Gama told to refund R151m on his way out
• Transnet wants CEO to return alleged overpayments to Gupta-linked advisory firm Regiments
State-owned rail and freight company Transnet is not only moving to terminate its contract with controversial CEO Siyabonga Gama but is also demanding that he personally pay back R151m in alleged overpayments to Gupta-linked advisory firm Regiments.
Transnet has given Gama 10 days to tell the board why he should not be fired.
The company, which has a monopoly or near-monopoly over ports, freight rail and fuel pipelines in SA, has been mired in state capture allegations involving the Gupta family and friends of Jacob Zuma who are accused of using their connections to the former president and his family to divert state resources to their businesses.
Public enterprises minister Pravin Gordhan, whose cleanup of state-owned enterprises (SOEs) is the centrepiece of President Cyril Ramaphosa’s agenda, has said that state capture may have cost the country about R100bn. That is equivalent to almost half the amount the
state plans to spend on health in the 2018/2019 fiscal year.
Transnet’s board issued notices in August of its intention to suspend Gama and two other officials, after investigations by law firms Werksmans and MNS Attorneys, as well as the Treasury, into the purchase of R54bn of locomotives from General Electric, Bombardier Transport, China South Rail and China North Rail.
Thamsanqa Jiyane, chief officer of advanced manufacturing at Transnet Engineering, and Lindiwe Mdletshe, senior manager for strategic sourcing at Transnet Freight Rail, were suspended after a special board meeting earlier in September.
The board has since decided to change Gama’s suspension to a termination of his contract.
While he has previously indicated that he would fight a suspension, it is not clear what action he will take to try to stop his axing. Gama’s phone was off on Thursday and text messages went unanswered.
In a letter, seen by Business Day and whose contents were later confirmed by Transnet’s board, chair Popo Molefe told Gama, who was appointed permanent CEO in April 2016, that investigations show his conduct had been inconsistent with the corporate culture of the new board, his fiduciary obligations and Transnet’s policies.
He also said Gama had shown disregard, which at times had been reckless, for transparency and accountability.
Molefe in the letter said the information had resulted in a loss of trust and confidence by the board in Gama’s ability to manage Transnet.
“The board cannot be expected to retain you in your appointment. That would be contrary to the corporate culture and it would be breaching its responsibilities as chief accounting officer under the PFMA [Public Finance Management Act] to protect its interests and assets,” Molefe said.
Gama has been in the line of fire after investigations found that he, former CEO Brian Molefe and Gupta associates may have acted unlawfully in relation to the purchase of 1,064 locomotives.
Gama replaced Molefe after the latter was appointed to run electricity utility Eskom, which has also been at the centre of corruption allegations.
Leaked Gupta e-mails con- tain claims that the family received multibillion-rand kickbacks as part of the locomotive deal. The 2017 Gupta e-mails also show that Gama — two months before being appointed Transnet CEO — enjoyed a twonight stay at a five-star hotel in Dubai allegedly courtesy of the Guptas.
DRAFT ASSIGNMENTS
Gama confirmed meeting Gupta lieutenant Salim Essa during that stay but denied the Guptas paid for him.
He is also facing allegations that McKinsey helped draft his MBA assignments, at about the same time the consulting firm was awarded a contract at Transnet, together with Regiments.
Molefe said in his letter to Gama that the CEO had not co-operated with the investigations into the procurement of the locomotives and that when there was an attempt to obtain Jiyane’s computer and iPad, Gama had been obstructive and uncooperative.
Gama was also accused of showing contempt and disrespect towards the Transnet board and Molefe as chair.
Molefe said Gordhan was informed of the board’s decision on Thursday.