Ex-Transnet board member fails to prove Gordhan was racist to dismiss him

An application by former Transnet director Seth Radebe to set aside Public Enterprises Minister Pravin Gordhan's decision to remove him from the Transnet board was dismissed in the North Gauteng High Court on Tuesday.

Radebe accused Gordhan of being racist when he decided to remove Radebe in May this year. At that time Radebe was one of the last three directors on the previous Transnet board.

In May, Gordhan announced the appointment of several additional directors to the Transnet board, in a bid to strengthen governance and stem financial losses by the key state-owned enterprise.

Judge Hans J. Fabricius described Radebe's application as “rather vague”. In the view of the judge, Gordhan took the relevant facts into account and made a rational decision, keeping in mind the precarious position of the SA economy and the important role Transnet has to play.

Radebe told Fin24 on Tuesday evening that he is very disappointed that the court could not see the case from his perspective.

"I was not fighting for my position, but for my dignity. I am looking at my options now and it might include further legal measures," said Radebe.

Lack of decisive action

In the judgment reference is made to a lack of decisive actions by the previous board against Transnet employees implicated in corruption, specifically in the tender for 1 064 locomotives.

The judge accepted arguments on behalf of Radebe that investigation reports by Werksmans Attorneys and Prof. H. E. Wainer were “incomplete” but found this “did not mean that they were inconclusive and could not be acted upon”.

"Objectively speaking, there was sufficient evidence emanating from these reports to compile a charge sheet. There was also no good reason not to suspend certain individuals as a precautionary measure,” Fabricius ruled.

The Ministry of Public Enterprises said in a statement in reaction to the rejection of Radebe's application that it particularly welcomed the emphasis the judge placed on the need to urgently restore good corporate governance at state-owned enterprises like Transnet, given their role in the SA economy.

The judge found that there was no basis for calling in question Gordhan’s character, as had been done in the application proceedings. Gordhan's academic qualifications, competence and the understanding of his constitutional duties were questioned.

Board 'failed Transnet'

Radebe’s arguments that he is entitled to a board position by virtue of his academic qualification as a chartered accountant were rejected. The judge found that, as chair of Transnet's audit committee, not only did Radebe fail to take remedial steps, but had not exhibited the qualities needed to instill trust that he could carry out his functions.

The judge accepted Gordhan’s argument that the previous board failed Transnet, in that it took no decision to set aside irregular contracts, or at the very least, to halt further payments being made to four entities still in the process of executing their contracts for the procurement of the 1 064 locomotives.

Transnet paid R509m more for 100 locomotives after switching a supply contract to a Chinese rail company from Mitsui & Co of Japan, according to a report commissioned by the National Treasury.

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