Transnet is, for the first time, taking legal action against its former chief executive Brian Molefe.
In summons issued to Molefe, former Transnet chief financial officer Anoj Singh, and Regiments Capital, the state-owned company wants them all to cough up R79.23 million – plus interest – which it said was overpaid to Regiments, thanks to “collusion” with the company’s former bosses.
The summons was served on the three on Tuesday, and the case has been filed at the High Court in Johannesburg.
However, in an SMS response to City Press, Molefe said Transnet’s case against him was “frivolous”.
“I think it is frivolous and was put together in great haste. I must still consider if we are going to respond at all,” Molefe said late Wednesday afternoon.
However, a source close to the Transnet board said: “The board is very serious about pushing these legal challenges all the way.”
Singh confirmed the papers were served on him, but said he was unable to comment further.
Regiments Capital president Litha Nyhonyha did not respond to a voice message or WhatsApp messages seeking comment sent on Tuesday afternoon, although those messages had been read.
This is one of four sets of summons filed in the past week against various former and suspended Transnet officials, and companies involved in the 1064 locomotives tender that saw Gupta-linked companies and individuals score more than R5 billion in kickbacks.
The claim against Molefe, Singh and Regiments that Transnet has lodged stems from the overpayment of R79.23 million which Regiments received, allegedly unlawfully, for financial advisory services provided during the execution of the controversial tender.
Less than two months after global advisory firm McKinsey ceded its R35.2 million contract to advise on the deal to Regiments, Regiments then submitted an invoice to Transnet for R79.23 million.
About two weeks after that, Singh recommended that Molefe approve the payment for a number of allegedly spurious reasons, including that Regiments had helped Transnet save almost R20 billion by reducing the costs of the transaction from R68 billion to R50 billion, as well as other savings.
However the court papers state Regiments had made no such claim.
Molefe then approved Singh’s memorandum and Regiments was paid less than three months after it took over the contract.
However, in court papers, Transnet says Regiments did not save the company R20 billion and that their advice in fact increased the costs.
“There was no saving of R20 billion in the costs [of] the 1064 procurement and/or the funding of those costs, resulting from the accelerated delivery of locomotives and/or the provision of advisory services related to foreign exchange and/or warranty and/or guarantee bonds,” the summons states.
The papers further state that Regiments had agreed to provide transaction advisory services at a fixed fee of R50.2 million, and Transnet had already paid out most of that sum.
“Singh and/or Molefe had colluded with Regiments to approve payment of the invoice,” according to the papers.
“Molefe and Singh breached their contractual … duties… They failed to act in good faith, act for a proper purpose, procure lawfully, safeguard Transnet’s assets, and/or act in the best interests of Transnet,” the papers state.