Transnet is poised to institute civil proceedings against key players involved in the controversial 1 064 locomotives tender to recoup the more than R15 billion it lost in the deal.
City Press has learnt from highly placed sources close to the state-owned logistics company that it is now preparing to sue its former chief executive Brian Molefe and its former chief financial officer Anoj Singh for their roles in hiking the cost of the tender from R38.6 billion to R54.5 billion.
Transnet’s board is also going after Gupta lieutenant Salim Essa and his erstwhile company Trillian Capital Partners.
Transnet will also launch a civil suit against China South Rail, the Gupta-linked manufacturer that received the lion’s share of the tender to build electric locomotives, as well as a locomotive maintenance contract worth hundreds of millions of rands.
Transnet’s move to institute civil proceedings to recoup the losses follows action taken this week against the entity’s embattled group chief executive, Siyabonga Gama.
Gama was told he would need to repay R151 million, the amount Transnet overpaid Gupta-linked financial services firm Regiments Capital.
City Press was also told that civil suits would additionally be launched against Transnet’s former procurement head and suspended chief executive of Transnet Engineering Thamsanqa Jiyane, and senior supply chain manager Lindiwe Mdletshe.
One highly placed source close to the board said that if Brian Molefe, Singh, Essa and the other individuals and companies “do not comply” with the letters of demand, “a civil claim will be launched against them”.
“That process is already at an advanced stage. In fact, they were supposed to have received the letters of demand this week,” the source said.
Another source said the specific amounts to be claimed against each individual and company were being “evaluated”.
However, Transnet board chairperson Popo Molefe denied that civil action had been launched against those the company blames for its billions of rands in losses.
“It is not true. No letters of demand were issued to the individuals,” he said yesterday.
Brian Molefe yesterday said he was “not aware” of any move to sue him.
Singh said: “My comment is no comment.”
Essa could not be reached for comment, and Gama was unavailable for comment.
Jiyane’s lawyer, Nicqui Galaktiou, said she was “unaware of the developments in which you allege that he will soon receive a letter of demand from Transnet seeking to recoup allegedly misappropriated funds in the 1 064 locomotive transaction”.
“Once again you appear to have received confidential information prior to Jiyane having any information ... Transnet has failed to serve a charge sheet affording Jiyane an opportunity to respond. Should Transnet serve the letter of demand, as alleged, Mr Jiyane will definitely defend such demand and denies any liability,” she said.
The Special Investigating Unit (SIU) is also probing the locomotive tender after President Cyril Ramaphosa issued a proclamation for it to probe “serious maladministration, improper and unlawful conduct, unlawful expropriation of public money, intentional and negligent loss of public money and the unlawful, irregular and unapproved acquisitions and transactions” at Transnet and Eskom.
Sources told City Press this week that SIU investigators were working with Mncedisi Ndlovu & Sedumedi Attorneys (MNS) on the impending civil matters. MNS chairperson Mncedisi Ndlovu declined to comment.
SIU head of communications Nazreen Pandor confirmed yesterday that the unit was “aware of the issues” and would be “launching our own civil action in due course”.
The move to recoup the losses from Transnet’s former bosses and the companies involved are in line with recommendations in MNS’s draft report on the locomotive tender.
That report, dated June, recommends that “Transnet should recoup monies lost due to [the] conduct” of Brian Molefe and Singh for their part in hiking the estimated total cost of the tender.
Brian Molefe, the report recommended, should also be pursued civilly for being “part of the decision to split the award to more than one bidder ... [which] cost Transnet a minimum of R2.7 billion”, as well as concluding “transaction agreements prior to obtaining approval from the board”.
Now Transnet will also pursue Trillian, which was paid R93 million without a tender in place to arrange the multibillion-rand loan the company needed to buy the locomotives.
Gama was the first to receive a demand that he repay R151 million.
In the letter sent to Gama on Thursday by Transnet’s board, which informed him that he had 10 days to state why he should not be summarily dismissed, Popo Molefe wrote: “Transnet is demanding from you the repayment of a R151 million overpayment made by Transnet to Regiments Capital during March 2015 and solicited and/or recommended and/or procured and/or approved by you in April and July 2015.”
Regiments was also tasked with raising funds to acquire the locomotives.
In an about-turn on the board’s earlier stance that Gama should be subjected to a disciplinary process, Popo Molefe added in the letter that “the board cannot be expected to retain you in your appointment. That would be contrary to its corporate culture and it would be breaching its responsibilities as chief accounting officer under the Public Finance Management Act [PFMA] to protect its interests and assets”.
Popo Molefe also accused Gama of tender irregularities and having caused Transnet to lose billions of rands during the acquisition process.
The MNS draft report also recommends that Transnet lay criminal charges against Brian Molefe and Essa for contravening the Prevention and Combatting of Corrupt Activities Act, and against Singh for contravening the PFMA.
Those charges are currently being investigated by the Hawks.