Ivan Herselman. Picture: FREDDY MAVUNDA

Ivan Herselman. Picture: FREDDY MAVUNDA

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WHAT IT MEANS: Directors of BnP to face charges of fraud. Outa hopes the case will lead to more charges.

Charges of fraud are to be laid against two companies’ directors who planned to benefit from a deal to refinance SAA’s R15bn in debt.

Ivan Herselman, legal director of the Organisation Undoing Tax Abuse (Outa), intends to lay fraud charges against the directors of BnP Capital and Inline Trading 10 this month.

BnP and Inline were joint-venture partners in a plan to advise SAA on its finances. BnP was later appointed by SAA to raise R15bn on its behalf to allow the cash-strapped airline to refinance its debt.

The deal, which would have been worth as much as R256m for the financiers, was exposed and cancelled. It never went out to tender properly, BnP did not have a valid FSB licence and SAA’s treasurer said it could be done at a fraction of the cost.

Those likely to be charged are BnP director Daniel Mahlangu and Inline directors Brandon King and Kau (Klaas) Maruna.

The partnership is one of the many puzzles in a scheme hatched at SAA to involve the little-known BnP Capital.

Herselman says it is possible that, by investigating the fraud charges, the reason for the relationship will become clearer.

Available information offers little to support the basis of the partnership between BnP Capital, a "boutique financier", and Inline, which was a second-hand car dealership. King saysInline has been "dormant for about 18 months".

King denies any knowledge of the plan between Inline and BnP and SAA, and says he has no idea why he was named as a project director for the deal.

"I resigned from that company in February," King says, adding that he had provided proof of his resignation to Outa.

"I buy and sell cars for a living and I have a really good name in the industry.

"I don’t want anything like this to tarnish my reputation. I think you need to look at the connection between BnP and the guy who was suspended from Nedbank," King says.

More than a month ago Nedbank suspended Masotsha Mngadi, a senior employee of the bank who dealt with state-owned companies, because of his apparent moonlighting as an advisor for BnP. The Sunday Times reported that Mngadi had sent e-mails to SAA inquiring about the transaction on behalf of BnP.

Nedbank spokesman Esme Arendse says the investigation into Mngadi is not over and the bank couldn’t comment any further.

Questions about other Inline directors also need answers. King says Maruma had worked as a driver for Inline and now works for him at his new business, Blue Ray 2, also as a driver.

"Klaas Maruma is a driver. He collects and delivers cars and does licensing. Klaas is almost an innocent bystander in this."

In a previous interview King explained how he had been pulled into the mess.

He said a former employee at Inline, Eric Mbedzi, had been intent on taking over what remained of the business to pursue BEE deals.

But Mbedzi died within days of King’s resignation as a director. King’s accountant, Jean Pierre le Roux of JCB Incorporated Chartered Accountants, said in an e-mail on July 19 that "we haven’t actioned as yet [King’s resignation] due to the other nominated director [passing] shortly after [he] resigned."

Herselman says the relationship between Inline and BnP is a mystery. "There was no commercial rationale or benefit that Inline would bring to a deal like that," he says.

King is unequivocal that he is not involved in the transaction.

One of the charges of fraud that the police will be asked to investigate is the inclusion of King as a project director without his knowledge, Herselman says.

Another is Mahlangu’s failure to disclose to SAA the problems BnP had with the FSB.

The FSB suspended BnP’s licence in April as Mahlangu was not a "fit and proper" person because he had not completed certain FSB exams required of a director of a firm with a financial service provider licence.

Inline had a valid financial services provider licence number, provided by Insurancewise, when King was doing business through Inline.

However, this lapsed once he started his new business. It is possible BnP had hoped to use the licence number that was still on Inline’s letterhead. But Insurancewise says Inline does not have permission to use it.

The fraud investigation is also expected to uncover new information about the deal, which Outa may be able to use in further action against others, including SAA executives.

Last month finance minister Pravin Gordhan said he would look into the cancelled deal to see if BnP’s appointment transgressed the Public Finance Management Act.