Four former Transnet executives, including MK Party MPs Brian Molefe and Siyabonga Gama, were granted R50 000 bail each on Monday by the Johannesburg Specialised Commercial Crime Court.
Molefe, Gama, Anoj Singh, and Thamsanqa Jiyane made court appearances for their formal bail applications after they handed themselves over to police on Monday morning.
Molefe, Gama, Singh, and Jiyane are facing 18 charges, including breaking the Public Finance Management Act (PFMA), fraud, corruption, and violations of the Companies Act, related to Transnet’s plans in 2011 to increase capacity, which led to their market demand strategy (MDS).
Strict bail conditions
The National Prosecuting Authority’s investigating directorate against corruption spokesperson Henry Mamothame said the focus of the MDS was to expand and modernise the country’s port, rail, and pipeline infrastructure over a period of seven years, with its focus being on capturing rail-friendly freight from road to rail.
Molefe and Gama are former Transnet CEOs. Singh is the former Transnet Group chief financial officer, and Jiyane was the chief procurement officer in the transport freight rail division within Transnet.
The state did not oppose their bail applications. The court granted them bail and imposed strict conditions on them.
The court ordered that Jiyane hand over his passport to the investigating officer.
The court ordered that the four accused must not apply for new passports or travel documents until their case has been finalised and it stated that they must make a formal court application should they be required to travel outside the country.
The court ordered that once the R400-million Transnet fraud and corruption case involving Molefe, Gama and Singh is concluded, the investigating officer should hand over their passports, already handed to him in 2022, to the investigating officer in the current, new Transnet case.
After granting bail to all four accused, the court postponed the matter to October 6 for further investigations.
Mamothame explained the charges that the four accused are facing in their new Transnet case.
Tender process flouted
“During the process of acquiring locomotives to expand and modernise the country’s rail infrastructure, the accused allegedly flouted the tender process by irregularly appointing a company that did not qualify, to wit CSR, a Chinese company, to provide the 95 locomotives,” said Mamothame.
“Other due processes were not followed so as to advantage CSR, and in the end, a bid which cost a little over R3.2-billion was inflated and allegedly exceeded its contract value by over R231-billion, resulting in a payment of over R3.4-billion.
“There were two other bids relating to the acquisition of 100 and then 1 064 locomotives that were procured again with CNR due to the alleged flouting of processes by the accused.
“The 100 locomotives cost R3.8-billion, inflated to R4.8-million and the 1 064 locomotives cost R38.1-billion to R54-billion.
“The accused all held key positions in Transnet, which was a state-owned entity. It was their duty to perform due diligence and ensure that Transnet got value for its money.
“They, however, are alleged to have enabled and ensured that costs were inflated and that their preferred bidder was unduly advantaged.”
He continued: “This is a state capture matter. During the State Capture Commission hearings the country heard how billions were looted from Transnet.
“This case depicts that flouting of services and the generation of billions of rands for use not attributed to the rail modernisation project.”
Separate fraud case
Meanwhile, Molefe, Gama and Singh are among nine accused in another R400-million Transnet fraud and corruption case at the Johannesburg High Court sitting at the Palm Ridge Specialised Commercial Crimes Court.
Molefe, Singh, Gama, Garry Pita and Phetolo Ramosebudi, and Regiments Capital directors Niven Pillay and Litha Nyhonhya, Trillian Asset Management director Daniel Roy and Albatime Pty Ltd owner Kuben Moodley are facing charges of contravening the PFMA, fraud, money laundering and corruption.
The charges stem from the locomotives transaction advisory tender awarded to the McKinsey-led consortium in 2012, resulting in the procurement of 1 064 locomotives valued at more than R54-billion.
“It is alleged that Regiments Capital, who benefited, was irregularly brought into the contract, increasing the contract value and scope to over R395m,” said Mamothame previously.
The trial will begin on February 2. All the nine accused are out on R50 000 bail each in the other Transnet case.
