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The Industrial Development Corporation has learnt that it should strengthen its due diligence processes when awarding financing, the State Capture commission of inquiry heard.
The inquiry, led by Deputy Chief Justice Raymond Zondo, on Friday heard evidence from the IDC's chief risk officer Mark Mainganya. The IDC is a national development financing institution, which funds small enterprises with the purpose of driving development.
The IDC in 2017 extended loans to the value of R12.5m to a company – EML Energy – which tendered for a contract with SA Express to supply jet fuel to an airport at Pilanesburg.
EML eventually won the bid, but the inquiry has since heard evidence from previous witnesses that the procurement process in the awarding of the tender was flawed and that EML supplied more fuel than was needed, Fin24 previously reported.
When asked by evidence leader Advocate Kate Hofmeyr if the IDC had been aware that EML would supply up to 8 million litres of petrol at Pilanesburg, "widely bigger" than the litres needed annually, Mainganya said the IDC was not aware of that.
Furthermore, when it agreed to extending loans to EML, the IDC did not detect this when it conducted assessments on the fuel supplier.
"We have certainly learnt a lot from this process, firstly in enhancing our due diligence process," he told the commission.
EML in May 2018 requested further funding to the value of R8.5m from the IDC, which was granted. However drawdowns were halted following media reports of fraud and corruption relating to EML's contract with SA Express, Mainganya said.
To this date, none of the funds have been disbursed for the R8.5m loan.
Mainganya also told the commission that it had not received any payments due on the previous loans granted to EML.
