OTTAWA - Canada's export credit agency says it regrets its 2015 decision to lend US$41 million to a South African company owned by members of a family facing corruption allegations related to their ties to former president Jacob Zuma.
In the months and years that followed, the agency became increasingly concerned about the loan it provided to Westdawn Investments to backstop the sale of a Bombardier luxury jet, Export Development Canada executive vice-president Carl Burlock said Wednesday.
Over that time, he said, allegations related to corruption and political interference were mounting against members of the Gupta family, which owns the company.
"We do regret this transaction, which resulted in us having a business relationship with the Gupta family," Burlock said in an interview following the agency's release of a public statement admitting its error.
"It's true we did see risks during our due diligence prior to providing the loan and we chose to proceed. And we acknowledge now that that decision was a mistake."
The deal was first reported by the Globe and Mail newspaper in August 2017. The Globe reported that the money helped the wealthy Gupta family, which has been closely connected to Zuma, buy a $52-million Global 6000 jet from Montreal-based Bombardier.
Export Development Canada, a Crown corporation that backs loans and provides insurance, ended its business relationship with Westdawn in December 2017.
The agency's decision to support the purchase, Burlock said, was in line with its international commitments under the Organization for Economic Co-operation and Development. It also relied on the fact there were no formal charges or active investigations related to the allegations.
The process flagged political influence concerns, but he added that it lacked an in-depth probe into the risks related to people who hold, or have held, powerful public positions.
Burlock insisted the Westdawn deal has taught the agency some "powerful lessons," helped it fill gaps and make changes to how it makes its decisions.
He said the agency decided to make a public statement of regret after hearing from its stakeholders that they expected a higher level of transparency.
"We have learned and taken things away from this transaction," he said. "It's resulted in improved screening and today we would not proceed with a transaction that features the same kind of risk profile."
Zuma resigned as South Africa's president in 2018 after a near-decade-long tenure marked by persistent corruption allegations.
Westdawn has filed a lawsuit in the United Kingdom against the agency to contest the deal's termination, he said. The litigation is still before the courts.