Transnet milked by Gup­tas

New emails sug­gest that front com­pa­nies were used to rake in bil­lions for the in­fa­mous fam­ily

CityPress - - News - SIZWE SAMA YENDE sizwe.yende@city­press.co.za

Anew trove of emails shows how a Transnet em­ployee tried to block pay­ments to a “small” Gupta-linked com­pany be­cause she ques­tioned how it had been ceded a com­puter and hard­ware sup­ply con­tract. The ob­sti­nance of Transnet’s busi­ness sup­port man­ager, Karen Fer­reira, prompted a Zestilor of­fi­cial to lodge a com­plaint with the chief ex­ec­u­tive of­fi­cer (CEO) of the state-owned en­ter­prise (SOE), Siyabonga Gama, on June 24 2015.

Fer­reira was ques­tion­ing how Ger­man ITC tech­nol­ogy com­pany, T-Sys­tems, ceded its IT data ser­vices con­tract to Zestilor af­ter in­her­it­ing it through its pur­chase of arivia.com in 2009. This ces­sion con­tract was ap­proved and signed by erst­while Transnet CEO Brian Molefe on December 1 2014.

Molefe was Transnet’s Group CEO from Fe­bru­ary 2011 to March 2015. Gama suc­ceeded Molefe in April 2015 in an act­ing ca­pac­ity be­fore he was per­ma­nently ap­pointed to the po­si­tion in April 2016.

Zestilor was owned by Zeenat Os­many, the wife of Gupta as­so­ci­ate Salim Essa, who has links to Transnet, Eskom and Min­eral Re­sources Min­is­ter Mosebenzi Zwane.

This ces­sion agree­ment is one of a num­ber of deals that Gupta-linked com­pa­nies sealed over the past few years in or­der to cash in on multi­bil­lion-rand ten­ders at Transnet and Eskom.

Doc­u­ments in City Press’ pos­ses­sion ap­pear to show how Essa, Ra­jesh “Tony” Gupta and Sa­hara Sys­tems’ CEO San­tosh Choubey had hands in con­trol­ling front com­pa­nies that – at face value – ap­pear to be independent.

In the doc­u­ments, Choubey’s hand looms large as he ap­pears to be us­ing dif­fer­ent email ac­counts from var­i­ous com­pa­nies such as Zestilor, Sa­hara Sys­tems and Global Softech So­lu­tions (GSS). He was also in­volved in open­ing Zestilor’s FNB ac­count in Septem­ber 2015.

Most of this in­for­ma­tion – which in­cludes in­ter­nal emails, con­tracts and min­utes of meet­ings – does not form part of the orig­i­nal Gupta email leaks.

A let­ter that Zestilor of­fi­cial Stephan Nel wrote to Gama in­di­cates that the com­pany had sup­plied equip­ment val­ued at R38 mil­lion to Transnet be­tween Jan­uary and June 2015, but that Transnet had not paid. The value of the con­tract is be­lieved to be R500 mil­lion per year, but Transnet de­clined to con­firm this be­cause its “details are con­fi­den­tial”.

“We have not been paid to date and this has ham­pered our cash flows to a point where our fi­nan­cial well­be­ing is be­ing placed in jeop­ardy … Zestilor is of the opin­ion that it is in fact our sta­tus as a small, women-led BEE [black eco­nomic em­pow­er­ment] com­pany that has led to our un­fair treat­ment and it is in this re­gard that we seek your in­ter­ven­tion and sup­port,” Nel wrote.

Nel ex­plains in the com­plaint that the ces­sion agree­ment be­tween Zestilor and T-Sys­tems was part of the SOC’s small busi­nesses de­vel­op­ment com­mit­ments, but Fer­reira had ques­tioned the le­git­i­macy of the ces­sion.

Fer­reira this week de­clined to com­ment. “That issue was sorted out. It’s a Transnet con­tract and there’s noth­ing I could do. I ac­tu­ally don’t want to com­ment about it … I don’t want to open that mat­ter again,” she said when con­tacted by City Press.

Os­many could not be reached for com­ment. She sold her Adega res­tau­rant in Fords­burg, Jo­han­nes­burg, last year and the man­ager there said she had em­i­grated to Dubai – where the Gupta fam­ily bought a home for more than R440 mil­lion. Essa did not re­spond to ques­tions sent to his email address. It is un­clear if he em­i­grated with Os­many.

Os­many left Zestilor about a year ago, ac­cord­ing to cur­rent com­pany ex­ec­u­tive di­rec­tor Ian McGre­gor. “I would like to con­firm that Ms Os­many is not a di­rec­tor nor a share­holder of Zestilor, and has not been for over a year,” McGre­gor said, de­clin­ing to con­firm if the com­pany in­her­ited deals that Os­many had clinched.

Transnet spokesper­son Viwe Tlaleane said the firm was not privy to its sup­pli­ers’ share­hold­ing struc­tures.

“There is no re­quire­ment in law or in Transnet’s pro­cure­ment pro­ce­dures and poli­cies that dic­tates that sup­pli­ers dis­close their share­hold­ing struc­ture,” Tlaleane said.

“Transnet refutes the claim that these con­tracts did not con­form to gov­er­nance pro­cesses. Transnet’s pro­cure­ment pro­ce­dures and poli­cies re­quire the com­pany to en­sure that prospec­tive sup­pli­ers and their di­rec­tors are not black­listed,” she said.

Al­though Tlaleane de­clined to con­firm the value of the con­tract, she con­firmed that the con­tract was still valid af­ter it was ex­tended last December with­out ten­der pro­ce­dures be­ing fol­lowed. To date, ac­cord­ing to sources, Do you think the Gup­tas will ever be brought to book for these and other rev­e­la­tions? SMS us on 35697 us­ing the key­word GUPTA and tell us what you think. Please in­clude your name and prov­ince. SMSes cost R1.50 Zestilor has raked in about R2.5 bil­lion.

“The ex­ten­sion was ap­proved by Na­tional Trea­sury in terms of the Na­tional Trea­sury In­struc­tion Notes. The details of the con­tract are con­fi­den­tial and may not be dis­closed to third par­ties,” Tlaleane said.

T-Sys­tems spokesper­son An­dré du Plessis said the com­pany did not have a re­la­tion­ship with the Gup­tas.

Du Plessis said that when T-Sys­tems bought Arivia, it had to con­tinue rent­ing PCs to Transnet, which was not the com­pany’s core busi­ness com­pe­tency.

“So, it made sense for us to cede this el­e­ment, with Transnet’s per­mis­sion, to a com­pany that al­ready did this on a na­tional scale – Zestilor. This was fi­nalised in 2014, four years af­ter we bought Arivia. We have no com­mer­cial re­la­tion­ship with Zestilor, so Transnet would be best placed to an­swer your ques­tions about that con­tract,” she said.

“We have no re­la­tion­ship with the Gup­tas. As an or­gan­i­sa­tion, we can­not com­ment on be­half of our cus­tomers. From a T-Sys­tems per­spec­tive, we are con­fi­dent that due process has been fol­lowed in line with our in­ter­na­tional poli­cies and stan­dards when mak­ing ac­qui­si­tions and con­tract­ing with clients,” Du Plessis said.

Gupta fam­ily at­tor­ney Gert van der Merwe de­clined to com­ment be­cause he only dealt with “court mat­ters” and re­ferred ques­tions to spokesper­son Gary Naidoo, who did not re­spond to emailed ques­tions or City Press’ phone calls since last week.

When ques­tioned about the Gup­tas’ ten­ta­cles through var­i­ous com­pa­nies at Transnet, Pub­lic En­ter­prises Min­is­ter Lynne Brown’s spokesper­son, Colin Cruy­wa­gen, said there were sev­eral in­ves­ti­ga­tions into the paras­tatal by the Hawks and Pub­lic Pro­tec­tor Bu­sisiwe Mkhwe­bane.

“In ad­di­tion, the min­is­ter has in­di­cated her in­ten­tion to re­view the boards of all six SOCs in the de­part­ment’s port­fo­lio over the next few months,” Cruy­wa­gen said.

The leaked doc­u­ments shed some light on how the Gup­tas had struc­tured these com­pa­nies, al­legedly to milk the SOCs and en­sure pay­ments ended up in their cof­fers.

An­other Gupta com­pany that can be linked to ten­ders in the SOCs is GSS. GSS is in part­ner­ship with SAP on a Transnet con­fine­ment ten­der. Tlaleane con­firmed that Transnet also had con­tracts with GSS be­tween 2013 and 2016 for the pro­vi­sion of IT re­sources.

In an email dated Fe­bru­ary 26 2015, Choubey com­mu­ni­cates with Nel and Essa about a part­ner­ship Zestilor had en­tered into with fi­nanc­ing com­pany Rent­works.

“Sir,” Choubey wrote to Essa, “as discussed, at­tached is the let­ter. Pls ad­vise. Let me know the next steps. Thanks. San­tosh (sic).” The emailed was for­warded to Nel.

The Gupta in­flu­ence at Transnet does not end with the front com­pa­nies.

They also ap­pear to have their ten­ta­cles in the Transnet board. Board chair­per­son Linda Mabaso’s son, Mal­colm, is ad­viser to Zwane, a Gupta as­so­ci­ate.

Transnet’s ac­qui­si­tion and dis­posal com­mit­tee chair­per­son, Stan­ley Shane, is Essa’s busi­ness as­so­ci­ate and serves with him on the board of Antares Cap­i­tal, while Potso Mathekga is the daugh­ter of North West Pre­mier Supra Mahumapelo, who is close to the Gup­tas.

PHOTO: FILE PIC­TURE

RUN­AWAY TRAIN Transnet’s Trans Africa lo­co­mo­tive

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