Transnet suspends exec

Suspended sales executive in the freight and rail division of the company, Bheka Xaba,

Suspended sales executive in the freight and rail division of the company, Bheka Xaba,

Published Mar 29, 2015

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Johannesburg -

Freight and rail parastatal Transnet is pursuing fraud and corruption charges against a top executive, alleging it has lost nearly R500 million in revenue.

Bheka Xaba, sales executive in the freight and rail division, has been suspended on allegations of abusing his position to reduce prices for big clients in exchange for financial favours, including paid holidays and luxury vehicles.

He appeared in the Pretoria Commercial Crimes Court this week, and investigations are continuing.

An internal disciplinary process is under way, with investigators securing documents that are understood to provide a picture of the scale of the alleged fraud and losses to the railway company.

Transnet offers a service to logistics companies, transporting minerals from mines across the country to ports for export.

A return trip to carry iron ore and manganese from Pretoria to Durban can cost more than R500 000, depending on the number of railway wagons used.

The Sunday Independent has seen documents that relate to the internal disciplinary hearing.

These appear to suggest there was a conflict of interest in certain relationships with a number of Transnet’s clients.

It is understood that Transnet management picked up evidence suggesting prices were being cut for select clients.

Management then ensured that all companies were charged the correct tariffs.

One of the companies allegedly involved, IFC Rail, went into business rescue.

The company was eventually liquidated last month.

The company’s creditors included Transnet, First National Bank and Absa.

According to well-placed sources, an internal forensic investigation also discovered conflicting relationships between Xaba and owners of the companies involved and some of their BEE partners.

It appeared that some were sponsoring Xaba and his family through gifts.

Documents seen by The Independent on Sunday show that, in 2013, Xaba bought a Porsche, valued at just over R1.1 million.

It is understood that when Transnet investigators subpoenaed Porsche to respond to questions about the transaction, the luxury vehicle company alleged that a deposit of R430 000 had been paid by a BEE partner of one of Transnet’s clients.

It is also understood that Xaba produced documents that said the money had been provided as a loan by the BEE partner.

According to Xaba’s documents, the first repayment was due in December.

A source close to the process, who spoke on condition that their name was withheld, said that even such a loan arrangement would amount to a “personal financial relationship” with the client of an employer, in this case Transnet.

“By any standards, that falls foul of the Public Finance Management Act,” he said.

It is also alleged that Xaba and his family went on trips and holidays with officials of the companies for which he is said to have cut prices.

It is understood that In one instance, a travel agent who booked flights and accommodation for Xaba and his family produced documents that showed their flight tickets had been paid for by the owner of one of the companies alleged to have been involved.

Xaba has said he cannot comment as he remains an employee and this is an internal matter.

Transnet spokesman Sandile Simelane refused to give details of the procedures under way against Xaba.

However, he confirmed that the disciplinary process had begun and that criminal complaints had been filed against the sales executive.

It is understood that fellow Transnet employees warned that the prices approved for certain companies were irregular.

It is alleged that subordinates were told to write motivations for the irregular prices.

This is said to have been done in anticipation of possible audits of the transactions..

It is understood that investigators are also assessing whether statements made to Transnet’s pricing committee were accurate and whether the alleged wrongdoing meant other companies were denied opportunities.

Xaba remains on suspension.

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Sunday Independent

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