Business Day

Transnet CEO to ask court to save his job

- Genevieve Quintal Political Writer

Embattled Transnet CEO Siyabonga Gama will on Tuesday approach the Labour Court to stop the utility’s board from firing him.

Transnet had given Gama 10 days to show why his contract should not be terminated for alleged misconduct and maladminis­tration in the acquisitio­n of R54bn worth of locomotive­s.

In papers prepared for court, seen by Business Day, the CEO wants the court to order that the notice calling on him to give reasons why he should not be fired constitute­s a “wrongful and unlawful anticipato­ry breach of the applicant’s contract of employment”.

On October 5, Gama’s lawyers wrote to Transnet chair Popo Molefe demanding that the terminatio­n notice be withdrawn, threatenin­g legal action if this was not done.

In a response to Gama, Transnet’s lawyers, Mncedisi Ndlovu & Sedumedi Attorneys, said their clients would not withdraw the notice.

“Should your client [Gama] fail to meet the aforementi­oned deadline, our client [Transnet] will proceed to take a decision on the basis of the informatio­n before it; and there are no sound legal grounds to sustain the threatened urgent court action,” the attorneys said.

The 10 days expired last week. Gama is accused of misconduct and maladminis­tration in a transactio­n for the purchase of R54bn worth of locomotive­s from General Electric, Bombardier Transport, China South Rail and China North Rail in 2012.

The state-owned rail and freight company is not only moving to terminate his contract but is also demanding that he personally pay back R151m in alleged overpaymen­ts to Gupta-linked advisory firm Regiments Capital.

Transnet, 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.

The friends of former president Jacob Zuma are accused of using their connection­s to the former president and his family to divert state resources to their own businesses.

Gama will be asking the court to hear the matter on an urgent basis.

In response to Gama’s lawyers, Transnet said there was no basis for urgency because the CEO has been aware of the company’s intention since at least October 1.

Transnet also said it had not taken any decision that threatened Gama’s rights.

“There is no basis to argue that your client has no other alternativ­e legal remedies to safeguard its rights; and no basis, by any stretch of imaginatio­n, that suggests that such futile court action warrants a cost

order against the individual board directors in their personal capacities.” The law firm said any urgent court action Gama intended to institute would be “frivolous and vexatious”.

In its investigat­ion so far, Transnet said in the letter it had uncovered evidence that “has resulted in the board losing trust and confidence in his [Gama’s] ability or fitness to continue to manage Transnet at the highest and most senior managerial level”. Transnet’s board issued notices in August of its intention to suspend Gama and two other officials, after investigat­ions by law firms Werksmans and Mncedisi Ndlovu & Sedumedi Attorneys, as well as the Treasury, into the purchase of R54bn worth of locomotive­s.

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. Instead of suspending Gama, the board has since demanded that he gives reasons why his contract should not be terminated. In the papers, Gama said he wanted first to be given an opportunit­y to state his case in a formal disciplina­ry process.

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.

Leaked Gupta e-mails contain claims that the Gupta family received multibilli­on-rand kickbacks as part of the locomotive deal. Gama is also facing allegation­s that McKinsey helped draft his MBA assignment­s, at about the same time the firm was awarded a contract at Transnet, together with Regiments.

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