Gama BEE stake sold to pay fees

2011-02-01 13:03

Former Transnet Freight Rail (TFR) CEO and prominent ANC member Siyabonga Gama will lose part of a multi-million rand BEE deal tomorrow to settle about R1?million he owes Transnet in legal fees.

Gama’s Mafumbuka Investment Holdings was part of a 2007 BEE deal with ceramic tile giant Italtile worth R400 million.

Gama’s slice of the Italtile deal was worth more than ­R160?million when it was concluded in May 2007 and finalised a year later, according to Italtile’s statement of shareholders’ interest at the time. The 44-year-old has been an Italtile non-executive director since 2004.

Transnet wants to recover its legal costs from the application Gama launched in 2009 to have his suspension as TFR head lifted. Gama’s application was dismissed with costs.

Gama’s Lawyer Themba Langa would not comment on the matter, but a source close to the case said the legal costs were R6.5million, of which he had paid R5.5 million. The parastatal wants to recover the balance of about R1?million.

According to the Johannesburg Central Sheriff Office, the sale of his shares, held at share registry Computershare, will take place at its office in Crown Mines tomorrow.

Top law firm Bowman Gilfillan Attorneys represented the parastatal in the South Gauteng High Court case.

Costs awarded against Gama included those of 11 of the 13 respondents listed in the matter. Top advocates Jeremy Gauntlett SC, PJ Pretorius SC and Horace Shozi appeared for the respondents.

Besides Transnet, other respondents included then Public Enterprises Minister Barbara Hogan, acting chief executive Chris Wells, human resources group executive Pradeep Maharaj and members of Transnet’s previous board.

When he failed to pay up, Transnet won a court order to have Gama’s Italtile shares attached.

Gama is also appealing against his dismissal by a Transnet disciplinary hearing in June last year. The appeal, to take place at the Carlton Centre in Johannesburg, will also be heard tomorrow.

The charges against him related to improperly awarding an R800?million tender for “50 like-new locomotives” and procurement of security services from General Nyanda Security Risk Advisory Services, now Abalozi Security Risk Services. Abalozi is owned by the family of former communications minister Siphiwe Nyanda.

Transnet’s board had decided that Transnet Rail Engineering should carry out all engineering on the assembly and maintenance of the locomotives.

The Nyanda contract was just under R19 million but R55 million had been spent by the time of Gama’s suspension in September 2009. Gama was limited to awarding contracts of up to R10?million.

Transnet spokesperson Mboniso Sigonyela said it was not its policy to comment on the details of matters arising from the employer/employee relations.

“It would be inappropriate for us to comment on the matter relating to Mr Gama as it is currently on appeal,” Sigonyela said.

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