Former managers out on bail for allegedly defrauding Transnet almost R34m

The Johannesburg Specialised Commercial Crime Court has granted bail to two former Transnet managers, Lerato Makenete and Hawkins Madubane, on charges of fraud.

The former Transnet executive managers appeared in court on Tuesday along with two service providers, Jacob Malusi Ramoyadi and Kenneth Rikhotso, and their companies, Ramoyadi Air Conditioning and Electrical and Ndzalo 2 Trading.

They are accused of defrauding Transnet of nearly R34 million during the Covid pandemic. The charges include fraud, theft and money laundering.

Original vs Transnet price

According to NPA spokesperson Phindi Mjonondwane, Makenete and Madubane were responsible for Transnet’s group business continuity and disaster management and safety, respectively.

The state alleges that they conspired with Ramoyadi, Ramoyadi Air Conditioning, Rikhotso, and Ndzalo 2 Trading to supply over one million disposable breathalyser straws at an inflated price.

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The original price per straw was 29c, but Transnet was charged R29.99 per straw. This resulted in a total payment of R33.8 million.

Transnet identified the need for these straws through a task team formed during 2019 to 2020 to coordinate its response to Covid.

Employees of Transnet are breathalysed each shift before assuming their duties, such as train driving.

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“It had become apparent to the task team that the use of Alcoblow breathalysers posed a risk for the spread of the coronavirus due to the dispersion of droplets when a person blows into the machine,” said Mjonondwane.

“The use of plastic straws with the breathalysers was found to be effective in limiting the dispersion of droplets, leading to the decision that Transnet should procure these straws.”

Accused number 2, Madubane, as the head of safety, was responsible for the procurement of disposable breathalysers, specifically straws.

The companies charged with the accused were allegedly listed on the Central Suppliers Database. This despite them never having done business in the medical sector or being registered as suppliers of medical commodities.

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They were classified as construction, electricity, gas, air conditioning, accommodation and food service providers, according to the NPA.

Disciplinary hearings

Investigations led by Lieutenant-Colonel Annalize Jordan revealed that the accused allegedly failed to follow procurement procedures and did not disclose their associations with the procurement companies.

In October 2023, the Special Investigating Unit obtained an interdict preventing them from withdrawing their pension benefits from the Transnet Retirement Fund. Their combined pension funds amount to R8.9 million.

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The two were dismissed last year after being found guilty during Transnet’s disciplinary hearing in their absence.

Their case has been postponed to 4 September for the disclosure of the docket contents.

They were released on R10 000 bail each on the condition that they surrender their passports, reside at the cited address, and do not contact state witnesses.