Transnet boss tries to gag City Press as five-year-old case comes back to haunt him, write Su­san Com­rie and Abram Mashego

CityPress - - Front Page - SU­SAN COM­RIE and ABRAM MASHEGO in­ves­ti­ga­tions@city­

Thurs­day 9.43am

‘The mat­ter is still un­der con­sid­er­a­tion,’ NPA spokesper­son Lu­vuyo Mfaku said in an email to City Press. Then he said...

Satur­day 12pm

‘At this stage there is no ev­i­dence to link Gama to any acts of crim­i­nal­ity. There is no ba­sis for the re­view.’ Then he said...

Satur­day 1.13pm

‘The NPA is con­sid­er­ing the mat­ter. How­ever, it is highly un­likely that any per­son would be pros­e­cuted.’

The Na­tional Pros­e­cut­ing Au­thor­ity (NPA) has done a se­ries of dra­matic about-turns in a case in­volv­ing act­ing Transnet CEO Siyabonga Gama.

On Thurs­day, its spokesper­son, Lu­vuyo Mfaku, told City Press that the NPA’s de­ci­sion not to pros­e­cute those in­ves­ti­gated in a case con­cern­ing a R95 mil­lion ten­der awarded by Transnet to Gen­eral Nyanda Se­cu­rity (GNS) in 2007 “is still un­der con­sid­er­a­tion”.

But dur­ing an ur­gent court ap­pli­ca­tion in the South Gaut­eng High Court yesterday, Gama’s lawyers pro­duced a let­ter from Mfaku, dated Au­gust 15, stat­ing: “We con­firm that at this stage there is no ev­i­dence that links Mr Siyabonga Gama to any acts of crim­i­nal­ity. There is no ba­sis for the re­view of the mat­ter.”

Gama’s lawyers then asked Judge Colin Lamont to in­ter­dict City Press from pub­lish­ing any story that would claim Gama was un­der in­ves­ti­ga­tion.

They asked Judge Lamont to or­der City Press to “cease and de­sist from pub­lish­ing in its news­pa­per an ar­ti­cle re­gard­ing the al­leged in­ves­ti­ga­tion and re­in­state­ment of crim­i­nal charges against me”.

Lamont re­fused to grant the in­ter­dict, and al­lowed City Press to pub­lish the ar­ti­cle af­ter a few mi­nor changes were ne­go­ti­ated with Gama’s lawyers.

How­ever, while the in­ter­dict ap­pli­ca­tion was un­der way, Mfaku sent an SMS to City Press re­porter Abram Mashego at 1.13pm that once again cast doubt on the NPA’s re­solve to drop the mat­ter en­tirely: “The NPA is con­sid­er­ing the mat­ter. How­ever, it is highly un­likely that any per­son would be pros­e­cuted on the ba­sis of the in­for­ma­tion at our dis­posal.”

Gama was fired from Transnet in 2010 for his role in award­ing the ten­der to the com­pany of which for­mer com­mu­ni­ca­tions min­is­ter Siphiwe Nyanda was a di­rec­tor.

In 2007, Transnet put out a ten­der for se­cu­rity com­pa­nies to tackle ca­ble theft. Eleven com­pa­nies put in bids, but GNS was not among them. Later that year, Transnet un­ex­pect­edly can­celled the ten­der and, a month later, awarded it to GNS with­out it go­ing through an open ten­der process. Ini­tially val­ued at R18.9 mil­lion, by 2010 the ten­der’s value had bal­looned to R95 mil­lion fol­low­ing var­i­ous ex­ten­sions to the con­tract.

Shortly af­ter Gama’s dis­missal, Transnet’s foren­sic man­ager, Karthi Naicker, laid a com­plaint with the po­lice and asked them to in­ves­ti­gate var­i­ous Transnet em­ploy­ees, in­clud­ing Gama, who were im­pli­cated in the ten­der.

Although Gama was re­in­stated at Transnet in 2011, doc­u­ments in City Press’ pos­ses­sion – which only re­cently came to light – in­di­cate that the po­lice and the Hawks con­tin­ued to vig­or­ously pur­sue the case for the next three years.

How­ever, af­ter the case was handed over to the NPA, the in­ves­ti­ga­tion went quiet. Last year, the NPA in­formed Transnet that it was de­clin­ing to pros­e­cute the case be­cause one of the main sus­pects had died, say­ing: “At this stage, [there are] no rea­son­able prospects of a suc­cess­ful pros­e­cu­tion.”

When City Press ap­proached Gama for com­ment, his lawyer, Themba Langa, ac­cused City Press of fab­ri­cat­ing ev­i­dence and “des­per­ately try­ing to de­fame the rep­u­ta­tion of Mr Gama”. In an af­fi­davit filed on Fri­day night, Gama said: “Ac­cord­ing to the NDPP [Na­tional Di­rec­tor of Public Pros­e­cu­tions Shaun Abra­hams], as told to my at­tor­ney [Themba Langa] ... the mat­ter is not even at the desk of the NDPP, nor is there any ev­i­dence that war­rants the mat­ter to be re­con­sid­ered by the NDPP, or to have the mat­ter re­vis­ited, let alone to have it re­viewed.”

Gama, who brought the ap­pli­ca­tion in his per­sonal ca­pac­ity, also said: “Pur­suant to the dis­cus­sion with the NDPP, my at­tor­neys in­formed [City Press] to de­sist from pub­lish­ing the ar­ti­cle as it would amount to the pub­li­ca­tion of false­hood, fab­ri­ca­tion and un­law­ful defama­tion of my good name and rep­u­ta­tion.” In her re­spond­ing af­fi­davit, City Press editor in chief Ferial Haf­fa­jee said: “Transnet Ltd is an or­gan of state and a ma­jor public en­tity ... The good gov­er­nance of Transnet is there­fore of na­tional im­por­tance. The public has an in­ter­est in the ac­count­abil­ity of per­sons in lead­er­ship po­si­tions of public en­ti­ties.”

She added that re­cent events in­volv­ing the abuse of public money – of which the R246 mil­lion spent on Pres­i­dent Ja­cob Zuma’s home in Nkandla was an ex­am­ple – “have demon­strated the public im­por­tance of strictly scru­ti­n­is­ing the use of state re­sources”.

“These are the pri­mary rea­sons for my belief that a pub­li­ca­tion of this na­ture is in the public in­ter­est and of public im­por­tance,” she said. – Ad­di­tional re­port­ing by Zinhle Mapumulo

In less than three days, the Na­tional Pros­e­cut­ing Au­thor­ity (NPA) has done a se­ries of about-turns in a con­tro­ver­sial case that con­cerns Transnet’s act­ing CEO, Siyabonga Gama.

On Thurs­day, NPA spokesper­son Lu­vuyo Mfaku con­firmed to City Press that the NPA was re­con­sid­er­ing the de­ci­sion not to pros­e­cute Gama for his role in award­ing a ques­tion­able R95 mil­lion se­cu­rity ten­der.

But yesterday, dur­ing an ur­gent ap­pli­ca­tion to in­ter­dict City Press, Gama’s lawyers pro­duced a let­ter from Mfaku say­ing: “We con­firm that at this stage there is no ev­i­dence that links Mr Siyabonga Gama to any acts of crim­i­nal­ity. There is no ba­sis for the re­view of the mat­ter.”

The in­ves­ti­ga­tion dates back to 2010, when Gama was dis­missed from Transnet. He was re­in­stated a year later. Now, as he is poised to fi­nally seize Transnet’s top job, the case that once threat­ened to de­rail his ca­reer has come back to haunt him.

Mean­while, the Public Pro­tec­tor’s of­fice has launched its own in­ves­ti­ga­tion into “un­law­ful con­duct” at Transnet, in­clud­ing al­le­ga­tions of “cor­rup­tion, abuse of power, [and] vic­tim­i­sa­tion of em­ploy­ees”.

The NPA ini­tially de­clined to pros­e­cute the case last year, say­ing there were “no rea­son­able prospects of a suc­cess­ful pros­e­cu­tion” be­cause the main sus­pect in the case, a for­mer Transnet em­ployee, Din­gaan Se­namela, had died.

Af­ter City Press ap­proached Gama for com­ment, Gama’s lawyer, Themba Langa, claimed City Press was “des­per­ately try­ing to de­fame the rep­u­ta­tion of Mr Gama”, ac­cus­ing the jour­nal­ists in­volved of “telling lies”.

The ten­der at the cen­tre of the in­ves­ti­ga­tion was awarded to a com­pany once owned by for­mer com­mu­ni­ca­tions min­is­ter and chief of the SA Na­tional De­fence Force Siphiwe Nyanda.

In 2010, Transnet’s foren­sic man­ager, Karthi Naicker, laid a com­plaint at the Johannesburg Cen­tral Po­lice Sta­tion ask­ing for a cor­rup­tion in­ves­ti­ga­tion of var­i­ous Transnet em­ploy­ees.

The al­le­ga­tions date back to 2007 when Gama, as CEO of Transnet Freight Rail, signed off on an R18.9 mil­lion ten­der to fight ca­ble theft that was awarded to a lit­tle-known se­cu­rity com­pany, Gen­eral Nyanda Se­cu­rity (GNS), of which Nyanda was a di­rec­tor. By 2010, with ad­di­tional con­tracts and ex­ten­sions, the ini­tial R18.9 mil­lion con­tract had bal­looned to R95 mil­lion.

Although Gama was never im­pli­cated in cor­rup­tion and only ac­cused of sign­ing off on the ten­der in con­tra­ven­tion of the Public Fi­nance and Man­age­ment Act (PFMA), he was one of sev­eral Transnet em­ploy­ees dis­missed in 2010.

But fol­low­ing another Transnet in­ves­ti­ga­tion, the board de­cided to re­in­state Gama, say­ing: “The sanc­tion of a dis­missal was too harsh and there­fore the board con­sid­ered a fi­nal writ­ten warn­ing to be more ap­pro­pri­ate.”

But since then, a par­al­lel process has been run­ning – Gama has been re-es­tab­lish­ing him­self as the heir ap­par­ent to Brian Molefe, who was Transnet CEO un­til be­ing ap­pointed act­ing CEO of Eskom. The po­lice have also con­tin­ued their in­ves­ti­ga­tion and Transnet has been pur­su­ing a civil claim against Gen­eral Nyanda Se­cu­rity to try to re­claim part of the R95 mil­lion the com­pany was paid.

In­side the case

The in­ves­ti­gat­ing of­fi­cer’s di­ary, a copy of which City Press has seen, shows that be­tween 2010 and 2013, the crim­i­nal case was given al­most weekly at­ten­tion by mem­bers of the Hawks’ anti-cor­rup­tion task team, the as­set for­fei­ture unit and the Spe­cial In­ves­ti­gat­ing Unit brought in to as­sist.

The charges in­ves­ti­gated in­cluded fraud, cor­rup­tion, money laun­der­ing and con­tra­ven­tions of the PFMA.

By the time the case was handed over to the NPA for a de­ci­sion, wit­ness state­ments “in ex­cess of 45” had been ob­tained, and bank state­ments had been “an­a­lysed by ex­perts and sus­pi­cious trans­ac­tions found”, in­clud­ing a R200 000 pay­ment made by a com­pany be­long­ing to one of the GNS di­rec­tors to Langa At­tor­neys, Gama’s lawyer’s firm.

A sum­mary of the po­lice’s case says the in­ves­ti­gat­ing of­fi­cer be­lieved this pay­ment “was to cover le­gal costs for Transnet CEO Mr S Gama”, and may con­sti­tute “cor­rup­tion”.

When Langa was asked for com­ment, he threat­ened to sue the jour­nal­ist, City Press and News24 if the al­le­ga­tion was printed.

It ap­pears that af­ter the case was handed over to the NPA in Fe­bru­ary 2013, ev­ery­thing went quiet.

The next en­try in the in­ves­ti­ga­tion di­ary comes more than a year later, on March 10 2014: “De­cline to pros­e­cute any of the sus­pects men­tioned in the docket. There is, at this stage, no rea­son­able prospect of a suc­cess­ful pros­e­cu­tion as a re­sult of the pass­ing away of [Transnet’s for­mer man­ager of se­cu­rity] Mr Din­gaan Se­namela, who was at all ma­te­rial times the main sus­pect around whom the whole case re­volved ... [signed] Ad­vo­cate G Nkoana [deputy di­rec­tor of public pros­e­cu­tions].”

Transnet’s se­cret set­tle­ment

Shortly af­ter the NPA de­clined to pros­e­cute, Transnet an­nounced it was drop­ping its civil claim against GNS.

In Au­gust last year they an­nounced they were with­draw­ing all the cases against the se­cu­rity com­pany, say­ing: “Transnet found no ev­i­dence of wrong­do­ing by [Gen­eral Nyanda Se­cu­rity] and its founder Gen­eral Siphiwe Nyanda (re­tired). Transnet re­grets any harm that may have been caused by the han­dling of the mat­ter.”

Although the set­tle­ment de­tails re­mained se­cret, Transnet said both com­pa­nies agreed to with­draw all claims and cases against each other. When City Press ap­proached Transnet for com­ment in June, its spokesper­son, Mbon­iso Sigonyela, said: “As far as Transnet is con­cerned, the mat­ter be­tween the com­pany and GNS is closed.

“In 2011, when the Transnet board of di­rec­tors de­cided to re­in­state [Gama], they specif­i­cally stated that there had been no cor­rup­tion or dis­hon­esty com­mit­ted by Mr Gama in the award and that there had been no breach of our ethics poli­cies,” added Sigonyela.

He said that Transnet had, “through an in­de­pen­dent firm of at­tor­neys, con­ducted a vig­or­ous and ex­haus­tive in­ves­tiga- tion ... the probe found that Transnet de­rived full ben­e­fit from the amounts in­curred on all con­tracts with GNS and that Transnet found no ev­i­dence of wrong­do­ing by GNS or any of­fi­cials. As a re­sult, Transnet has moved on.”

But there ap­pear to be con­flict­ing views within the NPA about whether the cor­rect de­ci­sion was made.

Last June, a Johannesburg lawyer wrote to for­mer pros­e­cu­tions head Ad­vo­cate Mx­olisi Nx­as­ana to ask for in­for­ma­tion about the out­come of the po­lice in­ves­ti­ga­tion.

Although Nx­as­ana ini­tially strug­gled to lo­cate the docket, in March he replied, say­ing he had found the docket and was tak­ing a sec­ond look at the NPA’s de­ci­sion not to pros­e­cute.

Nx­as­ana wrote in an email: “The docket com­prises about 10 lever arch files, but I can con­firm that one of the sus­pects therein is Mr Siyabonga Gama.

“I have de­cided to relook at the mat­ter and it may take quite some time be­fore I fin­ish go­ing through the docket, but I can as­sure you that the mat­ter is re­ceiv­ing ur­gent at­ten­tion.”

An in­ter­nal NPA memo from March shows that Nx­as­ana re­ferred the case to three of the NPA’s top brass – deputy na­tional di­rec­tor of public pros­e­cu­tions Ad­vo­cate Nomvula Mokhatla, head of the spe­cialised com­mer­cial crimes unit Ad­vo­cate Lawrence Mwrebi, and south Gaut­eng di­rec­tor of public pros­e­cu­tions Ad­vo­cate An­drew Chauke – for a de­ci­sion.

The memo states: “The mat­ter ap­par­ently in­volves the se­nior of­fi­cials of Transnet Freight Rail, a di­vi­sion of Transnet, in­clud­ing its chief ex­ec­u­tive, Mr Siyabonga Gama, who are al­leged to have con­tra­vened the pro­vi­sions of the Preven­tion and Com­bat­ing of Cor­rupt Ac­tiv­i­ties Act No 12 of 2004, as well as fraud and money laun­der­ing. Let me know as soon as you have made a de­ci­sion.”

Af­ter Nx­as­ana’s res­ig­na­tion on May 31, City Press ap­proached his re­place­ment, Ad­vo­cate Shaun Abra­hams. The NPA then con­firmed that they were still re-ex­am­in­ing the case and the de­ci­sion not to pros­e­cute any of those in­volved.

But Gama de­nied this, say­ing in court pa­pers filed late on Fri­day that, in a dis­cus­sion with his at­tor­ney, Abra­hams said “the de­ci­sion not to pros­e­cute re­mains the of­fi­cial po­si­tion of the NPA”.

Public Pro­tec­tor gets in­volved

In his bid to fi­nally be ap­pointed Transnet CEO, Gama faces yet another hur­dle.

In July, City Press re­ported on the draft find­ings of a Price­wa­ter­house­Coop­ers (PwC) in­ves­ti­ga­tion into al­le­ga­tions of var­i­ous ir­reg­u­lar­i­ties at Transnet Freight Rail (TFR) – the di­vi­sion that un­til re­cently Gama had headed as CEO – in­clud­ing al­le­ga­tions that staff mem­bers were in­tim­i­dated and tar­geted for rais­ing ques­tions about lu­cra­tive set­tle­ments and ten­ders.

Although the au­dit­ing firm found that the spe­cific al­le­ga­tions made against Gama were base­less, its in­ves­ti­ga­tion found ev­i­dence of wide-rang­ing ir­reg­u­lar­i­ties at TFR, all of which hap­pened un­der Gama’s watch.

PwC’s in­ves­ti­ga­tion was due to be fi­nalised in June, but City Press learnt this week its re­port is still out­stand­ing. Asked whether PwC’s scope had been ex­panded to in­clude new al­le­ga­tions, both PwC and Transnet failed to pro­vide com­ment.

This week City Press also es­tab­lished that the Public Pro­tec­tor launched an in­ves­ti­ga­tion into is­sues at Transnet af­ter re­ceiv­ing whis­tle-blower re­ports of “un­law­ful con­duct, in­clud­ing cor­rup­tion, abuse of power, vic­tim­i­sa­tion of em­ploy­ees and breaches of the code of ethics and the PFMA”.


KEEP­ING MUM: Siyabonga Gama (left), the cur­rent chief ex­ec­u­tive of Transnet Freight Rail Lim­ited, and its act­ing CEO, leaves the high court in Johannesburg yesterday

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