Former Transnet boss looted R26m
AN ex-transnet executive reportedly received R2 million of the more than R26m he looted from the state-owned rail, logistics, port and pipeline company.
The money administered composed of ten thousand R200 notes.
The unsolicited profits that former Transnet Capital Projects’ chief executive Linyenga Herbert Msagala is accused of were laid bare at the Special Tribunal in a judgment delivered by Judge Lebogang Modiba on Tuesday.
Msagala is said to have looted over R26m from a scheme involving IGS Consulting Engineers and its sole member, Sipho Sithole.
Transnet had initially claimed R18.4m from Msagala, his trusts, IGS and Sithole.
According to court papers, Transnet wanted the return of various amounts totalling more than R15.6m, which were proceeds of cash cheques drawn against the IGS’S bank account and deposited into the Msagala Investment Trust bank account.
Msagala was bust in a high-level probe by the Special Investigating Unit (SIU) and a Transnet lifestyle audit after he appeared to be living beyond his R3.8m annual salary in the 2015/16 annual year.
The court heard that Msagala was paid in four cheques of R500 000 each by IGS, which reflected his details on the reverse side.
His bodyguard, Aiden Smith, also cashed in three cheques issued by IGS, totalling R1.45m.
Jabulani Chauke, a protection officer acting on Msagala’s instructions, is also listed in the details of the R4.35m paid to the ex-transnet executive, according to Judge Modiba.
“The plaintiffs (the SIU and Transnet)
have established, as pleaded, that IGS, Sithole and Msagala acted in concert in an unlawful conspiracy to benefit Msagala, his family trusts and his relatives, to the prejudice of Transnet, in relation to benefits that should have been for the advantage of Transnet,” ruled Modiba.
She said the money was not for the personal enrichment of Msagala as Transnet’s employee or for his relatives or trusts.
“By so doing, IGS and Sithole intentionally and unlawfully interfered with Transnet’s contractual rights,” the judge said.
According to the judgment, these factors, as well as Msagala’s “egregious dishonesty” and the unlawfulness of his conduct, warranted a punitive cost order against the defendants, with the exception of his wife. Loretto and daughter, Bonolo.
“The SIU and Transnet should not be out-pocketed by their own attorney and client costs, as a result of Msagala, IGS and Sithole’s dishonest and unlawful conduct,” Judge Modiba stated in her ruling.
Msagala is facing a criminal investigation and pulled out of the tribunal’s proceedings the day before the proceedings, a move described by Judge Modiba as “completely unexpected”.
“The conduct of the Msagala defendants and their attorneys towards the plaintiffs’ legal team in the days leading to the trial was not only discourteous, it was a display of lack of bona fides on the part of the Msagala defendants,” said Judge Modiba.
She also dismissed Msagala’s claim that he required the services of Legal Aid SA with his wife and daughter.
“Msagala offered no explanation why he waited until the trial commenced before applying for Legal Aid and seeking pro bono legal services,” the judge said.