More revelations on Transnet at Zondo Commission

SABC News Deputy Chief Justice Zondo 1 1 1 - More revelations on Transnet at Zondo Commission

The State Capture inquiry has heard of more irregular payments by Transnet. MNS Attorneys’ Thobani Mnyandu and Dr Jonathan Bloem of Multi Purpose Business Solutions testified about fruitless and wasteful expenditure at the state owned enterprise.

Mnyandu concluded his testimony on the Transnet Durban Relocation project that cost Transnet over R1.2 billion.

Thobani Mnyandu of MNS Attorneys told the Zondo Commission that Transnet ignored pertinent issues raised by accounting firm PWC.

He said the accounting firm had advised Transnet executives to ask the original equipment manufacturers to justify their relocation costs.

Mnyandu testified that payments were improperly approved as they were not in accordance with Transnet’s standard processes.  As a result, internal auditors refused signing off on the relocation deal as they could not confirm the adherence to required processes.

Meanwhile Dr Jonathan Bloom from Multipurpose Business Solution testified that the R166 million success fee paid to Gupta-linked Regiments Capital was irregular.

He said Transnet did not allow the payment of success fees.

Bloem said a success fee was not included in the transaction advisory agreement which later increased by over 700%.

The agreement was originally valued at R35.2 million and increased to over R260 million after Transnet Group Treasurer Phetholo Ramasebudi submitted a memorandum motivating for a contract extension.

Transnet to stop all payments

Mnyandu says MNS Attorneys has recommended that Transnet stop all payments related to the relocation of China North Rail and Bombadier to limit the exposure already suffered by Transnet.

He says they also recommended that Transnet consult law enforcement agencies to look into the agreement between Business Expansion Structured Products and China South Rail as the agreement raised allegations of fraud and corruption.

Mnyandu says MNS Attorneys also found that former Transnet Acting Group CEO, Siyabonga Gama, breached Section 76/3 of the Companies Act when he approved the R1,2 billion relocation costs.

 

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