R5bn to Gupta associate

Transnet is trying to get to the bottom of how the company was committed to contracts that saw an agency linked to the Gupta family earn lavish fees on its infrastructure contracts, CEO Siyabonga Gama told MPs yesterday.

“It has given Transnet a very bad name and a very bad reputation [which we] are trying to clear now but, more importantly, if there are bad apples in Transnet, these bad apples can be removed,” he told parliament’s portfolio committee on transport at a briefing on the company’s annual results.

Gama said law enforcement agencies were probing allegations that a company set up by the Gupta brothers’ close associate Salim Essa, Tequesta, earned a 21% advisory fee that amounted to R5 billion for facilitating a contract for 359 locomotives with China South Rail.

The contract made Transnet liable for the commission.

The extraordinary arrangement, opposition MP Steve Swart said this week, was in fact a bribe funded by taxpayers.

Gama said Transnet was in the process of identifying all those individuals and entities within the state freight company that had a part in procurement corruption.

Some of the investigations will be “long-running”, he added.

Gama said it was vital to root out the corruption because Transnet traded on its reputation and had to source funding from local and foreign lenders, without the benefit of government guarantees.

Transnet launched investigations about six months ago after a trove of e-mails linked to the Gupta family’s businesses was leaked and the deal with Tequesta came to light.

One of the allegations it was looking into was the payment of a 10% “sales commission” paid by German software giant SAP to a company linked to the Guptas.

Last week, SAP confirmed, after an investigation conducted by a law firm, that payments were indeed made to Gupta-related entities, but said it had found no evidence of direct payments to Transnet or Eskom or South African government officials. – ANA