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State capture inquiry to probe allegations of Transnet kickbacks to Guptas

May 06 2019 11:16
Sibongile Khumalo
Atul Gupta at the launch of ANN7 news channel on A

Atul Gupta at the launch of ANN7 news channel on August 21, 2013, in Johannesburg, South Africa. (Photo by Gallo Images / Sunday Times / James Oatway)

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The judicial commission of inquiry into state capture will turn its attention to investigating wrongdoing at state-owned freight rail company Transnet from Monday, including allegations of kickbacks to members of the Gupta family. 

Advocate Paul Pretorius, one of the commission's evidence leaders, said on Monday morning that allegations of payments to front companies, under the guise of promoting BEE, would be investigated in coming days and weeks. 

He said allegations that Transnet has been "abused and its structures weakened" in order to facilitate the export of vast sums of money offshore "to parties who certainly should not have enjoyed that benefit" would be scrutinised. 

Governance and structural reforms at the freight rail company would also be considered. 

The Gupta family has previously denied any wrongdoing. 

Molefe to take the stand

Transnet board chairperson Popo Molefe is set to be one of the first witnesses to testify, but it is still unclear when he will appear. His spokesperson said on Monday he was not at the commission. 

Since his appointment in May 2018, Molefe and the group's new board have been working to clean up the key state-owned enterprise. In December 2018, Molefe told Fin24 that “the tentacles of state capture and the claws of corruption run deep” adding it was hard to say when the rot would be eradicated.

A number of senior executives at Transnet have been linked to graft claims, including former CEO Siyabonga Gama, who was fired in October, after being suspended over what the board described as a "serious violations" of his duties, as well as a loss of "trust and confidence" in him.

A forensic report into allegations of tender irregularities into the procurement of 1 064 locomotives by the state-owned logistics company recommended that criminal investigations be instituted against former executives Brian Molefe, Gama, Anoj Singh and others for "possible receipt of gratification".

It revealed that that the company paid R509m more for 100 locomotives after switching a supply contract to a Chinese rail company from Mitsui & Co of Japan.

In January, Molefe said Chinese rail supplier CRRC E-Loco had agreed to return R700m it was paid as part of a locomotive maintenance deal in 2016. The locomotives deal is one of the questionable major contracts that have occupied the new Transnet board since its appointment.

Several executives have also been suspended and face disciplinary action for various misconduct charges as part of a clean-up campaign.

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