Former Transnet exec Herbert Msagala released on bail over R160m dodgy contracts

Former Transnet Group Capital (TGC) Chief Executive Officer Herbert Msagala has been released on R60 000 bail following his first appearance on charges of fraud, corruption, theft and money laundering

Msagala appeared in the Johannesburg Specialised Commercial Crime Court on Monday.

Kickbacks

National Prosecuting Authority (NPA) spokesperson Phindi Mjonondwane said Msagala is accused of receiving kickbacks worth over R26 million during his tenure.

“The case stems from investigations conducted by the Special Investigating Unit (SIU) into irregularities of five contracts worth over R160 million, that were awarded to IGS Consulting Engineering firm by TGC between May to  August 2015 for the maintenance and upgrading of the high pressured pipe infrastructure that transported different fuel products from Durban to Gauteng under its project called New Multi Product Pipeline (NMPP). 

“The state alleges that Msagala unduly benefited from IGS kickbacks worth over R26 million that he allegedly used to purchase various properties and vehicles,” Mjonondwane said.

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Other accused

Mjonondwane said Msagala is charged together with two individuals and the entity, IGS.

“The individuals are yet to appear in court as the Directorate for Priority Crime Investigation (DPCI) is still tracing their whereabouts.”

Mjonondwane said the matter was postponed to November 19, for DPCI to trace the outstanding suspects.  

Fired

Msagala was axed in August 2020, following an SIU-led lifestyle audit which revealed he was living excessively beyond his remuneration at Transnet and that the source of his additional income was IGS and its sole shareholder and director Sipho Sithole.

This resulted in him being charged with various acts of misconduct. In November 2020, the Special Tribunal declared several assets belonging to Msagala – including four houses in Gauteng and the Free State, two farms and a fleet of 35 vehicles – forfeited to the state.

Msagala at the time was ordered to pay back the millions of rands he was found to have scored from the local engineering consultancy he channelled various dodgy contracts to while working for the parastatal.

ALSO READ: Special Tribunal orders former Transnet bigwig to pay back R26,4 million