More suspensions looming at Transnet - Molefe

Transnet board chairperson Popo Molefe has warned that a "long list" of employees could be suspended or find themselves facing criminal charges, with the possibility of recouping funds looted from the firm.

"We are certainly going after more people," said Molefe, after a meeting with Parliament’s standing committee on public accounts (Scopa).

This week, three Transnet executives, including CEO Siyabonga Gama, were served with suspension notices following investigations that revealed possible misconduct.

"That was just a beginning - the list is long. Some people have left the company, but we will be pursuing them and possibly lay charges if it is found that there was criminal intent," said Molefe.

Molefe said the Scopa hearing provided some "scary revelations the board was not aware of", including 
what he called "flagrant disregard by management for their responsibility to the company".

"There is also a level of intimidation of the staff. It is very scary.

"That kind of environment allows for rampant corruption and pilfering," he added.

Qualified accounts

The Scopa hearing - meant to determine the depth of financial mismanagement at the company - detailed cases of high level financial mismanagement, disregard for procurement process and questionable deviation from the tender processes used to loot the organisation.

The hearing comes as Transnet is due to release its financial its financial statements on Monday, which will show that it obtained a qualified audit. 

The results also reveal that irregular and wasteful expenditure increased from R600m in 2016/17 to over R8.1bn in 2017/18.

The notices of suspension for Gama; Thamsanqa Jiyane, who is Chief Advanced Manufacturing Officer; and Supply Chain Manager Lindiwe Mdetshe, came followed the release of reports by Werkmans Attorneys and MNS Attorneys, which probed issues of financial misconduct at Transnet.

The misconduct relates to contraventions in terms of procurement, as well as the Constitution and other legislation including the Companies Act and the Public Finance Management Act (PFMA).

The executives have been given up to Monday to justify why they shouldn’t be suspended.

Gama was present at the Scopa hearing.

'Acting like syndicates'

During the meeting, Molefe complained that the new board was not getting the cooperation it needed from the management of Transnet when it came to rooting out corruption and mismanagement.

"We are not getting the cooperation of management; they are deliberately acting like syndicates. They seem to have sworn each other to secrecy," he said, vowing that the board would get to the bottom of any financial mismanagement.

Scopa Chairperson Themba Godi said qualified accounts present significant implications, as the company has large debts.

"It is a breach of conditions to their lenders," he said.

"It also presents a risk of a default, and when that happens, they will mostly likely seek a bailout, which is money that we do not have as a country," he said.

Board member Dimakatso Matshoga told the meeting that the board had met with creditors to assure them that the company would be able to meet its loan obligations.

Scopa members were also not satisfied with the decision by the state-owned entity to relocate its offices from the iconic Carlton Centre in downtown Johannesburg to new rented premises north of the city.

The company said the move was meant to curb maintenance costs for the 50-storey building, which will undergo renovations for an estimated period of three years.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders