Opening round ended inconclusively

Firstrand has stepped up its investigation of board member Mac Maharaj, after a first round of inquiries ended inconclusively.

FirstRand's decision to hire auditors Deloitte & Touche to conduct a forensic audit after a first investigation by legal firm Hofmeyer Herbstein Gihwala and Cluver proved inconclusive underlines how seriously the bank is taking the investigation.

At the centre of the investigation is the CEO of Nkobi Holdings and many other companies, Schabir Shaik. Shaik is alleged to have made a series of deposits totalling R500 000 into the bank account of former transport minister Maharaj. FirstRand and Maharaj agreed he would stand down pending an investigation.

Companies associated with Shaik won contracts during Maharaj's term , including the privatisation of the N3 toll road from Johannesburg to Durban .

Shaik said he was co-operating with the investigation and was confident no wrongdoing would be uncovered, but declined to say exactly what the payments were about.

He said: "There is nothing in that entire transaction that unsettles me and that I would recognise as untoward or illegal. I am very comfortable, and the facts will speak for themselves."

The transactions constitute a huge public relations headache for FirstRand, particularly because the bank is a member of the N3 Toll Road Consortium, which raises questions about why it hired Maharaj immediately after he left politics in 1999.

Shaik said several road maintenance and toll contracts his companies are involved in were granted after Maharaj left office. Although the tendering process began during Maharaj's term, the contracts were concluded during the term of Transport Minister Dullah Omar, who succeeded Maharaj, including Durban's N2 South and N2 North.

Shaik also pointed out that the original award for the N3 was granted to an opposing consortium, and was overturned after an investigation by the tender board.

Neither Maharaj nor Shaik seems prepared to say why so much money was moving between their accounts. Without an explanation, questions will continue to be asked.

With acknowledgements to Tim Cohen and Business Day.