t w a s in v o ic e d b y a n e n ti ty c a ll e d M a m e la P r o p e r ty Tr u s t t o E M L . A D V K AT E H O F M E Y R : A n d w h a t w e r e t h e s e r v i c e s t h a t w e r e a ll e g e d t o h a v e b e e n p e r fo r m e d f o r th a t i n v o i c e ? M R M A R K P H A K A M I L E M A I N G A N YA : S o it w a s a ll e g e d th a t M a m e l a P r o p e r ty Tr u s t h a d a s s is te d th e c l i e n t i n c o m p i li n g i ts b u s in e s s p l a n Page 117 of 153 30 AUGUST 2019 – DAY 153 a n d g e t ti n g fu n d i n g fr o m t h e I D C . A D V K AT E H O F M E Y R : L e t u s g o to th a t i n v o i c e i f w e m a y. Yo u w il l fi n d i t i n D D 1 3 B a n d i t i s a t p a g e 4 - 5 - 6 . M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : Is t h i s t h e i n v o ic e th a t w e w e r e s p e a k i n g a b o u t? M R M A R K P H A K A M I L E M A I N G A N YA : C o r r e c t . A D V K AT E H O F M E Y R : A n d w h o i s i t fr o m a n d to ? M R M A R K P H A K A M I L E M A I N G A N YA : 10 It is addressed to EML E n g i n e e r s a n d C o n s tr u c ti o n . I t s a y s - i t is fr o m M a m e l a P r o p e r ty Tr u s t . A D V K AT E H O F M E Y R : A n d th e d a t e o f t h e i n v o i c e w h a t i s t h a t? M R M A R K P H A K A M I L E M A I N G A N YA : 3 J u ly 2 0 1 7 . A D V K AT E H O F M E Y R : A n d th e c o n ta c t p e r s o n o n t h e in v o ic e ? M R M A R K P H A K A M I L E M A I N G A N YA : I t is E d d i e K o m a n e . A D V K AT E H O F M E Y R : T h a t n a m e c a m e u p e a r li e r to d a y. D id i t n o t? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . T h a t is c o r r e c t . H e is th e o n e w h o r e fe r r e d t h e b u s i n e s s p l a n t o - to M r Bi ll y C o b b i n a h . A D V K AT E H O F M E Y R : Th a t w a s b a c k i n t h e m id d le o f 2 0 1 6 . Is that r ig h t ? 20 M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : S o h is n a m e a p p e a r s h e r e a g a i n o n a n i n v o ic e a n d w h a t w a s t h e w o r k f o r w h ic h t h is in v o ic e o f R 1 . 5 m il li o n w a s raised? M R M A R K P H A K A M I L E M A I N G A N YA : I t s a y s s c o p e o f w o r k f a c i li t a ti o n o r r a is in g o f f u n d i n g fr o m t h e I n d u s tr i a l D e v e l o p m e n t C o r p o r a ti o n o f Page 118 of 153 30 AUGUST 2019 – DAY 153 S o u th A fr ic a . A D V K AT E H O F M E Y R : S o w h a t is y o u r u n d e r s t a n d in g o f t h i s i n v o i c e b e i n g f o r w a r d e d t o t h e I D C a s j u s ti f ic a ti o n fo r a d r a w d o w n o n i ts f a c i li t ie s ? M R M A R K P H A K A M I L E M A I N G A N YA : S o t h is - t h is i n v o ic e n e v e r f e a t u r e d i n a n y o f t h e f u n d in g r e q u e s t s t h a t w e r e m a d e b y th e c l ie n t . S o i t b e c a m e a p p a r e n t to t h e ID C o n ly a t t h e t i m e w h e n th e c l ie n t w a s r e q u e s t in g d is b u r s e m e n t s fr o m th e I D C . A t th a t p o i n t in ti m e w h e n a c li e n t r e q u e s ts d i s b u r s e m e n ts w e r e q u e s t t h a t t h e y in c l u d e s u p p o r t in g 10 d o c u m e n t a ti o n a s t o w h a t t h e m o n e y w ill b e s p e n t o n . S o a s y o u w i ll s e e in - i n M r R a m a ’s t e s t i m o n y h e in d ic a t e s t h a t a t t h a t t i m e a m o n g t h e i n v o ic e s s u b m i t te d b y t h e c li e n t w a s t h is in v o ic e a t w h i c h p o i n t h e s a y s h e in d ic a t e d t o t h e c l ie n t th a t th is w ill n o t b e p a i d fr o m t h e I D C b e c a u s e a t n o p o in t i n ti m e w a s th e I D C m a d e a w a r e th a t t h e r e is t h e s e s e r v i c e s a n d t h e I D C d i d n o t b u d g e t f o r t h is s e r v ic e . T h e r e f o r e h e i n d ic a t e d t o t h e c l ie n t th a t th is i n v o i c e m u s t n o t be paid by the IDC. S o t h e n t h e c li e n t s u b m i tt e d i n v o i c e s e x c l u d i n g t h is o n e w h ic h i s f o r e q u ip m e n t a n d w o r k i n g c a p i ta l . 20 C H A I R P E R S O N : S o t h is in v o ic e w a s i t - w e ll I s e e th a t i t - i t s e e m s t o b e a d d r e s s e d t o E M L b u t I h e a r y o u ta lk a s i f i t w a s d ir e c t e d a t ID C o r d i d I m i s u n d e r s ta n d s o m e th i n g ? M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. S o - s o t h e c l i e n t … C H A I R P E R S O N : It w a s s e n t t o - i t w a s s e n t t o E M - E M L … M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s . Page 119 of 153 30 AUGUST 2019 – DAY 153 CHAIRPERSON: And EML sent it to IDC? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . T h a t is c o r r e c t b e c a u s e ( in t e r v e n e s ) . CHAIRPERSON: As part of expenses? A D V K AT E H O F M E Y R : H m . M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s . C H A I R P E R S O N : O h , b u t h o w c o u l d - h o w c o u l d th a t h a p p e n ? M R M A R K P H A K A M I L E M A I N G A N YA : e x p e n s e s i t is n o r m a l . 10 S o - s o fo r - f o r a p p r o v e d R e m e m b e r C h a ir p e r s o n s o w e g a v e t h e c li e n t 6 .5 m il li o n a n d o n t h a t h e s a y s I a m g o in g to b u y t h is e q u i p m e n t . I a m g o i n g t o b u y th is v e h i c l e . I a m g o in g to p a y t h e s e s a l a r i e s . So - so b e f o r e w e p a y t h e c l ie n t m u s t g i v e u s t h o s e in v o ic e s t h a t h e h a s r e c e i v e d fr o m t h e s e ll e r s o f t h a t e q u i p m e n t . C H A I R P E R S O N : Ye s . M R M A R K P H A K A M I L E M A I N G A N YA : S o w e c a n j u s ti f y g iv in g h i m m o n e y. S o - s o w e a r e s a y in g i n t h a t p a c k o f i n v o i c e s h e in c l u d e d th is o n e b u t th e n w e s a i d t h i s th i n g is n o t p a r t o f w h a t w e k n o w to b e y o u r funding requirement. C H A I R P E R S O N : T h is is n o t e q u ip m e n t o r a n y th in g l ik e th a t . 20 M R M A R K P H A K A M I L E M A I N G A N YA : E x a c tl y, e x a c tl y. S o i t s h a ll n o t b e p a i d fr o m t h e m o n e y f r o m t h e I D C b e c a u s e a t n o p o i n t d id y o u t e l l u s th a t th e r e i s a - t h e r e is a c o n s u l t a n t t h a t i s h e l p in g y o u t o d o t h e business plan. CHAIRPERSON: But why did he even go there? Why did you - do you e v e n h a v e t o s a y y o u d id n o t te ll u s ? I m e a n th a t - i f th e r e w a s s u c h Page 120 of 153 30 AUGUST 2019 – DAY 153 a n a r r a n g e m e n t i t w a s b e tw e e n t h e t w o o f t h e m . Is i t n o t? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s C h a ir b u t - b u t w e - t h e - a s p e r ( i n d i s t i n c t) h e h a d to m a k e i t c l e a r t o th e c li e n t th a t n o n e o f o u r m o n e y s h o u ld b e u ti li s e d to p a y fo r t h i s c l i e n t - f o r t h is i n v o i c e . CHAIRPERSON: Ye s . J a , n o , n o I u n d e r s t a n d t h a t c o m p le t e l y. I do n o t k n o w a b o u t Ms H o f m e y r b u t I m e a n - I m e a n o n th e - o n - o n th e a s s u m p t io n th a t E M L h a d a s k e d M a m e la P r o p e r ti e s Tr u s t - Pr o p e r t ie s Tr u s t - th e y a r e r a is i n g fu n d s - P r o p e r t ie s Tr u s t t o fa c i li t a te o r r a is e f u n d s f o r t h e m . T h a t m u s t b e th e i r - t h e ir o w n b u s i n e s s . 10 M R M A R K P H A K A M I L E M A I N G A N YA : C o r r e c t C h a ir. CHAIRPERSON: H o w - h o w c o u ld t h e y e v e n b e g i n t o t h i n k th e y c a n p a s s th a t o n to y o u . T h a t - t h a t i s m y - th a t is - t h a t is m y r e a c t io n y o u k n o w a n d - a n d I a m k i n d o f th i n k i n g m a y b e y o u - I D - I D C s h o u ld h a v e been much harsher … M R M A R K P H A K A M I L E M A I N G A N YA : O h , o h , o h . C H A I R P E R S O N : To E M - E M L M R M A R K P H A K A M I L E M A I N G A N YA : I u n d e r s ta n d … C H A I R P E R S O N : M a y b e - m a y b e I m is s e d s o m e t h i n g . M R M A R K P H A K A M I L E M A I N G A N YA : 20 Yo u r p r o b l e m . S o w e w i ll s e e la t e r … C H A I R P E R S O N : Ye s . M R M A R K P H A K A M I L E M A I N G A N YA : B e c a u s e l a te r w e d is c o v e r t h a t d e s p i te u s s a y in g d o n o t p a y t h is t h e c l i e n t w e n t o n t o p r o c e e d t o p a y t h is in v o ic e . C H A I R P E R S O N : Fr o m - fr o m t h e m o n e y o b ta in e d f r o m … ? Page 121 of 153 30 AUGUST 2019 – DAY 153 M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s . CHAIRPERSON: Hm. M R M A R K P H A K A M I L E M A I N G A N YA : S o - s o t h e n - h e th e n s h o w s u s a c o n tr a c t b e t w e e n h i m a n d M a m e la P r o p e r t y Tr u s t a n d t h e n in t h a t c o n tr a c t i t s a y s M a m e l a h a d - h a d in d i c a te d th a t p a r t o f t h e f u n d in g r e q u e s t w o u l d i n c lu d e th e s e r v ic e s t h a t h e r e n d e r e d . S o - s o i t is t h e r e a s o n t h a t E M L w a s s e n d i n g th is i n v o ic e . H e s a y s M a m e l a h a d i n d i c a t e d t h a t it w i ll b e p a r t o f t h e f u n d i n g r e q u i r e m e n ts . W h i c h is a p o i n t w e w e r e s a y i n g n o i t i s n o t. W e 10 are not going to pay it. C H A I R P E R S O N : I d o n o t k n o w M s H o f m e y r. J u s t - I t h i n k I w o u l d h a v e been very harsh. A D V K AT E H O F M E Y R : I n d e e d . CHAIRPERSON: Ja. A D V K AT E H O F M E Y R : In d e e d C h a ir. I - I - w i t h r e s p e c t I s h a r e t h a t s e n ti m e n t . CHAIRPERSON: Hm. A D V K AT E H O F M E Y R : D o y o u t h in k i t w a s s u ffic ie n t f o r M r R a m a simply to say we are not paying it because it was not in the original 20 t e r m s o r m i g h t h e a p p r o p r i a te ly h a v e s a i d w e a r e n o t p a y i n g i t b e c a u s e t h e I D C d o e s n o t p a y R 1 . 5 m i ll io n o n ly t o b e u s e d t o f a c i li t a te t h e v e r y f u n d i n g t h a t t h e I D C i s m a k i n g a v a il a b l e ? M R M A R K P H A K A M I L E M A I N G A N YA : N o I th in k h e s h o u l d h a v e g o n e f u r th e r C h a ir. H e s h o u l d h a v e e v e n e le v a t e d t h is m a t te r … A D V K AT E H O F M E Y R : I n d e e d . Page 122 of 153 30 AUGUST 2019 – DAY 153 M R M A R K P H A K A M I L E M A I N G A N YA : To t h e I D C a n d … A D V K AT E H O F M E Y R : I n d e e d M r M a i n g a n y a b e c a u s e a s w e w i ll d is c o v e r … M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : If t h i s h a d b e e n f l a g g e d a t a n a p p r o p r ia t e ti m e a s b e in g a b a s is o n w h ic h E M L w a s s e e k i n g d r a w d o w n s … M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : O n t h e f a c il it y … M R M A R K P H A K A M I L E M A I N G A N YA : H m . 10 A D V K AT E H O F M E Y R : P o s s i b ly m o r e a b o u t t h e a r r a n g e m e n t m ig h t have been uncovered. Is that not so? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. T h a t is c o r r e c t . A D V K AT E H O F M E Y R : Th a n k y o u ; b u t a s I h a v e t h e e v i d e n c e a l l t h a t h a p p e n s is M r R a m a g o e s b a c k a n d s a y s w e a r e n o t p a y i n g i t . R ig h t? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : Yo u m a y n o t u s e t h e f u n d i n g f o r t h is p u r p o s e . Is t h a t c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : A n d th e n w h a t h a p p e n s ? 20 CHAIRPERSON: Or maybe before that. A D V K AT E H O F M E Y R : H m . CHAIRPERSON: I t a k e it t h a t i t is o b v i o u s th a t t h e r e h a d b e e n n o f a c i li t a ti o n t h a t w a s l a w fu l t h a t w o u l d h a v e h a p p e n e d ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s C h a ir. Up to this point in ti m e a ll th e a p p r o v a l c o m m i t t e e s h a v e n e v e r b e e n m a d e a w a r e … Page 123 of 153 30 AUGUST 2019 – DAY 153 C H A I R P E R S O N : Ye s . M R M A R K P H A K A M I L E M A I N G A N YA : T h a t th e r e is a fa c i li t a t i o n . C H A I R P E R S O N : O k a y. A D V K AT E H O F M E Y R : A n d is i t I D C p o li c y n o t t o f u n d w h e r e th e r e is a f a c i li t a ti o n ? M R M A R K P H A K A M I L E M A I N G A N YA : Ex a c tl y. W e w i ll n e v e r p a y t h a t C h a ir. A D V K AT E H O F M E Y R : Th a n k y o u . I w a s m o v in g o n t o w h a t h a p p e n e d b e c a u s e y o u b e g a n i n o n e o f y o u r a n s w e r s t o t h e C h a i r r e c e n tl y t o ta lk 10 a b o u t w h e n i t w a s p ic k e d u p t h a t d e s p i t e t h e in d ic a t i o n t h a t i t s h o u ld not be paid it was paid. M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : Can you explain to us how that came about? T h e - t h e u n c o v e r i n g o f t h e p a y m e n t. M R M A R K P H A K A M I L E M A I N G A N YA : O k a y. So - so in terms of our processes after we have paid the client the money then after some p e r i o d o n c e h e h a s b o u g h t t h e - th e i t e m s h e n e e d e d . W e g o a n d d o a v e r i fic a ti o n t h a t i n d e e d … C H A I R P E R S O N : Yo u d o a v e r i f ic a t i o n ? 20 M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . C H A I R P E R S O N : O k a y. M R M A R K P H A K A M I L E M A I N G A N YA : W e g o t o t h e c l ie n t n o w a n d s a y did - where is the equipment that you bought and everything. So it is a t th a t p o i n t t h a t w e d is c o v e r e d th a t h e a c t u a ll y u t il is e d s o m e o f t h e m o n e y th a t w e h a d i n d i c a t e d t o p a y t h i s i n v o i c e . Page 124 of 153 30 AUGUST 2019 – DAY 153 A D V K AT E H O F M E Y R : A n d w h a t f u r th e r in q u ir i e s w e r e m a d e in t h a t regard? M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : Yo u m e n t i o n e d a n a g r e e m e n t t h a t w a s s o u g h t . M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s . S o t h e n a t th a t p o i n t in t i m e b e - b e c a u s e t h e te a m h a d c h a n g e d t h a t d i d t h e i n it i a l a p p lic a ti o n . S o M r R a m a w a s n o l o n g e r p a r t o f t h e te a m . A n e w t e a m w e n t in a n d a s t h e y d o t h e a u d i t t h e y d is c o v e r e d t h a t t h is p a y m e n t h a s b e e n m a d e a n d - a n d t h e n t h e y t a k e t h e c li e n t o n a s t o w h y d i d y o u p a y 10 t h is b e c a u s e in o u r b u d g e ts w e d o n o t s e e a n e x p e n s e i te m li k e t h i s . T h e n - t h e n t h e c li e n t s a y s I h a d t o p a y t h is b e c a u s e I h a d e n t e r e d i n to a n a g r e e m e n t w i t h th is M a m e l a P r o p e r ty Tr u s t t h a t w o u l d h e l p m e t o c o m p il e m y b u s i n e s s p l a n a n d t h e c l ie n t n o w i n d ic a te s t h a t b e c a u s e M a m e l a is a w a r e t h a t t h e fu n d s h a v e b e e n p a i d th e r e fo r i t d e m a n d e d i ts p a y m e n t a n d t h e c li e n t s a y s i n a n e m a i l a d d r e s s e d to th e t e a m i t s a y s it f e l t i t h a d t o p a y t h is in v o ic e . I t is th e n t h a t th e m a t te r w a s r e p o r t e d b a c k to t h e - to th e I D C b e c a u s e u n ti l t h a t a u d i t w e d i d n o t k n o w t h a t t h e - t h e c l i e n t h a d u til is e d s o m e o f o u r m o n e y t o p a y f o r t h is . 20 A D V K AT E H O F M E Y R : A n d w h e n a b o u t w a s th a t r e p o r t e d b a c k ? M R M A R K P H A K A M I L E M A I N G A N YA : So we became aware of this a r o u n d 4 M a y 2 0 1 8 a s th e C r e d i t C o m m i t t e e . A D V K AT E H O F M E Y R : A n d t h a t i s a d a t e o n w h ic h a n a p p li c a t io n w a s m a d e f o r f u r th e r f u n d i n g . Is t h a t r i g h t ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s . Page 125 of 153 That is a date when 30 AUGUST 2019 – DAY 153 a n a p p li c a t io n i s m a d e fo r f u r t h e r f u n d i n g . A D V K AT E H O F M E Y R : S o a t t h is p o i n t 1 2 . 5 m il li o n h a s b e e n e x te n d e d t o E M L a n d t h a t w a s d r a w n d o w n i n A u g u s t 2 0 1 7 a s I r e c a ll i t . Is t h a t correct? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. A D V K AT E H O F M E Y R : A n d t h e n i n M a y 2 0 1 8 - e a r l y M a y 2 0 1 8 t h e r e is a fu r t h e r a p p l ic a ti o n b y E M L f o r a b o u t R 8 . 5 mi ll i o n o f fu n d i n g . Is t h a t r ig h t Mr M a i n g a n y a ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t is c o r r e c t. T h a t is c o r r e c t . 10 A D V K AT E H O F M E Y R : A n d w a s t h is i s s u e o f t h e p a y m e n t o f 1 . 1 m il li o n m a d e k n o w n t o t h e c o m m i t t e e t h a t w a s a s k e d to a p p r o v e t h a t f u r th e r f u n d i n g ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s . N o w o n - o n 4 M a y i t it i s a t t h i s p o i n t t h a t t h e C r e d it C o m m i t t e e b e c o m e s a w a r e b e c a u s e n o w t h e t i m e m u s t s u b m i t t h e n e w f u n d i n g r e q u e s t fr o m t h e c li e n t a n d t h e y m u s t a ls o e x p l a in h o w th e o t h e r m o n e y w a s u ti lis e d . S o o n 4 M a y t h e y r e p o r t b a c k t o th e te a m w h y t h e c li e n t n e e d s m o r e m o n e y n o w. A m o n g o th e r t h in g s t h e c o n tr a c t h a d n o t s t a r t e d y e t a n d th e c li e n t h a d b o u g h t t h e e q u i p m e n t i n a n tic i p a t io n o f t h i s a n d t h e c l ie n t 20 had paid salaries and now it was running out of working capital and we s a i d n o b u t h o w d id y o u u s e t h e m o n e y t h a t w e g a v e y o u a n d t h e n i t - i t is a t t h a t p o i n t t h a t th e t e a m r e p o r ts b a c k t h a t a m o n g o t h e r t h i n g s t h a t w e r e p a i d w e r e - w e r e f o r - f o r t h is b u s i n e s s p la n . S o - s o a t - a t t h is s t a g e i f - i f I r e c a l l i t w a s r e p o r t e d t o th e c o m m i t t e e th a t a n a m o u n t h a d b e e n p a i d f o r h e l p i n g t h e c li e n t t o d o t h e Page 126 of 153 30 AUGUST 2019 – DAY 153 b u s i n e s s p l a n . S o a t t h e c o m m i t t e e i t w a s n o t r e p o r t e d in t h i s m a n n e r a s a fa c i li t a ti o n . I t w a s r e p o r t e d a s a le g i ti m a t e e x p e n s e i n c u r r e d t o a s s is t t h e c li e n t b u t t h e n w e s a id w e d id n o t b u d g e t f o r t h is a n d - a n d s o - s o C h a ir p e r s o n s o m e t i m e s o u r c li e n t s d o u s e p e o p le t o h e l p t h e m c o m p il e t h e b u s i n e s s p la n b u t o u r c o n d i t io n is t h a t i t m u s t b e m a d e k n o w n t o t h e I D C t h e s c o p e o f s e r v ic e s to b e p r o v id e d . S o - s o t h e C r e d i t C o m m i t te e to o k is s u e w i t h t h is m a tt e r t h a t o k a y p r o v id e d t h e c li e n t h e lp e d y o u w i t h t h e b u s i n e s s p l a n b u t y o u s h o u l d h a v e a l e r t e d t h e I D C th a t t h e r e is t h is s e r v ic e p r o v i d e r a s w e ll 10 a n d w e w o u l d h a v e n e e d e d to a s s e s s i f i t i s l e g i ti m a t e b e c a u s e th e t e a m i n d i c a t e d t h a t i n a l l th e ir p r o c e s s e s u p t o t h i s p o in t in t i m e t h e y h a d n o t s e e n a n y c o n s u l t a n t d o i n g t h e ir - t h e ir w o r k . S o w h e n t h is w a s t a b l e d t o t h e C r e d i t C o m m i t t e e w e d id n o t a p p r o v e i t a t t h a t p o in t b e c a u s e w e w e r e n o t h a p p y w it h t h is . W e s e n t t h e t e a m b a c k t o o b t a i n fu r t h e r c la r i fi c a t io n s fr o m th e c li e n t a s t o - a s t o h o w i t is g o i n g t o r e m e d y t h is a n d - a n d a t t h a t p o i n t i n ti m e t h e r e w e r e o th e r b r e a c h e s t h a t t h e c l ie n t h a d - h a d d o n e o n t h e f a c ili t ie s . S o t h e C r e d it C o m m i t t e e d i d n o t a p p r o v e t h e a p p l ic a ti o n a t t h a t p o in t in ti m e p e n d in g r e s o l u ti o n o f t h o s e i s s u e s . 20 A D V K AT E H O F M E Y R : Mr Mainganya I understood that the Credit C o m m i t t e e d i d a p p r o v e t h e r e q u e s t fo r t h e 8 . 5 m il li o n a d d i t io n a l f u n d i n g i n i t ia ll y. Wa s I w r o n g ? M R M A R K P H A K A M I L E M A I N G A N YA : I n i ti a l ly d e c li n e d i t … A D V K AT E H O F M E Y R : H m . M R M A R K P H A K A M I L E M A I N G A N YA : A n d th e n t h e y s e n t t h e m b a c k … Page 127 of 153 30 AUGUST 2019 – DAY 153 A D V K AT E H O F M E Y R : H m . M R M A R K P H A K A M I L E M A I N G A N YA : A n d t h e n th e y c a m e b a c k o n 1 8 M a y. A D V K AT E H O F M E Y R : A n d o n t h e 1 8 t h it w a s a p p r o v e d ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . So on 18 May the - the is s u e s t h a t w e r e r a i s e d b y t h e c o m m i t t e e w e r e t a b l e d a n d t h e c l i e n t in d i c a t e d h o w i t a d d r e s s e d t h e m . N o w t h e - th e I D C is - is a t a p o in t n o w w h e r e i t h a d d i s b u r s e d t h e s e f a c il it i e s th e 1 2 . 5 m i ll io n a n d - a n d t h e c l i e n t i n d ic a te s t h a t t h e - th e c o n tr a c t fr o m S A Ex p r e s s h a s n o t y e t 10 m a t e r i a lis e d a n d t h e n i n t h e m e a n ti m e i t h a d b o u g h t t h e e q u ip m e n t a n d it h a d o b t a i n e d th e c o m p l i a n c e s t h a t it r e q u ir e d t h a t w e r e b u d g e t e d f o r b u t n o w it h a d r u n o u t o f f u n d s … A D V K AT E H O F M E Y R : H m . M R M A R K P H A K A M I L E M A I N G A N YA : A n d th e n t h e c l ie n t in d ic a t e d a t t h a t p o i n t i n ti m e t h a t i t - i t h a d r e c e iv e d t w o n e w c o n tr a c ts . O n e w a s fr o m a n e n t i ty c a ll e d F ly A fr ic a a n d o n e w a s fr o m G A A L t h e a ir p o r t i n P o lo k w a n e a n d t h e n i t r e q u e s t e d f u n d s t o - to s e r v e t h o s e c o n tr a c ts . A D V K AT E H O F M E Y R : T h a n k … M R M A R K P H A K A M I L E M A I N G A N YA : 20 Then the committee requested t o k n o w th e c li e n t h o w is i t g o in g t o p a y b a c k th is m o n e y t h a t i t h a d p a i d f o r - f o r fa c i li t a t i o n fe e s a n d a t t h a t p o i n t t h e c li e n t - s o r r y b e f o r e t h a t . A l e t te r o f b r e a c h w a s s e n t t o th e c li e n t in d ic a t i n g o u r d is p l e a s u r e w i t h w h a t h a d h a p p e n e d w i t h th e fa c i li ti e s a n d r e q u e s t e d h o w i t is g o i n g to r e m e d y t h a t s it u a ti o n a n d t h e te a m i n d i c a t e d in th e i r r e s p o n s e s t h a t th e c li e n t i n d ic a te d t h a t t h e - t h e fu n d s w o u ld b e Page 128 of 153 30 AUGUST 2019 – DAY 153 r e i m b u r s e d fr o m t h e p r o c e e d s o f a - o f a g r a n t I th i n k i t w a s e x p e c t in g fr o m th e o t h e r s u p p li e r s a n d t h e n w e p u t a c o n d i t i o n a s a c o m m i t t e e b e c a u s e i t is n o t th e - th e 1 .5 t h a t w a s p a i d . I th in k 1 . 1 m il li o n w a s p a i d . S o t h e c o m m i t te e i n d i c a t e d t o t h e c li e n t a t t h a t p o i n t i n t i m e th a t i t - i t m a y n o t p a y a n y f u r t h e r m o n i e s f o r a n y s e r v ic e s r e l a t e d t o - t o t h is p o i n t i n t i m e a n d t h e n i t is t h e n o n o n t h e s tr e n g t h o f t h o s e c o n tr a c ts t h a t w e r e p r o v i d e d to t h e I D C a n d a n d i n v ie w o f t h e e q u i p m e n t t h a t h a d a lr e a d y b e e n s p e n t o n t h e f a c i li t ie s t h a t t h e - t h e c o m m i t te e a p p r o v e d th a t a p p l ic a ti o n . 10 A D V K AT E H O F M E Y R : I f I c o u l d ju s t a f e w a s p e c ts o f t h a t . What p r e c i s e ly d i d t h e c li e n t c o n v e y to t h e I D C a s t h e r e a s o n f o r t h e f a c t t h a t t h e S A E x p r e s s c o n tr a c t h a d n o t b e e n i m p l e m e n t e d ? M R M A R K P H A K A M I L E M A I N G A N YA : I - I d o n o t r e c a ll w h a t it s a i d . I t h i n k a m o n g o th e r th in g s i t i n d ic a t e d th a t I D C r e l e a s e d th e g u a r a n t e e s la t e a s a r e a s o n t o ju s t i fy a n d th e n i t c o u l d n o t p r o v i d e th e g u a r a n t e e s t o t h e o i l c o m p a n i e s . T h e r e fo r e i t c o u ld n o t o r d e r fu e l. Th a t is w h a t w a s i n d ic a te d in t h e s u b m is s i o n . A D V K AT E H O F M E Y R : W o u l d i t h a v e b e e n p r u d e n t to p o s s i b l y e n g a g e S A E x p r e s s a t t h a t s ta g e to u n d e r s ta n d fr o m t h e m w h y t h e c o n tr a c t h a d 20 not been implemented? M R M A R K P H A K A M I L E M A I N G A N YA : I t h i n k s o a m o n g o t h e r th i n g s … A D V K AT E H O F M E Y R : H m . M R M A R K P H A K A M I L E M A I N G A N YA : T h a t s h o u ld h a v e b e e n d o n e . A D V K AT E H O F M E Y R : Yo u s e e Mr M a in g a n y a i f th a t h a d b e e n d o n e t h e C o m m i s s i o n h a s r e c e i v e d e v i d e n c e a l r e a d y th a t t h e ir r e g u l a r i t y o f Page 129 of 153 30 AUGUST 2019 – DAY 153 t h a t c o n t r a c t t h a t h a d b e e n a w a r d e d t o S o u th A fr ic a n E x p r e s s … M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : By S o u th A fr ic a n E x p r e s s t o E M L … M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : H a d a lr e a d y b e e n p ic k e d u p in S o u th A fr ic a n E x p r e s s i n O c t o b e r 2 0 1 7 a n d a n i n v e s ti g a t io n h a d i n f a c t b e e n i n i ti a t e d a s e a r ly a s th a t . W e a r e n o w i n M a y o f 2 0 1 8 … M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : 10 W h e n f u r t h e r fu n d i n g i s b e i n g r e q u e s t e d f r o m the IDC … M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : A n d t h e o n l y e x p l a n a t io n th a t t h e I D C a s I u n d e r s t a n d y o u r e v i d e n c e w a s g iv e n b y t h e c l ie n t … M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : Fo r n o n - i m p le m e n t a ti o n o f t h a t c o n tr a c t … M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : R e l a t e d t o s o m e d e l a y in g u a r a n t e e s . Is t h a t r ig h t ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s b u t - b u t - t h a t is r i g h t a n d 20 t h e n y o u m u s t r e c a ll t h is f u n d in g t h a t w a s a p p r o v e d w a s s u s p e n d e d . A D V K AT E H O F M E Y R : Ye s i n d e e d . I t w a s s u s p e n d e d a f e w d a y s l a te r w h e n a m e d ia a r ti c l e … M R M A R K P H A K A M I L E M A I N G A N YA : I n M a y. A D V K AT E H O F M E Y R : Br o k e . M R M A R K P H A K A M I L E M A I N G A N YA : S o - s o w h e n w e b e c a m e a w a r e Page 130 of 153 30 AUGUST 2019 – DAY 153 of that. A D V K AT E H O F M E Y R : H m . M R M A R K P H A K A M I L E M A I N G A N YA : W e s u s p e n d e d i t … A D V K AT E H O F M E Y R : Ye s . M R M A R K P H A K A M I L E M A I N G A N YA : I m m e d i a t e ly. A D V K AT E H O F M E Y R : N o in d e e d . A l l t h a t I a m i n t e r r o g a t in g n o w i s when EML comes to the IDC for more money … M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : I n M a y 2 0 1 8 … 10 M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : A f e w t h i n g s h a v e h a p p e n e d … M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : B e t w e e n t h e 1 2 . 5 m il li o n t h a t i t r e c e iv e d … M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : I n A u g u s t 2 0 1 7 … M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : May 2018. And i ts a p p lic a ti o n I w o u ld l ik e to l is t th o s e fo r y o u . for more money in T h e o n e i t is th a t i t i n b r e a c h o f a s p e c i fi c i n d ic a ti o n f r o m t h e I D C t h a t i t n o t u s e t h o s e 20 m o n i e s t o p a y a fa c il i ta t io n f e e . It h a d d o n e s o . C o r r e c t? M R M A R K P H A K A M I L E M A I N G A N YA : H m . A D V K AT E H O F M E Y R : I f y o u c a n ju s t s a y y e s f o r t h e r e c o r d . M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , c o r r e c t . A D V K AT E H O F M E Y R : Thank you. I t h a d a n d t h a t f a c ili t a ti o n a s a f a c i li t a ti o n o f th e v e r y f u n d in g th a t i t h a d s e c u r e d fr o m t h e I D C . Page 131 of 153 30 AUGUST 2019 – DAY 153 C o r r e c t? M R M A R K P H A K A M I L E M A I N G A N YA : C o r r e c t . A D V K AT E H O F M E Y R : And I understood your evidence to be p r e v i o u s ly th a t is ir r e g u la r i n t h e v i e w o f th e I D C ’s p r o c e s s e s . C o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : C o r r e c t . A D V K AT E H O F M E Y R : It had then never yet i m p l e m e n te d the s u b s ti t u te c o n tr a c t f o r w h ic h t h e 1 2 .5 m i ll io n h a d b e e n p r o v i d e d to i t. C o r r e c t? M R M A R K P H A K A M I L E M A I N G A N YA : C o r r e c t . 10 A D V K AT E H O F M E Y R : A n d n o t w i t h s t a n d i n g th a t a s I u n d e r s ta n d y o u r e v i d e n c e th e I D C d i d n o t t a k e f u r th e r s te p s t o tr y a n d g e t t o t h e b o t to m o f w h y t h a t i m p l e m e n t a ti o n h a d n o t ta k e n p la c e . Is th a t c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : S o t h e s t e p s w h a t a r e ta k e n w a s t h e b r e a c h th a t w a s c o m m u n ic a te d t o t h e c li e n t i n t e r m s o f i n d ic a ti n g t h a t t h e I D C a t th a t p o in t in ti m e m a y c a l l th e fa c i li ti e s i f t h o s e b r e a c h e s a r e n o t r e m e d i e d a n d th e n - s o a t - a t t h a t p o in t i n t i m e th e c o m m i t t e e - th e s e - t h e s e is s u e s th a t y o u a r e r a is i n g w e r e r a is e d i n o u r r is k r e p o r t th a t w e d id a s y o u w o u l d s e e i n m y a ff id a v i t . T h e f a c t t h a t the - sorry I am on page 10. 20 A D V K AT E H O F M E Y R : T h a n k y o u . M R M A R K P H A K A M I L E M A I N G A N YA : So on page 10 in our a s s e s s m e n t o f t h e s i t u a t i o n w e d i d i n d i c a t e t h a t t h e c l ie n t h a d f a il e d t o m e e t th e c o n d i ti o n r e g a r d i n g t h e o ff t a k e c o n tr a c t. t a k e c o n t r a c t f r o m F ly A f r ic a . T h e r e w a s n o o ff T h e S A E x p r e s s c o n tr a c t t h a t y o u in d i c a t e d h a d n o t - h a d n o t m a t e r i a l is e d a n d b e e n i m p l e m e n t e d a t th a t Page 132 of 153 30 AUGUST 2019 – DAY 153 p o i n t in t i m e . S o - s o t h e s e m a t t e r s t h a t y o u a r e r a is i n g w e r e - w e r e d e b a te d a t t h e c o m m i t t e e . N o w t h e q u e s t io n w a s w h a t d o w e t h e n d o w i t h t h e f a c il i ti e s t h a t h a v e a lr e a d y b e e n a p p r o v e d b y t h e c l ie n t . N o w a t t h a t p o i n t in ti m e t w o t h i n g s c o u l d h a p p e n C h a i r p e r s o n . S o o n e w e c a n c a l l t h e f a c il i ti e s . Ta k e t h e s e c u r i ty a n d c l o s e th e b u s i n e s s o r t w o w e c a n r e v ie w th e c li e n t w h a t i t s a y s i t i s g o in g t o d o to r e m e d y th e s e b r e a c h e s t h a t h a v e r is e n a n d t h r e e w e c o n s i d e r t h e f a c il i ti e s t h a t w e 10 h a v e d is b u r s e d . A r e t h e y - a r e t h e y c o l la t e r a l ? A r e t h e y s u p p o r t e d b y h a r d c o r e a s s e ts ? S o - s o t h o s e - t h o s e a r e t h e t w o is s u e s t h a t o f t e n a r i s e w h e n c li e n t s d o n o t - d o n o t r e s p e c t o u r - o u r a g r e e m e n ts . W e r e a c h a p o in t w h e r e w e h a v e t o c lo s e d o w n t h e b u s i n e s s . S o - s o t h e - th e c o m m i t t e e w a s c o n fr o n t e d w i t h th a t . D o e s i t c lo s e d o w n t h e b u s i n e s s a n d s e l l t h e e q u ip m e n t o r d o e s i t r e q u e s t a r e m e d i a l p l a n a n d b a s e d o n th e r e m e d i a l p l a n th a t t h e c l i e n t h a d i n d i c a t e d . B e in g i n d ic a ti o n t h a t i t h a d o b ta in e d f u r t h e r c o n tr a c t s . B e i n g in d i c a t io n t h a t i t h a d o b t a i n e d a d d i ti o n a l fi n a n c i a l s u p p o r t I t h i n k fr o m - 20 fr o m To t a l o r E n g e n o n e o f t h e o t h e r g u y s a n d t h e n i t - i t i n d i c a t e d t h a t it h a d o b t a i n e d t h e - t h e J I G a c c r e d i t a ti o n w h ic h w e p a i d o v e r - I t h in k o v e r a m i ll io n t o g e t t h a t a c c r e d i ta t io n b y o th e r i n te r n a ti o n a l o p e r a t o r s s o i t c a n b e a b l e to - t o s u p p ly f u e l a n d - a n d w h e th e r w e - w e c l o s e d o w n a n d t h e fa c t t h a t a t t h a t p o in t i n ti m e t h e c li e n t w a s e m p l o y i n g a b o u t fi v e p e o p l e a n d - a n d th e d i v i s i o n o f c l o s in g d o w n w o u l d b e t h o s e Page 133 of 153 30 AUGUST 2019 – DAY 153 jo b s l o s t . So - so those are the issues that the committee had to c o n te n d w i t h v e r s u s t h e s e b r e a c h e s fr o m t h e c l ie n t a n d - a n d g iv e n t h o s e t w o i n d i c a t io n s t h e c o m m i t t e e d e c i d e d t o - t o s u p p o r t t h e c l ie n t f u r th e r t o a v o id c l o s u r e o f th e b u s i n e s s . A D V K AT E H O F M E Y R : M r M a i n g a n y a w a s t h e f a c t o f th e f a c i li t a ti o n f e e n o t o n i ts o w n e n o u g h o f a r e d fl a g to m a k e t h e I D C c a u ti o u s a b o u t f u r th e r e x t e n d i n g f u n d s to E M L ? M R M A R K P H A K A M I L E M A I N G A N YA : 10 S o - s o C h a ir p e r s o n to m y c o l l e c ti o n t h is fa c t t h a t t h i s w a s - t h is fa c ili t a ti o n f e e o n ly c a m e t o t h e I D C w h e n w e d i d th e i n v e s t ig a ti o n to - t o t h e p e o p le b u t - b u t w h e n … A D V K AT E H O F M E Y R : Mr Mainganya if I could just come in there b e c a u s e I u n d e r s t o o d y o u r e v id e n c e to b e p r e v i o u s ly t h a t i t w a s b r o u g h t t o y o u r a t t e n t i o n s p e c i f ic a l ly t h e a g r e e m e n t b e t w e e n M a m e l a Tr u s t a n d E M L w a s c a ll e d f o r a n d y o u a c t u a ll y m a d e i t t h e c o n d i t io n o f t h e f u r th e r e x t e n s i o n o f th e l o a n t h a t t h e r e b e s o m e a r r a n g e m e n t w it h E M L a b o u t t h e f a c t t h a t i t w a s g o i n g t o r e i m b u r s e t h e 1 . 1 m i ll io n . D i d I u n d e r s t a n d t h a t i n c o r r e c t ly ? M R M A R K P H A K A M I L E M A I N G A N YA : N o y o u n o t - y o u n o t in c o r r e c t. I 20 a m s a y in g w h e n i t w a s r e p o r t e d t o t h e C r e d i t C o m m i t t e e i t w a s n o t r e p o r t e d i n t h i s f a s h io n th a t i t w a s a fa c il it a ti o n . T h e y s a i d th e c li e n t h a d p a i d a c o n s u lt a n t w h o h e lp e d th e m t o d o t h e b u s in e s s p l a n a t th a t p o i n t in t i m e . T h e c o m m i t t e e h a d n o t s e e n th is in v o ic e . T h e - th e m a t t e r w a s r e p o r t e d to t h e C r e d i t C o m m i t t e e . A D V K AT E H O F M E Y R : I s e e . S o y o u h a d n o t a t t h e t i m e s e e n e i t h e r Page 134 of 153 30 AUGUST 2019 – DAY 153 t h e in v o ic e o r t h e C o m m i s s i o n A g r e e m e n t ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s a t th e - i t w a s n o t p r e s e n t e d there. A D V K AT E H O F M E Y R : T h a n k y o u . C H A I R P E R S O N : W e l l t h is 1 . 5 d id y o u a s k E M L e x a c tl y w h a t i t is t h a t w a s d o n e b y M a m e la Pr o p e r t y Tr u s t , t h e p r o p e r ti e s tr u s t t h a t M a m e l a P r o p e r ti e s Tr u s t u n d e r s t o o d to c o n s ti t u te f a c i li t a ti o n r a i s i n g o f f u n d in g fr o m t h e I D C . M R M A R K P H A K A M I L E M A I N G A N YA : 10 Ye s C h a i r p e r s o n w h e n w e in v e s t i g a t e d t h i s t h e c l ie n t s e n t a l o n g e m a i l t o th e ID C , i t is j u s t th a t I d o n ’t h a v e i t n o w w h ic h i n d ic a t e d to th e I D C w h a t s e r v i c e s t h i s M a m e l a P r o p e r ty Tr u s t is a l l e g e d t o h a v e p e r fo r m e d . CHAIRPERSON: B u t w h a t w a s i t r e a ll y, w a s i t p r e p a r a ti o n o f t h e s u b m is s io n , w h a t w a s i t? M R M A R K P H A K A M I L E M A I N G A N YA : Yo u w o u l d r e c a ll C h a ir p e r s o n i n the referred beginning we – th e advocate to a business p la n . . .( i n te r v e n t io n ) C H A I R P E R S O N : Yo u m a y h a v e b u t I r e m e m b e r I t o ld y o u I h a v e – I’ v e g iv e n u p tr y i n g t o h e a r w h a t y o u s a y b e c a u s e I ’ m – I h e a r s o m e t h i n g s , 20 I d o n ’t h e a r o t h e r s b u t I ’v e g iv e n u p , I t h i n k i t’s th e n a tu r e o f y o u r voice. M R M A R K P H A K A M I L E M A I N G A N YA : ( In d is t in c t) C H A I R P E R S O N : J a , s o w h a t is i t w a s i t p r e p a r a ti o n o f t h e s u b m is s io n o r w h a t w a s it ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , I w a s . . .( i n t e r v e n t i o n ) Page 135 of 153 30 AUGUST 2019 – DAY 153 C H A I R P E R S O N : In e s s e n c e ? M R M A R K P H A K A M I L E M A I N G A N YA : I w a s s a y i n g t h a t b u s i n e s s p la n t h a t a d v o c a te r e fe r r e d t o e a r li e r i n t h e b e g i n n in g i t w a s a m o n g o t h e r t h i n g s t h a t a r e a ll e g e d t o h a v e b e e n d o n e b y t h i s M a m e l a P r o p e r ty Tr u s t i n r e t u r n f o r t h is . A D V K AT E H O F M E Y R : CHAIRPERSON: F o r . .. ( i n te r v e n t io n ) B u t i s t h a t u n d e r s t o o d to b e t h e r a i s i n g o f f u n d s , g e n e r a l ly s p e a k i n g , w h e n s o m e b o d y r a is e s , c a n a n y b o d y r a i s e f u n d s t h e w a y i t ’s u n d e r s t o o d i n b u s i n e s s o r d o a n y f a c il it a ti o n w i t h o u t t a l k i n g 10 t o t h e p e r s o n w h o is b e i n g a s k e d to p r o v id e f u n d s ? M R M A R K P H A K A M I L E M A I N G A N YA : S o C h a ir p e r s o n I t h in k p e r h a p s a s th e A d v o c a te p r o c e e d s i t w il l b e c o m e c l e a r e r w h a t h a p p e n e d . C H A I R P E R S O N : O h I ’ m a h e a d o f – o k a y a lr i g h t . M R M A R K P H A K A M I L E M A I N G A N YA : B e c a u s e w e w e r e a s k in g th e s a m e q u e s t io n i n t h e c o m m i t t e e , w h a t h a s e x a c tl y t h i s p e r s o n d o n e to d e s e r v e t h e s e t h in g s . C H A I R P E R S O N : Ye s , w e ll th e r e a s o n w h y I w a s a s k in g , I w a s g o in g t o a s k i t m u c h e a r li e r b u t t h e r e a s o n w h y I a s k e d i t n o w w a s b e c a u s e M s H o f m e y r t a l k e d a b o u t w h e th e r i t w a s n ’ t a s u ffic i e n t b a d fl a g t o I D C s o i t 20 b r o u g h t b a c k th a t q u e s t i o n i n m y m i n d t o s a y b u t if y o u a s ID C k n o w t h a t t h e r e is n o b o d y w h o h a s b e e n t a lk i n g t o y o u o n b e h a l f o f t h is c l ie n t t o tr y a n d r a is e f u n d s , i f y o u a r e s h o w n a n i n v o ic e th a t s a y s s o m e b o d y is d e m a n d i n g m o n e y b e c a u s e t h e y fa c i li t a t e d o r r a is e d f u n d s w i t h y o u , n o t w i t h s o m e b o d y e l s e , a n d y o u k n o w th a t t h e r e is n o s u c h y o u k n o w, is n ’ t i t – s h o u ld n ’ t th a t h a v e s a i d t o I D C h a n g o n m a y b e t h a t is fr a u d Page 136 of 153 30 AUGUST 2019 – DAY 153 here. M R M A R K P H A K A M I L E M A I N G A N YA : So indeed Chairperson the c r e d i t c o m m i t t e e th a t i n i ti a lly r e j e c t e d t h is a p p li c a t io n w a s v e r y d is p le a s e d w i th t h i s a n d i t i s e s p e c i a l ly f o r th a t r e a s o n t h a t it s a i d a le t t e r o f b r e a c h m u s t b e is s u e d t o t h e c l i e n t a n d i t is fo r t h a t r e a s o n t h a t t h e y s e n t th e t e a m b a c k t o t h e c li e n t t o o b t a i n e x p la n a t i o n s a s t o e x a c tl y w h a t h a p p e n e d , s o I f u l ly a g r e e w i t h y o u , w e w e r e n o t h a p p y w i t h w h a t h a s h a p p e n e d h e r e C h a ir p e r s o n . C H A I R P E R S O N : O k a y. 10 A D V K AT E H O F M E Y R : Mr Mainganya I appreciate everything you h a v e s a id a b o u t t h e s t e p s th a t w e r e i n i t i a l ly ta k e n , t h e b r e a c h l e t t e r s e n t, t h e f e e d b a c k t h a t y o u o b t a in e d , b u t th e f a c t o f t h e m a t t e r is th e I D C d i d d e c i d e t o e x te n d a n o t h e r R 8 . 5 m il li o n t o E M L , d i d i t n o t ? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : It did. I t d i d , a n d b a c k t o t h e C h a i r ’s q u e s ti o n i s n ’ t ju s t th e m e r e f a c t th a t t h e r e ’s a f a c il i ta ti o n f e e o f n o w R 1 . 1 m il li o n , w h ic h i s n o t a n i n s ig n if ic a n t a m o u n t is i t M r M a in g a n y a ? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : 20 I t i s it is . I t is s ig n i f ic a n t i s n ’ t i t , I m e a n e s p e c ia ll y if it is fo r p r e p a r i n g th e b u s i n e s s p la n t h a t w e lo o k e d a t p r e v io u s ly t h a t is a b u s i n e s s w e s h o u l d a ll b e g e t ti n g in t o b e c a u s e a s I s e e t h a t b u s in e s s p l a n i t’s a b o u t 1 0 p a g e s l o n g i t is n o t p a r t ic u l a r ly d i ffi c u l t t o g e t h e r. W h y w a s t h i s n o t m o r e o f a c o n c e r n to t h e I D C , w h e n i t a g r e e s to p r o v i d e R 8 . 5 m il lo n m o r e f u n d i n g ? M R M A R K P H A K A M I L E M A I N G A N YA : It was a concern Advocate, also Page 137 of 153 30 AUGUST 2019 – DAY 153 w h a t w a s a c o n c e r n w a s t h e m o n e y th a t w e h a d a lr e a d y in c u r r e d o n t h e c li e n t , w e h a d t o r e c o v e r th a t m o n e y. A D V K AT E H O F M E Y R : And as I understand your evidence you made a b r ie f r e fe r e n c e t o a m e d i a a r t ic le , w h a t h a p p e n e d w it h th e m e d i a a r ti c l e a n d h o w d i d t h a t in f lu e n c e th e I D C ’s p r o c e s s e s . If you would lik e a r e fe r e n c e f o r t h a t , i t’s a t p a g e 9 o f y o u r a ffi d a v i t a n d i t ’s a t paragraph B on that page, where you refer to media reports on the 27th of May 2019. M R M A R K P H A K A M I L E M A I N G A N YA : 10 Ye s , o k a y, o k a y, s o t h e r e l e v a n t – i t s a y s h o w e v e r o n 2 7 M a y, r e m e m b e r t h is f a c il i ty w a s a p p r o v e d o n 1 8 M a y s o o n 2 7 M a y v a r io u s n e g a ti v e a ll e g a ti o n s w e r e p u b li s h e d i n t h e m e d i a r e g a r d in g E M L . U p o n th is m e d i a a ll e g a t io n s b e i n g b r o u g h t to I D C ’s a t t e n t i o n , a n d m y a t t e n t i o n I i m m e d i a te ly c o m m u n i c a t e d to t h e H e a d o f t h e B a s ic s a n d C h e m ic a l S p e c i a l U n i t t h a t n o d r a w - d o w n s s h o u l d b e a l lo w e d o n t h e s e f a c il i ti e s u n t il a l l th e a l le g a ti o n s r e fe r r e d t o in t h e m e d i a a b o v e h a v e b e e n r e s o lv e d , a n d t h e n I h a v e a t t a c h e d p r o o f o f t h a t c o r r e s p o n d e n c e , s o i n a s e n s e w h a t h a p p e n e d i m m e d i a te ly a ft e r w e a p p r o v e d w e r e a d a b o u t t h e s e fr a u d a l le g a ti o n s c o n c e r n i n g o u r c li e n t , th e n I to ld th e b u s i n e s s u n i t th a t t h e y s h o u l d n ’ t a l l o w a n y 20 d is b u r s e m e n ts u n ti l w e u n d e r s ta n d t h e n a t u r e o f t h e s e a l l e g a ti o n s . W e t h e n e n g a g e d S A E x p r e s s t o s a y w e h a v e fu n d e d t h is c l ie n t , w e r e a d a b o u t t h e s e th i n g s i n th e m e d i a , c a n y o u te ll u s w h a t is h a p p e n in g b e c a u s e w e w il l n o t d i s b u r s e o n th e s e f a c i li ti e s , s o a t th a t p o i n t i n ti m e S A E x p r e s s in d i c a t e d to u s t h a t t h e y a r e i n v e s ti g a ti n g , t h e y h a v e la u n c h e d a n i n v e s t i g a t io n a n d t h e n th e r e w e r e s e v e r a l t o ’s a n d fr o ’s Page 138 of 153 30 AUGUST 2019 – DAY 153 b e t w e e n u s a n d S A E x p r e s s r e g a r d i n g t h e s e a l l e g a ti o n s b u t t o u l ti m a t e ly w e n e v e r g o t t o d is b u r s e t h e s e f a c i li t ie s , b e c a u s e w e w e r e t e ll i n g t h e c l ie n t th a t u n ti l w e g e t a c l e a r a n c e o n th e a l le g a ti o n s w e w i ll n o t d is b u r s e a n d th a t is w h e r e w e a r e . W e n e v e r g o t t o d is b u r s e o n t h e s e f a c i li t ie s , u p t o t h is p o i n t i n t i m e . A D V K AT E H O F M E Y R : M r M a in g a n y a j u s t a f e w f o ll o w u p q u e s ti o n s there, who did the IDC engage with at S A Express? M R M A R K P H A K A M I L E M A I N G A N YA : I do not remember but I was f o r w a r d e d w i th t h e e m a i l c o r r e s p o n d e n c e , I t h i n k a t s o m e p o i n t i n ti m e 10 it w e n t a l l t h e w a y t o t h e C E O o f S A E x p r e s s . A D V K AT E H O F M E Y R : I have not seen that correspondence to the b e s t o f m y r e c o l le c ti o n s o m a y b e y o u c a n p r o v i d e t h a t t o t h e C o m m i s s i o n , b u t . . .( i n t e r v e n t io n ) M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : Ye s , y e s , w e w ill p r o v id e i t . B u t w h a t I’ m i n t e r e s te d i n is w h e th e r in y o u r t e s ti m o n y y o u s a i d t h a t t h e y w e r e g o in g t o , y o u w e r e to ld th e y w e r e g o i n g t o l a u n c h a n in v e s t i g a t io n , i s t h a t w h a t t h e y s a i d ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , t h e y s a i d w e c a n n o t te ll y o u a n y t h i n g b e c a u s e t h i s m a t te r is c u r r e n tl y i n v e s ti g a t i o n . 20 A D V K AT E H O F M E Y R : C u r r e n t ly u n d e r ? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : Ye s . D id t h a t s u g g e s t it w a s a lr e a d y b e i n g in v e s t i g a t e d , o r p u r s u a n t t o t h e m e d i a r e p o r t s i t w a s g o in g t o b e in v e s t i g a t e d ? M R M A R K P H A K A M I L E M A I N G A N YA : Page 139 of 153 I th i n k – i t g a v e m e t h e 30 AUGUST 2019 – DAY 153 i m p r e s s io n t h a t t h e r e w a s a n i n v e s t ig a ti o n u n d e r w a y, I d o n ’ t k n o w if i t w a s s ta r t e d b e c a u s e o f t h e m e d i a o r i t w a s a lr e a d y p r o c e e d i n g . A D V K AT E H O F M E Y R : W e ll i t w i ll b e u s e f u l to have that correspondence because we know from the evidence of Ms Loock that s h e r a is e d t h is f o r in v e s ti g a t io n a s e a r l y a s O c t o b e r 2 0 1 7 w i th i n S o u t h A fr ic a n Ex p r e s s , a n d i f y o u a r e e n g a g i n g th e m i n M a y o f 2 0 1 8 th a t in v e s t i g a t io n s h o u l d h a v e b e e n w e ll u n d e r w a y if n o t c o m p l e t e d b y t h e n , s o i t w o u ld b e o f i n t e r e s t t o th e C o m m is s i o n t o s e e t h a t c o r r e s p o n d e n c e if w e c a n . 10 M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : O k a y. R ig h t , t h e n e x t t h i n g I j u s t w a n t t o a s k is a f o ll o w u p , i s i t fa ir M r M a i n g a n y a to s a y b u t f o r t h e m e d ia r e p o r t i n g o n t h is is s u e t h o s e d r a w - d o w n s w o u ld h a v e o c c u r r e d ? M R M A R K P H A K A M I L E M A I N G A N YA : N o th o s e d r a w - d o w n s w e r e d e p e n d a n t o n c o n tr a c ts b e i n g p r o v id e d to I D C . A D V K AT E H O F M E Y R : W h ic h c o n tr a c ts w e r e t h o s e ? M R M A R K P H A K A M I L E M A I N G A N YA : A D V K AT E H O F M E Y R : T h e Fly A fr ic a c o n tr a c t . S o t h a t w o u ld b e a n o t h e r p r e r e q u is i t e ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . 20 A D V K AT E H O F M E Y R : B u t t h e fr a u d t h a t h a d ta k e n p la c e a n d th e ir r e g u l a r p r o c u r e m e n t in S A E x p r e s s w a s t h e s u b j e c t m a t t e r o f t h i s a r ti c l e , is t h a t r ig h t? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : S o i t c o u l d h a v e b e e n t h e c a s e th a t E M L h a d s e c u r e d o th e r c o n tr a c ts p u r s u a n t to w h ic h f u n d i n g w o u l d h a v e f l o w n b u t Page 140 of 153 30 AUGUST 2019 – DAY 153 t h is i s s u e a r o u n d S A E x p r e s s w o u l d n o t h a v e b e e n u n e a r t h e d , i s t h a t correct? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s C h a ir p e r s o n d i d h e l p u s b e c a u s e a t t h a t p o i n t i n ti m e w e h a d n o t d i s b u r s e d a n y f a c i li t y s o t h e s e a l le g a ti o n s w h e n t h e y b e c a m e a p p a r e n t to u s w e r e a li s e d th a t w e c a n n o t p r o c e e d , h e n c e w e s to p p e d f a c i li t i e s , s o th e y w e r e c r u c ia l i n u s s t o p p in g t h i s d e c is i o n , b e c a u s e I w a s n o t a w a r e a t t h a t p o i n t i n t i m e t h a t th e r e i s a n i n v e s t ig a ti o n c u r r e n t ly h a p p e n in g i n S A E x p r e s s . A D V K AT E H O F M E Y R : 10 A n d ju s t t o b e c le a r w h a t w a s n o t m a d e a v a i la b le w a s t h e s e c o n d r e q u e s t f o r f u n d in g w h i c h w a s t h e 8 . 5 m il li o n b u t b y t h i s s t a g e in M a y 2 0 1 8 t h e r e h a d a lr e a d y b e e n 1 2 . 5 m i ll io n r e l e a s e d , is th a t r i g h t? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , f o r t h e p u r c h a s e o f t h e e q u ip m e n t . A D V K AT E H O F M E Y R : W e ll a n d t h e w o r k in g c a p i ta l l o a n . M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , t h a t ’s c o r r e c t , t h a t’s correct. A D V K AT E H O F M E Y R : W h a t h a s h a p p e n e d i n r e l a ti o n t o t h a t, h a s there been repayment on that loan? 20 M R M A R K P H A K A M I L E M A I N G A N YA : S o C h a ir p e r s o n b e c a u s e w e r e fu s e d t o r e le a s e f u n d s o n t h i s f a c il i ty t h e c l ie n t c o u l d n ’ t s u p p l y a n y o th e r f u n d e r s a n d t h e n i n f e ll i n b r e a c h w i t h o u r f a c ili t ie s . What has h a p p e n e d is w e h a v e h a d t o p e r f e c t s e c u r it y, w e h a v e h a d to g o t o t h e C o u r t a n d w e ’v e p e r fe c te d o u r c o ll a te r a l a n d s o o u r s e c u r i t y th a t w e f u n d e d in t h e v e h ic l e s a n d e v e r y t h i n g w e t o o k i t u n d e r a n o r d e r o f t h e Page 141 of 153 30 AUGUST 2019 – DAY 153 Court. A D V K AT E H O F M E Y R : So just so I have it clear there was never any r e p a y m e n t o f t h e l o a n b y E M L , is th a t c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , th a t ’s c o r r e c t . A D V K AT E H O F M E Y R : T h e n i f w e c a n m o v e to p a g e 11 M r M a in g a n y a b e c a u s e t h is is w h e r e t h e f u r t h e r i n v e s ti g a ti o n s o f t h e C o m m i s s i o n . . .( i n te r v e n t io n ) CHAIRPERSON: I’ m s o r r y M s H o f m e y r, d i d y o u s a y th a t y o u – t h e r e w a s s o m e s e c u r i ty t h a t y o u c a l le d , y o u c a ll e d b a c k o r w h a t e v e r ? 10 M R M A R K P H A K A M I L E M A I N G A N YA : Ye s C h a ir p e r s o n . C H A I R P E R S O N : A n d in w h a t fo r m w a s t h a t , w h e r e w a s t h e s e c u r i ty ? M R M A R K P H A K A M I L E M A I N G A N YA : C h a ir p e r s o n w h e n t h e c li e n t c a m e t o u s h e h a d r e q u e s te d m o n e y t o p u r c h a s e . . .( in t e r v e n ti o n ) CHAIRPERSON: Equipment. M R M A R K P H A K A M I L E M A I N G A N YA : E q u i p m e n t w h ic h in c l u d e d b o w s e r s , t a n k s , s o th e s e a r e m o t o r v e h ic l e s . CHAIRPERSON: Ja. M R M A R K P H A K A M I L E M A I N G A N YA : A n d t h a t i s t h e s e c u r i ty w h ic h w e t o o k a s p a r t o f o u r f a c i li t ie s , w e r e g is te r e d a g e n e r a l , a s p e c i a l 20 n o t a r ia l b o n d o v e r th o s e a s s e ts , s o m e a n i n g w e w o u l d l o o k t o e i th e r r e a l is e t h e m to r e c o v e r t h e m o n e y t h a t w e s p e n t . C H A I R P E R S O N : B u t y o u a r e s ti ll g o i n g t o d o t h a t , y o u h a v e n ’ t r e a li s e d the money? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s C h a i r p e r s o n w e h a v e n o t r e a l is e d a t t h is s t a g e b u t w e a r e h o l d i n g t h e s e c u r i ty b e c a u s e w e h a v e Page 142 of 153 30 AUGUST 2019 – DAY 153 t o f i n d t h e b e s t w a y to r e a l is e i t s u c h t h a t t h e in s ti t u t i o n d o e s n o t s u ff e r a lo s s , s o w h i c h m a y i n c lu d e o ffe r s fr o m p r o s p e c ti v e c o m p a n ie s w h o u s e t h a t e q u i p m e n t o r i t m a y in c l u d e o t h e r o p e r a t o r s w h o a r e a b l e t o u s e t h a t fa c il i ti e s , w h ic h w e h a v e i m p r o v e d , s o w e h a v e n o t d is p o s e d o f t h e e q u ip m e n t a t t h is p o in t in ti m e b e c a u s e t h e p e r f e c ti o n o f t h e c o u r t I t h i n k w a s g r a n t e d , I d o n ’ t r e c a ll t h e d a t e , w e h a d t o g o t h r o u g h th e court process. C H A I R P E R S O N : O h y o u h a d to w a i t fo r t h e li t ig a ti o n ? M R M A R K P H A K A M I L E M A I N G A N YA : 10 Ye s w e h a d t o g o th r o u g h th e c o u r t p r o c e s s e s t o r e g is t e r th a t b o n d . C H A I R P E R S O N : J a b u t i n th e m e a n t i m e w h e n y o u ta lk a b o u t v e h i c l e s if y o u ta lk a b o u t a y e a r la t e r t h e y ’r e d e p r e c ia t in g a n d a l l o f t h a t , I’ m n o t s u g g e s t in g t h a t t h e r e m ig h t b e a b e tt e r w a y in w h ic h y o u c o u ld h a v e d o n e , I’ m j u s t s ta t in g w h a t w o u l d b e e ff e c t iv e t h e r e , j u s t s i t ti n g , i f t h e y a r e p a r k e d s o m e w h e r e fo r a y e a r b e c a u s e I g u e s s in th e n a t u r e o f y o u r jo b y o u d o n ’ t u s e t h e m y o u h a v e t o s e ll t h e m , i f t h e y a r e p a r k e d s o m e w h e r e f o r a y e a r th e y a r e d e p r e c i a ti n g . M R M A R K P H A K A M I L E M A I N G A N YA : Ye s C h a ir p e r s o n w h a t y o u a r e s a y in g is c o r r e c t a n d t h a t is w h a t h a p p e n e d i n t h e s e in s t a n c e s , i f w e 20 d e c i d e t o f o r e c l o s e , i t c o m e s a t a h u g e r i s k t o u s , th a t ’s w h y w e r e a l ly h a v e to b a la n c e t h a t d e c i s i o n w h e n t h e c li e n t c a n ’ t a ffo r d to p a y o u r f a c i li t ie s w e h a v e to t h in k w h ic h is t h e b e s t w a y t o p r o te c t w h a t w e h a v e s p e n t , b e c a u s e i f w e t a k e t h e m b a c k w e r is k s e l li n g t h e m a t a f a r d is c o u n te d p r ic e , n o w w e h a v e t o lo o k is t h e r e a n o t h e r o p e r a to r w h o i s in t h is b u s i n e s s , w h o c a n u s e t h e s e f a c ili ti e s , t h e r e fo r e s o m e ti m e s w e Page 143 of 153 30 AUGUST 2019 – DAY 153 in v i te p r o s p e c tiv e b i d d e r s , s o w e s e ll t h e b u s i n e s s a s a g o i n g c o n c e r n s o t h a t w e d o n ’ t s u ff e r a s m u c h l o s s a s w e w o u l d h a v e s u ff e r e d i f w e ju s t d i s p o s e d th e m i n d iv id u a l ly i n p i e c e s , b u t t h e c o u r t p r o c e s s e s d o a d d a n o th e r r i s k t o th a t b e c a u s e w e c a n ’ t d o a n y th in g u n ti l w e g e t le g a l r ig h t to t h o s e a s s e ts . CHAIRPERSON: W e l l I d o n ’t k n o w i f y o u a r e a b l e t o s a y t h i s , i f y o u c a n ’ t t h e n y o u c a n ’ t , I g e t t h e i m p r e s s io n t h a t y o u a r e u n li k e ly t o g e t t o r e c o v e r m u c h t h r o u g h th e m , if y o u b e a r i n m i n d e x a c t ly w h a t y o u h a d g iv e n th is c li e n t . 10 M R M A R K P H A K A M I L E M A I N G A N YA : S o i t is p o s s i b l e C h a ir p e r s o n t h a t . .. ( i n te r v e n t io n ) C H A I R P E R S O N : T h e r e a r e c h a ll e n g e s . M R M A R K P H A K A M I L E M A I N G A N YA : I d i d e n q u ir e fr o m t h e t e a m t h a t is h a n d l i n g th is w h a t i s h a p p e n in g , a n d th e y i n d ic a t e d a t t h a t s t a g e th a t t h e r e w a s a p r o s p e c ti v e o ffe r o n t h e b u s i n e s s t h a t is c l o s e t o w h a t o u r f a c i li t ie s are but I cannot say a n y th in g about that, I h a v e n ’t in t e r r o g a t e d t h e o ff e r b u t y o u a r e c o r r e c t , t h e r is k t h a t w e m a y s u ffe r is there. A D V K AT E H O F M E Y R : 20 M r M a i n g a n y a i n y o u r e x p e r ie n c e d o e s f o r e c l o s u r e u s u a lly in v o lv e l o s s ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : M r M a i n g a n y a if w e t h e n m o v e t o p a g e 11 t h is is w h e r e y o u p ic k u p a t o p ic t h e r e a t 4 . 7 i n b o l d e n t it l e d B i ll y C o b b i n a h , b e f o r e w e g o t h r o u g h t h is , b e c a u s e t h is i s r e a l ly th e c o n c l u d in g a s p e c t o f t h e e v i d e n c e C h a ir, p r i o r t o y o u r m e e ti n g s w i t h th e C o m m i s s i o n ’s Page 144 of 153 30 AUGUST 2019 – DAY 153 in v e s t i g a t o r s o n th is to p ic w e r e y o u a w a r e a t a ll th a t t h e r e m a y h a v e b e e n ir r e g u la r c o n d u c t o n t h e s i d e o f th e I D C i n r e l a t i o n to th is f u n d i n g tr a n s a c ti o n ? M R M A R K P H A K A M I L E M A I N G A N YA : I w a s n o t a w a r e . A D V K AT E H O F M E Y R : And can you then take us through what was d is c l o s e d t o y o u i n y o u r e n g a g e m e n ts w i t h t h e C o m m is s i o n , a n d th e n w h a t fu r t h e r s t e p s h a v e b e e n t a k e n b y t h e I D C in t h a t r e g a r d ? M R M A R K P H A K A M I L E M A I N G A N YA : O k a y, s o i n o u r e n g a g e m e n ts w i t h t h e C o m m is s i o n i t w a s p u t t o m e w h e t h e r I a m a w a r e t h a t Mr B il ly 10 C o b b i n a h is a t r u s t e e o f th is e n ti ty c a ll e d M a m e l a Pr o p e r t y Tr u s t , I t h e n in d i c a t e d th a t I a m n o t a w a r e a n d t h e n , b u t I w i ll g o b a c k a n d in v e s t i g a t e , s o w h e n w e w e n t b a c k t o th e o ffi c e w e i n s tr u c t e d a f o r e n s ic in v e s t i g a t io n i n to t h i s w h o l e a s p e c t o f t h i s tr a n s a c ti o n , u p o n b e c o m i n g a w a r e t h a t M r B il ly C o b b i n a h is a tr u s t e e o f th is e n t i ty w h ic h h a d in v o ic e d u s . D o y o u w a n t m e t o p r o c e e d ? A D V K AT E H O F M E Y R : Indeed. M R M A R K P H A K A M I L E M A I N G A N YA : S o t h e n th e i n v e s ti g a ti o n w a s c o n c l u d e d a n d i n d e e d i t w a s c o n fir m e d t h a t Mr B il ly C o b b in a h is a tr u s t e e a n d i t w a s a ls o c o n f ir m e d t h a t h e h a d n o t d e c l a r e d th is t o t h e 20 I D C , w e h a v e a p o l ic y th a t a ll e m p l o y e e s m u s t d e c l a r e t h e ir c o n fl ic t o f in t e r e s t , w e h a v e a c o n fl ic t o f i n te r e s t r e g i s t e r, s o h e d i d n o t d e c la r e in a n y m a n n e r i n t h a t r e g i s t e r th a t h e w a s a tr u s t e e o f t h is t h in g . And t h e n fu r t h e r m o r e d u r i n g t h e i n v e s t ig a ti o n M r C o b b i n a h c o n fir m e d t h a t h e r e c e iv e d m o n e y fr o m M r E d w a r d K o m a n e . A D V K AT E H O F M E Y R : What was the amount of the money that he Page 145 of 153 30 AUGUST 2019 – DAY 153 in d i c a t e d h e h a d r e c e iv e d ? M R M A R K P H A K A M I L E M A I N G A N YA : I t w a s R 5 0 0 0 0 . A D V K AT E H O F M E Y R : R50 000? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s . A D V K AT E H O F M E Y R : A n d h o w d i d h e r e c e i v e i t? M R M A R K P H A K A M I L E M A I N G A N YA : I t h i n k i t w a s p a i d i n c a s h . A D V K AT E H O F M E Y R : M r M a i n g a n y a w a s t h e i n t e r a c ti o n b e t w e e n ID C a n d M r C o b b in a h w h e n t h i s c o n f e s s i o n w a s m a d e r e c o r d e d ? M R M A R K P H A K A M I L E M A I N G A N YA : I u n d e r s ta n d i t w a s C h a ir p e r s o n . 10 A D V K AT E H O F M E Y R : T h a n k y o u , c e r t a in ly w h e n w e m e t p r e v i o u s ly w e d id r e q u e s t t h a t w e h a v e th a t r e c o r d i n g m a d e a v a il a b l e to u s , c o u l d y o u a s s i s t u s w i t h th a t , w e h a v e n ’ t y e t r e c e iv e d i t . M R M A R K P H A K A M I L E M A I N G A N YA : O k a y w e w il l C h a ir. A D V K AT E H O F M E Y R : B u t a s I u n d e r s t a n d i t t h e r e ’s a f o r e n s i c in v e s t i g a t io n a n d in t h e c o u r s e o f t h a t t h e r e is a n e n g a g e m e n t b e tw e e n t h e I D C a n d M r C o b b i n a h , i s t h a t c o r r e c t. M R M A R K P H A K A M I L E M A I N G A N YA : T h a t ’s c o r r e c t . A D V K AT E H O F M E Y R : Yo u in d ic a t e n o w i t w a s r e c o r d e d a n d y o u w il l m a k e t h a t r e c o r d i n g a v a il a b l e t o u s , c o r r e c t ? 20 M R M A R K P H A K A M I L E M A I N G A N YA : C o r r e c t . A D V K AT E H O F M E Y R : A n d in th a t i n t e r a c ti o n M r C o b b in a h a d mi t s t o h a v i n g r e c e iv e d R 5 0 0 0 0 in c a s h f r o m M r E d w a r d K o m a n e , i s th a t correct? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t ’s c o r r e c t . A D V K AT E H O F M E Y R : W h a t th e n f o ll o w e d i n r e l a t i o n t o Mr C o b b i n a h ? Page 146 of 153 30 AUGUST 2019 – DAY 153 M R M A R K P H A K A M I L E M A I N G A N YA : I n r e l a t i o n to Mr C o b b i n a h w e in s t i tu t e d a d is c ip li n a r y h e a r in g , a n d t h e n o n c o n c l u s io n h e w a s f o u n d g u il ty o f th e c h a r g e s t h a t w e r e p u t t o h i m , b e in g fa il u r e to d e c l a r e , a n d a b r e a c h o f o u r c o d e o f c o n d u c t in a c c e p t in g th is p a y m e n t, h e w a s f o u n d g u i l ty a n d i t w a s r e c o m m e n d e d t h a t h e b e d is m is s e d , a n d h e h a s b e e n d is m is s e d a n d th e n w e r e p o r t e d t h is m a t te r t o th e P o lic e a s w e ll , we opened a case against him. A D V K AT E H O F M E Y R : I u n d e r s t a n d fr o m y o u r s u p p le m e n t a r y a ffi d a v i t t h a t M r C o b b i n a h a ls o i n d ic a t e d t o y o u f u r t h e r i n fo r m a t i o n i n r e l a ti o n t o 10 M r R a m a ’s i n v o l v e m e n t i n t h e f u n d i n g tr a n s a c ti o n , c a n y o u e x p l a i n t o u s w h a t Mr C o b b in a h r e l a y e d t o y o u ? M R M A R K P H A K A M I L E M A I N G A N YA : S o h e a l s o i n d ic a te d t h a t h e m a d e a s i m il a r o ff e r, h i m M r C o b b i n a h , to M r R a m a t h a t h e w il l a ls o b e g iv e n R 5 0 0 0 0 i f h e a s s is ts in g e t t in g th e s e t r a n s a c t io n s a p p r o v e d . A D V K AT E H O F M E Y R : A n d d i d y o u t a k e t h a t f u r th e r w i t h Mr R a m a ? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , h e w a s i n c l u d e d a s p a r t o f t h e in v e s ti g a t io n f o r – f ir s t to a s c e r t a in t h e fa c t w h e th e r it is c o r r e c t , h e d i d a ls o a d mi t th a t is c o r r e c t t h a t a n o ffe r o f a n a m o u n t w a s m a d e to h i m , h e d o e s n o t i n d ic a te w h a t t h e a m o u n t w a s , b u t h e c o n fir m e d t h a t 20 t h is w a s m a d e a n d t h e n t h a t w a s a ls o n o t r e p o r t e d to t h e I D C , s o w e a ls o in s ti t u t e d d is c i p l in a r y h e a r i n g s a g a in s t M r R a m a , a n d w e s t a r t e d t h e h e a r i n g s , a n d t h e n b e fo r e w e c o u l d c o n c l u d e M r R a m a r e s i g n e d fr o m t h e ID C , s o t h a t d is c ip li n a r y h e a r i n g c o u l d n ’ t b e c o n c l u d e d b u t a ls o a c a s e a g a i n s t h i m w a s r e p o r t e d w it h t h e S A P o l ic e . A D V K AT E H O F M E Y R : Thank you. M r M a i n g a n y a in s o f a r a s t h e Page 147 of 153 30 AUGUST 2019 – DAY 153 e v i d e n c e t h a t y o u h a v e p r e s e n te d h e r e to d a y is c o n c e r n e d th e r e ’s c e r t a i n j u s t c o n c lu d in g a s p e c ts t h a t I w o u l d l ik e to g e t y o u r c o m m e n t o n if I m a y, a n d i t is r e a ll y i n a n e ff o r t to tr y a n d d r a w t o g e th e r w h a t e v i d e n c e w e h a v e h e a r d fr o m y o u t o d a y. T h e fir s t is t h a t d o y o u a g r e e th a t p u r s u a n t t o b e i n g m a d e a w a r e o f t h e in f o r m a ti o n r e la t e d t o M r C o b b in a h in p a r t ic u l a r b y th e C o m m i s s i o n th e I D C h a s e s t a b li s h e d t h a t c o r r u p ti o n d i d t a k e p l a c e i n t h is f u n d in g tr a n s a c t i o n . M R M A R K P H A K A M I L E M A I N G A N YA : C o r r e c t . 10 A D V K AT E H O F M E Y R : A n d I a ls o w o u l d l ik e to s u g g e s t t o y o u t h a t i n t h e c o u r s e o f t h e e v id e n c e i t h a s b e c o m e c le a r t h a t c e r t a i n a s p e c t s o f t h e I D C ’s p r o c e s s in d e c id in g t o fu n d E M L E n e r g y w a s i n a d e q u a t e , a n d I w o u l d lik e t o g iv e y o u t h e r e s p e c t s i n w h ic h I s u g g e s t t h e y w e r e in a d e q u a t e f o r y o u r c o m m e n t . T h e f ir s t i s t h a t th is a p p l ic a ti o n s h o u l d n e v e r h a v e b e e n p r e - a p p r o v e d fo r M C E P f u n d i n g , d o y o u a g r e e w i t h that? M R M A R K P H A K A M I L E M A I N G A N YA : C a n I c o m m e n t o n th a t o n e ? A D V K AT E H O F M E Y R : I n d e e d . M R M A R K P H A K A M I L E M A I N G A N YA : S o C h a ir p e r s o n o n th a t o n e th e 20 c o n fir m a t io n fr o m D T I t h a t t h is i s n o t in c lu d e d c a m e p o s t- a p p r o v a l o f t h e tr a n s a c t io n , a y e a r la t e r. W h a t t h e t e a m i n d ic a te d is th a t in th e ir m o t iv a t i o n th e y a n ti c i p a t e d t h a t th e r e w o u ld b e b le n d i n g a n d v a l u e a d d a n d a s p a r t o f o u r p r o c e s s e s to a p p r o v e t h is tr a n s a c ti o n s w e d o i n v i t e t h e M C E P p e o p l e to s i t in o u r c r e d i t c o m m i t te e , s o a t t h a t p o in t w h e n w e a p p r o v e t h is tr a n s a c ti o n t h e y w e r e a ls o p a r t o f t h e c r e d i t c o m m i t t e e , Page 148 of 153 30 AUGUST 2019 – DAY 153 s o t h e c o m m i t t e e d i d n ’ t ta k e t h a t d e c i s i o n l i g h t ly, it w a s t o g e th e r w it h t h e p e o p l e w h o a r e r e s p o n s ib l e M C E P a n d a t t h a t p o i n t i n t i m e i t w a s n o t c l e a r t h a t t h is p a r t ic u l a r i n d u s tr y d o e s n ’ t q u a l if y f o r M C E P s o i t w a s m a d e c l e a r e r b y D T I a y e a r la t e r, s o I a g r e e , n o w t h a t w e k n o w b u t a t t h a t ti m e w e d id n ’t k n o w t h a t i t d o e s n ’ t q u a li fy fo r M C E P. A D V K AT E H O F M E Y R : M r M a i n g a n y a i f I c a n ju s t f o l lo w t h a t u p , i t w a s a fa ls e r e p r e s e n t a t i o n t o t h a t c o m m i t t e e th a t E M L w a s in v o lv e d i n b l e n d in g a t a ll , w a s n ’t i t? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , E M L w a s n o t in b l e n d i n g a s 10 f a r i t w a s in d ic a t e d , s o w h a t t h e t e a m m o t iv a t e d a s I u n d e r s t a n d it , b e c a u s e I w a s n o t in t h a t m e e t in g , th a t t h a t w a s a n tic i p a t e d t o h a p p e n la t e r b u t a t t h a t ti m e i t w a s n o t in b l e n d i n g a t a l l . A D V K AT E H O F M E Y R : W e l l w h e n – a s I h a v e y o u r a ffi d a v it w h e n M r C o b b i n a h w a s p r e s s e d o n t h is w i t h y o u h e d i d n ’ t u s e l a n g u a g e a b o u t a n t ic i p a ti o n , h e s a i d h e q u a l if i e d t h e m a s p r e - a p p r o v e d f o r M C E P b e c a u s e E M L w a s i n v o lv e d in b le n d i n g a n d v a l u e a d d , d id I r e c a ll y o u r a ffi d a v i t i n c o r r e c t ly ? M R M A R K P H A K A M I L E M A I N G A N YA : N o I t h in k h e s a id t h e r e w a s going to be blending. 20 A D V K AT E H O F M E Y R : O h , I d i d n ’ t r e a d y o u r a ff i d a v i t i n t h a t w a y. B u t y o u a c c e p t n o w th a t i t s h o u l d n o t h a v e q u a li fi e d is t h a t c o r r e c t ? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t ’s c o r r e c t . A D V K AT E H O F M E Y R : A n d y o u a c c e p t t h a t i t w a s f a ls e ly r e p r e s e n te d a t t h e ti m e t h a t t h e y w e r e i n v o l v e d i n b l e n d in g i f t h a t h a d b e e n t h e r e p r e s e n t a ti o n ? Page 149 of 153 30 AUGUST 2019 – DAY 153 M R M A R K P H A K A M I L E M A I N G A N YA : C h a ir p e r s o n .. .( i n t e r v e n ti o n ) C H A I R P E R S O N : Is th a t t h e s a m e t h a t t h e t w o o f y o u h a v e j u s t t a lk e d a b o u t? A D V K AT E H O F M E Y R : I n d e e d . CHAIRPERSON: W h e r e h e s a y s h e u n d e r s t a n d s t h a t t h e y s a id i t w a s going to happen. A D V K AT E H O F M E Y R : I n d e e d . M R M A R K P H A K A M I L E M A I N G A N YA : Ye s C h a i r p e r s o n . C H A I R P E R S O N : Ye s ? 10 M R M A R K P H A K A M I L E M A I N G A N YA : S o I a m tr y i n g to s a y I d o n o t k n o w i f t h e t e a m i n te n ti o n a ll y n a m e d a f a l s e r e p r e s e n t a ti o n o r w h e t h e r t h e y u n d e r s t o o d th a t i t w o u ld q u a l i fy t h e n , s o t h a t is w h a t I a m tr y in g t o s a y, I d o n o t k n o w i f t h e y i n t e n t io n a l ly m a d e a f a ls e r e p r e s e n t a ti o n o r t h e y u n d e r s to o d i t t o b e v a lu e a d d in g a t t h a t p o i n t i n t i m e . A D V K AT E H O F M E Y R : W a s th a t a n a s p e c t t h a t w a s tr a v e r s e d w i th M r C o b b i n a h in h i s d is c i p l in a r y ? M R M A R K P H A K A M I L E M A I N G A N YA : I f I a m c o r r e c t i n h is d is c i p l in a r y h e w a s s ti ll a s s e r t in g t h a t i t q u a li fi e s . A D V K AT E H O F M E Y R : T h a n k y o u . T h e r e w a s a n e r r o r i n t h e c a s h f lo w 20 f o r e c a s t t h a t w a s d o n e , th a t w a s n o t p i c k e d u p b y th e I D C , is t h a t correct? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t ’s c o r r e c t . A D V K AT E H O F M E Y R : A n d t h e r e w a s a n u n a u t h o r is e d p a y m e n t fo r a c o n s u l t a n t fo r fa c i li t a ti o n th a t t o o k p la c e n o tw i th s ta n d i n g w h ic h t h e r e w a s f u r t h e r a p p r o v e d f u n d in g to b e g iv e n t o E M L ? Page 150 of 153 30 AUGUST 2019 – DAY 153 M R M A R K P H A K A M I L E M A I N G A N YA : C o r r e c t . CHAIRPERSON: I ’ m s o r r y, j u s t b e f o r e y o u r n e x t q u e s ti o n , is i t a c c e p te d t h a t w h o e v e r m a d e th a t p a y m e n t o r m a d e th e d e c is i o n t h a t p a y m e n t b e m a d e , th e 1 . 5 , th a t – n o I t h in k I m a y b e c o n f u s in g th is , fr o m ID C y o u j u s t m a d e a p a y m e n t to th e c li e n t a n d t h e u n d e r s t a n d i n g w a s t h a t t h e c li e n t k n e w fr o m w h a t th e y h a d b e e n t o ld th a t I D C is n o t g o i n g t o p a y t h is 1 .5 , is th a t r i g h t? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s C h a ir th a t w a s a w r i t te n in s t r u c t i o n t o t h e c l ie n t . 10 CHAIRPERSON: Ye s , y e s s o t h e a c t u a l p a y m e n t t o M a m e l a Tr u s t w o u ld h a v e b e e n fr o m t h e c li e n t t o M a m e la Tr u s t? M R M A R K P H A K A M I L E M A I N G A N YA : T h a t ’s c o r r e c t C h a ir. C H A I R P E R S O N : A n d n o t fr o m I D C a s a p a y m e n t to M a m e l a Tr u s t. M R M A R K P H A K A M I L E M A I N G A N YA : T h a t ’s c o r r e c t C h a ir, th a t ’s c o r r e c t , i t w a s m a d e b y th e c li e n t . C H A I R P E R S O N : O k a y. A D V K AT E H O F M E Y R : In d e e d , b u t j u s t t o f o l lo w t h a t u p C h a ir t h a t w a s k n o w n t o th e I D C t h a t t h a t p a y m e n t h a d b e e n m a d e w h e n i t d e c i d e d t o provide further funding? 20 M R M A R K P H A K A M I L E M A I N G A N YA : Ye s C h a i r p e r s o n , t h is i s 2 0 1 8 n o w, w h e n i t h a s b e c o m e k n o w n t o th e ID C . A D V K AT E H O F M E Y R : Thank you. M r M a in g a n y a t h e r e a r e c e r t a in r e p o r t in g o b li g a ti o n s u n d e r P F M A f o r t h e ID C in r e la t io n to ir r e g u la r e x p e n d i t u r e a n d l o s s e s r e s u l t in g fr o m c r i m i n a l c o n d u c t, a r e y o u a w a r e o f t h o s e p r o v is io n s ? Page 151 of 153 30 AUGUST 2019 – DAY 153 M R M A R K P H A K A M I L E M A I N G A N YA : Ye s , y e s . A D V K AT E H O F M E Y R : Is it t h e I D C ’s i n t e n ti o n t o r e p o r t o n t h i s a s p e c t in s o f a r a s t h e r e h a s b e e n lo s s e s i n c u r r e d b y i t r e s u l t a n t fr o m t h is conduct? M R M A R K P H A K A M I L E M A I N G A N YA : Ye s C h a ir p e r s o n w e d o r e p o r t them in our annual report. A D V K AT E H O F M E Y R : Thank you. A n d i n g o i n g fo r w a r d is t h e I D C in t e n d in g t o p u t a n y o t h e r m e a s u r e s in p l a c e to n o t p e r m i t a r e p e a t o f t h is ty p e o f c o r r u p t a c t iv i t y ? 10 M R M A R K P H A K A M I L E M A I N G A N YA : Ye s C h a ir p e r s o n w e h a v e c e r t a i n l y l e a r n t a l o t fr o m t h is e x p e r i e n c e , fi r s t in t e r m s o f e n h a n c in g o u r d u e d i li g e n c e p r o c e s s e s , I t h in k w it h r e g a r d t o v e r i fy i n g t h e c o n tr a c t w e c o u l d h a v e d o n e m o r e w o r k i n th a t r e g a r d . A ls o w i t h r e g a r d s t o th e r e v i e w p r o c e s s e s o n d u e d i li g e n c e , I t h in k w e n e e d t o e n h a n c e t h a t p r o c e s s t o a v o id t h e r e o c c u r r e n c e o f t h e s e e r r o r s , a n d w e h a v e a l s o lo o k i n g a t a ll o t h e r tr a n s a c t i o n s t h a t w e a p p r o v e d i n v o l v i n g s o m e o f t h e s e i n d i v i d u a ls t o i d e n t i fy i f t h e r e a r e a n y o t h e r e v e n ts o f a s i m il a r n a tu r e , a n d b a s e d o n t h o s e f in d i n g s w e w i ll e n h a n c e o u r processes. 20 A D V K AT E H O F M E Y R : T h a n k y o u C h a ir, t h o s e a r e o u r q u e s t i o n s . C H A I R P E R S O N : T h a n k y o u v e r y m u c h Mr M a in g a n y a , if a n e e d a r is e s f o r t h e C o m m is s i o n t o a s k y o u t o c o m e b a c k w e w i ll a s k y o u , b u t f o r now you are excused, thank you very much. M R M A R K P H A K A M I L E M A I N G A N YA : T h a n k y o u C h a ir p e r s o n . C H A I R P E R S O N : O k a y. N e x t w e e k i t is S A B C a n d . .. I t h i n k , j a . Page 152 of 153 30 AUGUST 2019 – DAY 153 A D V K AT E H O F M E Y R : A s I h a v e i t C h a ir. C H A I R P E R S O N : Ye s , y e s , w e w il l a d j o u r n fo r t h e d a y. W e a d jo u r n . I N Q U I R Y A D J O U R N S TO 2 S E P T E M B E R 2 0 1 9 10 Page 153 of 153