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External firm to probe Transnet corruption allegations

Jul 03 2017 19:07
Yolandi Groenewald

Johannesburg - Transnet group CEO Siyabonga Gama said the company has hired an external legal firm to probe allegations of corruption at the state-owned enterprise.

Gama said on Monday that Werksmans would be working with Transnet auditors and report back to the company's stakeholders once the investigation was complete.

The investigation will focus on the Gupta-linked Tequesta Group situated in Hong Kong, which allegedly raked in R5.5bn in kickbacks over three years, among other allegations.

Speaking at Transnet’s end-of-year results presentation, Gama said the probe would be in-depth and thorough.

“We’ve seen the allegations against Transnet,” he said. “They are serious and that is why we hired an external company to investigate.”

Investigators will be working with the non-executive committee, led by the chair of the audit committee, Gama explained.

At the beginning of the month amaBhungane Centre for Investigative Journalism reported that Tequesta scored billions of rand in alleged kickbacks to help a Chinese firm win lucrative Transnet tenders.

After scouring the #GuptaLeaks emails, amaBhungane found a contract that stipulated Tequesta would earn a 21% cut of every deal made by Hong Kong-based CSR, a subsidiary of China South Rail (CSR). That amounted to about R5.3bn since 2014, amaBhungane reported.

Gupta lieutenant Salim Essa was the sole director of Tequesta, also a Hong Kong company.

Gama said the investigation’s scope would include whether one of Transnet’s suppliers had a party agreement with Tequesta, and if Transnet followed its own procurement processes. Also included in the probe is whether Transnet was indeed overcharged, and concerns around financing.

The Transnet CEO said the probe has already extended to China.

“Transnet has already put questions to the Chinese business partners, who have refuted the allegations,” Gama said.

Last week advocate Geoff Budlender’s investigation into Trillian showed that Transnet paid just over R105m to Trillian between April and June 2016. Essa is also the majority shareholder in Trillian with a 60% stake.

What also came to light in the Trillian investigation were Transnet’s payments of over R60m to TCP, with what appears to be duplicate invoicing and invoices issued for work which Trillian apparently never carried out.

Last year Public Protector Thuli Madonsela said in her State of Capture report that she decided to investigate contracts awarded by Transnet to Regiments Capital and Trillian. Gama last year said Transnet had cut all ties with Trillian.

On Monday Gama said Transnet would not comment on any allegations until the firm’s work is done, which he expects will be in three months' time.

“Allow us the time to finish,” he said. “Transnet doesn’t tolerate corruption.”

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transnet  |  trillian  |  siyabonga gama  |  corruption


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