Behind state capture probe, the good, the bad, and the ugly

Sleepless nights; early mornings; plenty of coffee; wading through mountains of paper; non-stop boardroom meetings; enduring resistance; and threats from those being probed for their involvement in state capture, which cost the country billions under the Jacob Zuma administration.

This is what MNS Attorneys co-founder Tshiamo Sedumedi, director Thobani Mnyandu and their key legal and forensic team of experts went through when digging deep in probing the scale of the state capture phenomenon that gripped state-owned enterprise (SOE) Transnet – threatening its collapse.

While modest about their cutting-edge forensic probe and unassailable findings, which assisted South Africa’s
biggest post-apartheid graft inquiry, MNS in Johannesburg’s leafy suburb of Illovo, has been the engine behind
the Commission of Inquiry into State Capture, chaired by Deputy Chief Justice Raymond Zondo.

“There was a serious pushback campaign by certain individuals who were implicated in our reports and threats. They sought to discredit our findings, which were based on the application of the law – through different media platforms,” said Sedumedi.

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“In terms of character-building and on forensic investigations, we learnt not to take things for granted, interrogating every document we came across. We were mindful of the fact that, what we put out in the public domain would be severely criticised.

“With these guys siphoning money from state coffers for all these years – remember they still had their lieutenants
left at Transnet – there were moments of frustration when the information we wanted was not easily forthcoming or
delayed.”

Sedumedi said they would go to the media and rubbish them – “a pressure that required mental strength” to deal
with. “

“When we stood firm on our findings, the noise subsided. Zondo came and validated what we were criticised for and
now we have the last laugh.” MNS was appointed by Zondo in 2018, to probe the R1.2 billion relocation of Transnet’s
assembly plant from Gauteng to Durban and the procurement of locomotives, which ballooned from an initial estimated cost of R38.6 billion to R54 billion – under the watch of then CEO Siyabonga Gama and chief financial officer Anoj Singh.

Sedumedi and Mnyandu said they were vindicated that their findings on Transnet were incorporated in Zondo’s reports on the depth of state capture at the multi-billion-rand worth SOE – “proving our fierce critics wrong – hard work that eventually paid off”.

On the MNS reports, which Zondo and evidence leaders reflected on during cross-examination of witnesses, Sedumedi said in seeing that most of the findings they made have found expression in the Zondo reports, “is something giving us a good morale-booster”.

“Our reports were tested when Zondo gave those who were implicated an opportunity to rebut the allegations – something which came to naught. We are happy to have been able to play a small part in unravelling some of the things that went wrong at Transnet.”

Mnyandu said it may be difficult for people to understand or comprehend that they went through millions of documents in a very short space of time in order to unravel each of the irregularities uncovered by the investigation.

“In terms of deploying resources, we were stretched – deploying everybody who was available to assist. From an administrative perspective, we had to generate documents, which had to be copied,” he said.

“We spent various days and sleepless nights making sure that we get to the bottom of each of the findings we had to present at the Zondo commission.”

Asked whether the findings would change the manner in which Transnet would conduct business in the
future, Sedumedi said Transnet had systems in place, which were deliberately flouted.

“The outcomes of the investigation and findings were about testing how strong Transnet systems were.

“After the findings, Transnet has to do serious thinking from a governance point of view. The previous board relied on the executives to ratify questionable transactions. By virtue of the board approving transactions – from a fiduciary duty and governance point of view – officials failed to ask whether it was a legitimate thing to do in pushing
somebody’s agenda.”

Sedumedi said there should now be a strong shift on how Transnet conducts business. On the massive relocation of
the assembly plant to Durban, Mnyandu said: “When the tender was initially issued, everybody laboured under the belief that manufacturing would be housed in one base – Koedoespoort in Pretoria.

“Before the contracts were awarded and during the negotiations, it emerged from the PriceWaterhouseCoopers report that advice was given, making it clear that it would be impossible to have four companies manufacturing in the same base because of intellectual property and skills sets which had to be protected.”

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He said two companies had to be based elsewhere and Durban was recommended.

“But they needed to make sure the facilities in Durban were properly set up. There were variation orders that were agreed to, with people manufacturing from Durban claiming that they needed to be reimbursed with monies in the aggregate of R1.2 billion – something which was never evaluated or considered by Transnet, only accepted at face
value.”

Mnyandu said MNS advised Transnet to stop the payments, amid several hundred millions already lost. “Transnet was advised to make sure it got fair market value for the money it spent and that there was clarity on how each project was going to be rolled out.”

Sedumedi and Mnyandu said the law firm – turning 20 years this year – learned a lot from the state capture project.

“Handling an investigation of this magnitude and thereafter having given a preliminary report and being further entrusted with investigations in respect of incidental acquisitions on locomotives by Transnet, meant a great deal of learning,” said Mnyandu.

– brians@citizen.co.za