Law firm probing R55bn Transnet deal was ‘handpicked to shield Gupta pals’

The appointment of the law firm that investigated impropriety at Transnet’s R54.5 billion procurement process of 1064 locomotives was irregular – and now its report on the matter has been cast in doubt.

Corporate law firm Werksmans Attorneys was not among the panel of law firms that was appointed following a procurement process – its appointment was recommended by former Transnet board member, Stanley Shane.

Shane’s role in the appointment has added to the doubt around the law firm’s report due to his link to the controversial Gupta family.

Transnet insiders told City Press that the law firm was handpicked to shield all Gupta-linked officials and board members, and target officials who spoke out against corruption.

Transnet’s previous board dismissed Werkmans’ report as being “incomplete” and therefore “inconclusive.”

The locomotives deal ballooned by about R16 billion, from R38.6 billion to R54.5 billion. Werkmans found that the transaction was “cloaked in corrupt and reckless activity”.

As of March 24 2017, according to the Werkman’s report, Transnet had paid out R23.9 billion of the total price.

A Transnet insider said: “Indeed, Shane motivated for the appointment of Werksmans and held a view that them not being on the Transnet list of suppliers, could bolster their independence.

"After receiving the Werksmans report, the previous board interrogated it and came to the conclusion that it was incomplete and, therefore, inconclusive.

"The board publicly announced that Werksmans also acceded to the fact that its report was incomplete, hence it recommended that more investigations be conducted.”

Shane’s hand in Werkman’s appointment has cast more doubt on its credibility because he has a relationship with one of the law firm’s partners, Harold Jacobs. Both men have denied having a relationship, but evidence before City Press proves otherwise.

City Press has seen two invoices showing that Shane’s company, Integrated Capital Management, used Jacob’s legal services in a private matter with Transnet over his past relationship with Trillian Capital (Pty) Ltd in 2016.

Shane has admitted that he played a role in Werkman’s appointment but denied any relationship with Jacobs.

“I confirm that I had no involvement in the appointment of Harold Jacobs of Werksmans save that I now recall that I told a member of the board in general discussion that Harold Jacobs of Werksmans [one of the big five legal firms] would be a suitable appointment,” he said.

Shane said that he was unaware whether Werkmans’ appointment was irregular because appointments were effected by the legal department and not the board.

“I, accordingly, accept no responsibility,” he said.

Jacobs did not respond to questions, but Werksmans’ head of the dispute resolution department, Corlett Manaka, responded instead.

“Werksmans was appointed by the board of Transnet pursuant to a resolution taken by the said board … There was no conflict of interest when Werksmans was appointed to investigate matters at Transnet and the appointment was not irregular,” Manaka said.

Transnet spokesperson Molatwane Likhethe said the state-owned entity was not aware of any relationship between Shane and Jacobs.

“Please refer your queries to the two parties regarding this matter. Both during and after their appointment, Werksmans Attorneys did not declare any affiliation between Mr Shane and Mr Jacobs,” he said.


All your favourite publications in one place.
Read now
Voting Booth
Do you think the ANC Gauteng integrity commission overreached in recommending that Gauteng Health MEC Bandile Masuku should step down?
Please select an option Oops! Something went wrong, please try again later.
Yes, he had a good case
13% - 6 votes
No, they’re taking on corruption
41% - 19 votes
Same old story
46% - 21 votes