JOHANNESBURG - The Werksmans report on the procurement of 1 064 locomotives has accused Transnet of not co-operating fully with its investigation.
Werksmans said the procurement was cloaked in corrupt and reckless activity.
The law firm said Transnet did not volunteer or offer any documentation, “supporting an inference that the flow material evidence may have been deliberately withheld or sanitised”.
It said it could not interview key witnesses, such as former chief financial officer Anoj Singh, Gupta family associate Salim Essa, Niven Pillay of Regiments Capital, Guo Bingqiang of China South Rail and former Transnet Group Treasurer Mathane Makgatho, who left the company in 2015.
“The facts revealed by this investigation raise concerns as to the conduct of the erstwhile and current executives and other officials of Transnet,” Werksmans said.
“This conduct requires further investigation by a judicial inquiry with prosecutorial and inquisitorial powers, including the authority and jurisdiction to compel witnesses to provide relevant documentation and oral evidence.”
The report identifies serious breaches of statutes, regulations, corporate governance and unlawful conduct in relation to the transaction involving billions of rand. Werksmans’ scope of work included investigating whether the process followed in procuring the locomotives was in compliance with the company’s procurement policies and procedures as well as the applicable National Treasury Regulations.
It also had to review, verify and validate the submissions of Transnet’s Acquisitions and Disposal Committee and the board.
Audit report Werksmans said a forensic audit report, which dealt with the financial aspects of the transaction, identified, among others, that the Transnet board provided materially misleading, incorrect and inadequate information.
The report said part of the increase of the cost of the transaction from the original R38.6 billion to R54.5bn appeared inexplicable, unreasonable and excessive. It said there was “a cavalier” waste of vast sums of money.
The Transnet board approved the increase on May 28, 2014.
Werksmans has recommended that Transnet immediately recover wasteful expenditure from those responsible, institute appropriate disciplinary action against those individuals as identified in the reports and get South Africa’s Directorate for Priority Crime Investigation and the National Intelligence Agency to investigate matters raised in the investigation.
It said Transnet should immediately recover a R100 million fee paid to Regiments between February and March 2014, which appeared unjustifiable. Werksmans said the fee raised questions about the conduct of former Transnet chief executive Brian Molefe and Singh.
The report was critical of the Transnet board.
“It is apparent that the exercise of corporate governance, integrity and judgment in accordance with the provisions of the (Public Finance Management Act) and fiduciary duties has been lacking,” it said.
Werksmans recommended an investigation by a judicial inquiry with prosecutorial and inquisitorial powers.