Transnet probing claims it was involved in 6 Gupta-linked deals

CEO Siyabonga Gama says no employees found guilty of any wrongdoing in SAP kickback case

Transnet probing claims it was involved in 6 Gupta-linked deals

28 November 2017

Cape Town - Transnet is currently conducting internal probes into six Gupta-linked deals, following allegations made against them in various recent media reports, MPs have heard.

Transnet CEO Siyabonga Gama appeared before the Standing Committee on Public Accounts (Scopa) on Tuesday to account for a number of contracts that had deviations and expansions in recent years.

During the sitting, he told MPs that Transnet had taken media reports based on the recent #GuptaLeaks very seriously, and that investigations were underway.

"For all the media allegations, we made a point of reporting them to the police. There are cases that have been opened as a result of it," he told MPs.

Gupta-linked cases

All six allegations relate to the infamous Gupta family, including:

- German software giant SAP paid a 10% "sales commission" to a company controlled by the Guptas to clinch business from Transnet;

- That R71m of R73m had been paid out to three Sahara companies, Cutting Edge, CAD House and Sahara Systems, in another deal;

- Software AG entered into an agreement with a Gupta-linked company to secure a R180m contract from Transnet;

- The R50bn locomotive acquisition deal included a R5bn kickback for Tequesta, a Gupta-controlled group;

- Transnet awarded a contract to a Chinese supplier that rose from $81m to $92m to make room for "commitments and fees";

- That a Gupta-related fund had been appointed to handle Transnet's pensions, and that R232m had been misappropriated with Transnet's blessing.

As the pension deal was currently before the courts, Gama said he was limited in what he could say.

For others, Transnet's board was currently leading the process into the R50bn locomotive deal, and a report was expected by mid-December, he said.

The SAP internal probe had also been completed.

Employees cleared in SAP 'kickback' deal

Gama said that no Transnet employees were found guilty of any wrongdoing in German software company SAP's admission that it paid Gupta-linked companies to help secure contracts at the entity.

"In the SAP deal, we can say no wrongdoing was found on the part of Transnet employees, but there were three employees that SAP were going to do additional investigations on," he said.

Last month, SAP said it had reported its Gupta-linked accounts to US authorities for further investigation, after an amaBhungane report accused it of paying a 10% "commission" to clinch Transnet's business.

It had also initiated disciplinary procedures against three employees, but was not working with South African authorities.

Hundreds of contracts to be probed

Scopa chairperson Themba Godi said the committee needed to treat the claims as allegations for now, until there were concrete outcomes to the various processes.

ANC MP Nthabiseng Khunou added that she was worried that Transnet had only acted after it was exposed in the media, and were not acting proactively.

Scopa will return on Wednesday next week to scrutinise hundreds of Transnet contracts, with the aid of National Treasury and the Hawks.

Gama and his delegation were requested to provide more information on "each and every case" presented before the committee on Tuesday, so as to prepare for the meeting next week.

Scopa would also ask National Treasury for all the reports it had compiled on Transnet. News24


Only 7% of Transnet's senior supply chain staff have been vetted

Cape Town - Transnet has only vetted seven percent of senior staff who handle supply chain management, despite a 2014 Cabinet directive to vet all employees in that field.

Transnet CEO Siyabonga Gama told the standing committee on public accounts (Scopa) on Tuesday that only 56 of the more than 750 senior supply chain managers had been screened over the last three years.

Cabinet had directed all government departments and state-owned enterprises in 2014 to vet all supply chain staff with the help of the State Security Agency (SSA).

At the time, Transnet decided to categorise employees and only began the process for the more than 750 senior managers, rather than all staff, and it has not progressed very far to date, MPs heard.

"We are meeting with the SSA later this week to ensure there is adequate and appropriate capacity to enable us to ensure we move forward with this process," Gama said.

"It has taken now more than three years to deal with this process and the rate of completion is dismal and unacceptable."

He admitted there had been "management lapses" and they have set terms of reference to expedite the process and to "regularise" the process.

Billions of rands at stake

Gama's excuse was that the directive was given to his predecessor at Transnet in 2014 and, upon taking up the role permanently in 2016, management had not been told the process had stopped.

"There was unnecessary procrastination, which is why I'm asking the indulgence of this committee to go and regularise this matter.

"There was also no feedback to senior management that the process had been stopped."

MPs were unhappy with the feedback, after requesting last week to be furnished with a list of those who had been vetted.

They said the 7% figure was just not good enough for an entity currently investigating six high-profile cases, where contracts worth billions of rands were under scrutiny.

They also heard last week that labour unions representing the employees were the ones resisting the calls, saying it was an unconstitutional "invasion of privacy".

However, Gama withdrew that statement. It was the first time he had heard of the unions being blamed and it was not their fault, he said.

Failure 'of epic proportions'

ANC MP Nthabiseng Khunou said it looked like staff were trying to hide something, and wanted to be treated with kid gloves.

"This is a public institution. Once you come into a public institution, there are aspects of your privacy that get taken away."

IFP MP Mkuleko Hlengwa added that, by any measurable rate, 56 out of 750 was a "failure rate of epic proportions".

"Even now it is being sanitised. So, we are dealing with 696 employees who don't give two hoots in hell about the directives of their employers.

"Last week it was [supposedly] the unions. Let's not play games here chair[person]. Somebody has not done their job."

ANC MP Ezekiel Kekana demanded that the list they requested be provided to the committee.

"I suspect some of your senior management sitting here in front of me are not vetted."

SSA to be called in

DA MP David Ross said the committee should call in the SSA to understand why the vetting stopped.

Godi added that it was concerning that senior staff did not want to be vetted.

"We need the State Security Agency to give us a sense of their story, and maybe even Cabinet. Those responsible for monitoring, they take decisions, but then what?

"Vetting tests your ethics. If you are not testing those in supply chain management, you are letting the state down."

Gama agreed to ensure that 100% of staff were vetted, and that the list would be provided later on Tuesday.

It was a Cabinet directive and therefore was non-negotiable.

The committee agreed to call in the SSA on Thursday to follow up on the matter.