State capture report: Transnet political interference yet no findings against politicians

Part two of the highly anticipated Judicial Commission of Inquiry into State Capture painstakingly details how Transnet, the country’s railway, was fleeced and gambled at the hands of its executives.

The Commission has recommended Transnet CEOs Siyabonga Gama and Brian Molefe and former CFO Anoj Singh be criminally investigated for charges ranging from racketeering to fraud and corruption.

It also places Gupta point man Salim Essa at the helm of an elaborate racketeering syndicate that laundered money for several Gupta linked companies.

State Capture report: Transnet

Politicians interference delivered Transnet to the Guptas

In his testimony, businessman and former politician Popo Molefe said that State Capture had shown that boards, CEO’s and CFO’s were ‘appointed for ulterior purposes and not in the best interests of State-Owned Enterprises (SOE’s).

Once the ‘right people’ were controlling Transnet, procurement oversight systems, internal audit departments and company structures designed to mitigate abuse of resources were systemically dismantled.

Awarding of lucrative contracts were the prerogative of senior executives, who were ultimately appointed by the Minister of Public Enterprises.

“Politicians invariably will seek to influence the appointments of their allies that would materially benefit them,” reads the report.

No findings against politicians, despite meddling in Transnet

While Acting Deputy Chief Justice Raymond Zondo recommended further investigations and criminal prosecutions be pursued against Transnet’s senior executives, the report barely mentions any accountability aimed at those in power, who appointed the shady board members.

Then Public Enterprises Minister and friend of the Gupta’s Malusi Gigaba was instrumental in Molefe’s appointment as GCEO in February 2011.

The Transnet Board was supposed to send Gigaba a shortlist of three candidates, but the Board abdicated this responsibility and Gigaba chose his preferred candidate, despite another candidate (Dr Mandla Gantsho) scoring higher than Molefe.

At the time of Molefe’s appointment, the process to reinstate Gama as CEO of Transnet Freight Rail had begun, and on 1 April 2011, Gama returned to his post.

“Not only was Mr Gama reinstated, but his reinstatement operated with full retrospective effect without any loss of remuneration and benefits – totally some R13 million,” said the report.

Gama also applied for the GCEO position in 2009 under former Public Enterprises Minister Barbara Hogan.

Corruption allegations

Hogan was vehemently opposed to Gama’s application because of a 2008 investigation following corruption allegations in relation to security services from General Siphiwe Nyanda Security Advisory Services.

Hogan had stated that should Gama, – who had considerable political backing – be appointed as Transnet GCEO other senior management executives would leave their positions.

Her testimony revealed that Gama was never even shortlisted for the position, instead, the CEO appointment was delayed at the insistence of former President Jacob Zuma.

But Gama had the backing of two Cabinet Ministers at the time including Jeff Radebe and former Communications Minister, General Siphiwe Nyanda.

Incidentally, Zondo said Nyanda owned the company that was implicated in procurement irregularities which ultimately lead to Gama’s dismissal from TFR.

Mineral Resources and Energy Minister Gwede Mantashe also wanted Gama in the role of TFR CEO because it “was appropriate to promote black excellence”.

Appointment hiccups

Hogan’s first preference for Transnet CEO was Pravin Gordhan, who’d been appointed Finance Minister, and so second in line was Telkom CEO Sipho Maseko.

Maseko’s potential appointment was blocked at every turn in favour of Gama.

The report, therefore, found that Mantashe’s account was “implausible because Gama never competed against a white candidate.”

Immediately before and in the days following Gama’s 2009 suspension, Radebe, Nyanda, the ANC, SACP, SA Transport Workers Union and the ANCYL – under Julius Malema at the time – lobbied behind Gama and accused Transnet of persecuting him.

Gama was later appointed as Group Chief Executive Officer when Molefe was seconded to Eskom.

Molefe, Singh and Gama facilitated the conclusion of irregular contracts at inflated prices through deviations, improper confinements and the changed tender evaluation criteria in order to facilitate entry for companies involved in the extensive money laundering directed by Essa on behalf of the Gupta Empire.

Despite the role politicians played in the strategic appointment of these executives, none of them has been identified for criminal prosecution.

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