File image: Brian Molefe. (Picture: Simphiwe Mbokazi).

CAPE TOWN - Former Transnet boss, Brian Molefe reportedly lied to the Transnet board to amplify the 1 064 locomotive tender which awarded Gupta-linked businesses billions of rands. 

According to a December 7, 2017 report which was compiled by law firm Werkmans, Molefe is described as “cloaked in corrupt and reckless activity” according to Fin24. 

According to the report, part of the increase of almost R16bn over the estimated and originally approved cost for the tender appear to be unreasonable. 

Despite the claims in the report, Transnet did not act and instead appointed law firm, MNS Attorneys to investigate the claims further. 

Further illicit dealings were revealed by an April 2013 proposal to buy 1 064 electric and diesel locomotives. This contract would have cost Transnet R38.6 billion over a span of seven years. However, the contract escalated to R54.5 billion. 

According to the report, Molefe reportedly requested the board to approve the increase in cost, citing fluctuations in currency value and variations in cost. Yet, these costs were reportedly already accounted for in the R38.6 billion amount. 

Current Transnet chief executive Siyabonga Gama reportedly raised concerns, however, the proposal was still approved. 

Tender divided

Four suppliers reportedly benefited from the tender. One company of note is China South Rail (CSR) which are also the Gupta’s business partners. 

The company was also reportedly allowed to award the Guptas R10 million for every R50 million locomotive they built. 

CSR was also given a 30% advance payment, according to a forensic report compiled by Wits University accounting Professor Harvey Wainer. 

Advance payments of R11.2 billion were made to four bid winners. Meanwhile, Transnet spokesperson Molatwane Likhethe deemed the report as inconclusive while Molefe reportedly claimed that he did not see the report. 

In other Molefe news, the former Transnet and Eskom boss just last month lost his application for leave to appeal against the judgment that he had resigned from the power utility and was thus not entitled to his “golden handshake. 

The Gauteng High Court, Pretoria, in January ordered that Molefe had to pay back the about R11-million he had already received of the R30-million handshake.

Molefe last month turned to court in a bid to obtain leave to appeal the judgment before the Supreme Court of Appeal in Bloemfontein.

But it took judges Hans Fabricius and Elias Matojane about two minutes after arguments were concluded to turn down the application. Judge Matojane simply said that after they carefully considered all the arguments, they came to the conclusion that another court would not come to a different finding.

Molefe was not at court as he apparently had family responsibilities, but his lawyer, Barry Farber, said they will consider the judgement before they will decide whether to petition the SCA for leave to appeal. “I must still get instructions in this regard from my client,” he said.

Farber, however, said he was somewhat shocked by the outcome. Before the start of court proceedings, he told IOL that he believed Molefe had a good chance of being granted leave to appeal.

Molefe’s advocate, Arnold Subel, mainly argued that the court made a mistake when it found that Molefe had voluntarily resigned from Eskom in November 2016. He said Molefe took early retirement and he was thus entitled to certain pension payouts as part of his retirement package.

Subel said the finding that Molefe had resigned should have been set aside, which would in effect mean that he had never left Eskom.

This prompted Judge Fabricius to question where Molefe was employed at this stage. Subel said: “I have no idea.” Judge Fabricius said he asked this because he ( Subel ) argued that Molefe should be restored in his position as CEO at Eskom.

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- BUSINESS REPORT ONLINE