Major elements of state capture are set to be tested in court against one of its alleged architects. An amaBhungane report says the Transnet Second Defined Benefit Fund (TSDBF) has thrown the state capture book at Eric Wood.

In court papers it spells out damning allegations of ‘serious criminal conduct’ against Wood, whom the fund accuses of setting up a scheme to launder the proceeds of corrupt contracts the Guptas swung the way of Regiments Capital.

Regiments is the financial services company where Wood was a director before a fallout with his co-directors over the terms of his departure to Trillian, a successor company set up by Gupta lieutenant Salim Essa, notes amaBhungane. Wood, who is still a Regiments shareholder, launched an urgent application seeking to prevent the TSDBF from executing an agreement to claw back R500m in damages from Regiments.

The deal would settle (at a discount) R825m in claims by the fund against the Regiments group, based on Regiments' allegedly corrupt appointment to manage the fund's assets.

Litha Nyhonyha and Niven Pillay, the majority shareholders and remaining directors in Regiments, are fingered as ‘co-conspirators’ with Wood – but they have signed the deal with the TSDBF, partly, it seems, to try to regain control of Regiments, which has had all its assets frozen by the fund.

Wood has gone to court to quash the deal, claiming his former colleagues are using the company's money to save themselves, leaving him to face the music.

The TSDBF has hit back hard, setting out in detail the evidence of Wood's role in arrangements which saw more than 50% of Regiments' revenues from Transnet funnelled off to letterbox companies the fund says were fronts for the Guptas, notes the amaBhungane report.

‘The Fund has been a victim of state capture related crimes perpetrated by Wood and … the Regiments respondents (Nyhonyha and Pillay and the companies they control)...State capture related crimes in which Wood has been centrally involved have caused the fund to suffer damages running into hundreds of millions of rands,’ the TSDBF says.

The settlement agreement which Wood seeks to interdict would compensate the TSDBF to the tune of R500m plus a 10% discount on the market value of 810 230 Capitec shares that Regiments controls as a result of a 2006 empowerment deal. (The settlement would involve the TSDBF buying all of these Capitec shares, the first R500m at Regiments' expense).

Full amaBhungane report