- Anoj Singh said he did not put anyone under pressure to approve or accept a lower hurdle rate for Transnet's locomotive deal.
- A chartered accountant body said Singh changed the hurdle rate for the locomotive deal from 18.56% to a lower rate of 15.2%.
- The institute said Singh did this to hide the fact that the project was not seeing a profit from the Transnet board.
Former Transnet chief financial officer Anoj Singh told the State Capture Inquiry that he did not fiddle with the minimum rate of return for locomotives at Transnet to hide from executives that a project was no longer profitable.
Singh took to the commission, chaired by deputy chief justice Raymond Zondo, on Monday evening to maintain his innocence, despite evidence from other commission witnesses and a damning chartered accountant body's report fingering him for wrongdoing.
In August last year, the South African Institute of Chartered Accountants (Saica) stripped Singh of his status as a chartered accountant, finding that he was "dishonest" and "negligent" in the performance of his duties.
Amongst other charges, Saica found that Singh changed the hurdle rate for a locomotive deal from 18.56% to a lower rate of 15.2%. The institute said Singh did this to hide the fact that the project was not seeing a profit from the Transnet board.
The session also cited evidence from former Transnet Freight Rail executive manager Yousuf Laher, who testified in October last year that two projects, the procurement of 1000 locomotives and then another 100, were approved at Singh's instruction.
Singh said the locomotives were purchased to generate their own cash for the business, so Transnet had to apply the calculations of net present value with a "hurdle rate" including escalation of costs and inflation over 30 to 50 years.
"This seeks to ensure that over the life of these locomotives predict the cashflows of the locomotive over life and present value to the current day. If you take all of the cashflows they will create, less all of the costs and capital costs associated with the acquisition, you will get R11.68 billion profit in today's terms," said Singh.
Evidence leader Advocate Anton Myburgh asked Singh if the first hurdle rate was used in the original business case, and if so, whether Transnet would have generated a loss. Singh responded "yes" to both questions.
Myburgh asked Singh where the 15.2% hurdle rate come from, to which Singh replied that hurdle rates get reviewed annually and that when the changes occur they are approved by the Transnet executive committee.
Singh denied giving anyone, including Laher the figure of 15.2%. Singh however acknowledged that the hurdle rate fell under his responsibility as of the chief financial officer acting chair of the capital committee during a meeting that discussed the matter.
The evening session of the commission on Monday discussed how the price of R38.6 billion for the locomotives was settled on without considering foreign exchange, hedging and forex costs.
The business case the board approved did not include that detail. Instead it said the costs were excluded. Singh testified that his office's general manager Yusuf Mohamed made changes and he was not aware of them.