Car boots full of cash were ‘an open secret’ at Transnet – Makgatho

“It was an open secret that certain car boots were full of cash.”

These were the words of former Transnet group treasurer Mathane Makgatho, describing to the Commission of Inquiry into State Capture the shamelessness behind the capture of South Africa’s biggest state-owned enterprise (SOE).

In wrapping up her testimony yesterday before Deputy Chief Justice Raymond Zondo, Makgatho said the money flow at Transnet was “an open secret” in the corridors of the SOE, where multibillion-rand locomotive deals were concluded, with Gupta-linked Regiments Capital having replaced group treasury in negotiations with bidding companies.

The impact of the graft that engulfed the SOE under the stewardship of Brian Molefe as chief executive and Anoj Singh as chief financial officer is still being felt today.

Makgatho claimed certain officials’ car boots were known to be filled with cash.

She also explained how she prevented R750 million from being stolen from Transnet, and prevented Singh from effecting a R5 billion loan from Nedbank through Regiments Capital.

At the centre of the tension between Makgatho, Singh and Molefe was her opposition to the “expensive” proposal for Transnet to agree to the China Development Bank (CDB) funding facility, which cost the company R3.7 billion.

“I told them that the CDB facility in its form was not in the best interests of the company or the country, given the potential capital leakage of up to R3.7 billion, which may be classified as a PFMA [Public Finance Management Act] violation. They were trying to persuade me but I would not change my recommendations,” said Makgatho.

Molefe allegedly responded by calling a meeting with Regiments directors to resolve the CDB pricing proposal.

Makgatho complained to Singh and Molefe about the danger of bringing Regiments on board as transaction advisors, because “Transnet treasury had the necessary capacity”.

She said there were several engagements between herself and Singh, with Molefe mediating. “I think that this transaction was going to happen, but he just needed me to cross over. Eventually, Molefe went ahead and approved the proposal.”

This was despite a memo Makgatho had drafted to the Transnet board to seek approval for funding initiatives subject to acceptable terms and conditions.

Makgatho, who in 2014 undertook a business trip as part of the Transnet delegation to engage the CDB, said upon her return to SA she was “shocked to find out that CDB was now communicating directly with Regiments and its director, Eric Wood, who was leading the negotiations”.

“This was in parallel to Transnet furthering negotiation with CDB,” she said.

Exhausted and feeling threatened, Makgatho said she decided to leave an environment she described as “not conducive”.

– brians@citizen.co.za

For more news your way, download The Citizen’s app for iOS and Android.