Ex-Transnet boss received R2m in R200 notes from dodgy company
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Former Transnet Capital Projects chief executive Linyenga Herbert Msagala was paid R2 million in cash, in the form of 10 000 R200 notes, by a supplier who gave him R26.4 million in unsolicited profits.
The Special Tribunal laid bare Msagala’s crimes in a judgment delivered by Judge Lebogang Modiba on Tuesday.
Msagala looted over R26 million from the state-owned rail, logistics, port and pipeline company in a scheme involving IGS Consulting Engineers and its sole member Sipho Sithole.
Transnet had initially claimed R18.4m from Msagala, his trusts, IGS and Sithole.
According to court papers, Transnet wanted the return of various amounts totalling more than R15.6m which were proceeds of cash cheques drawn against the IGS’s bank account and deposited into the bank account of the Msagala Investment Trust.
Msagala was bust in a high-level probe by the SIU and a Transnet lifestyle audit after he appeared to be living beyond his R3.8m annual salary in the 2015/16 financial year.
The court heard that Msagala was paid in four cheques of R500 000 each by IGS, which reflected his details on the reverse side.
His Transnet-assigned bodyguard, Aiden Smith, also cashed three cheques issued by IGS totalling R1.45m.
Jabulani Chauke, protection officer acting on Msagala’s instructions, is also listed in the details of the R4.35m paid to the ex-Transnet executive, according to Judge Modiba.
”The plaintiffs (SIU and Transnet) have established, as pleaded, that IGS, Sithole and Msagala, acted in concert, in an unlawful conspiracy, to benefit Msagala, his family trusts and his relatives, to the prejudice of Transnet, in relation to benefits that should have been for the advantage of Transnet,” ruled Judge Modiba.
She said the money was not for the personal enrichment of Msagala as Transnet’s employee or his relatives or trusts.
”By so doing, IGS and Sithole intentionally and unlawfully interfered with Transnet’s contractual rights,” the judge said.
According to the judgment, these factors, as well as Msagala’s egregious dishonesty, and the unlawfulness of his conduct, warranted a punitive cost order against the relevant defendants, with the exception of his wife Loretto and daughter Bonolo.
”The SIU and Transnet should not be out-pocketed by their own attorney and client costs, as a result of Msagala, IGS and Sithole’s dishonest and unlawful conduct,” Judge Modiba stated in her ruling.
Msagala is facing a criminal investigation and pulled out of the tribunal’s proceedings the day before the tribunal’s proceedings, a move described by Judge Modiba as “completely unexpected”.
”The conduct of the Msagala defendants and their attorneys towards the plaintiffs’ legal team in the days leading to the trial was not only discourteous, it was an utter display of lack of bona fides on the part of the Msagala defendants,” explained Judge Modiba.
She also dismissed Msagala’s claim that he required the services of Legal Aid SA with his wife and daughter.
”Msagala offered no explanation why he waited until the trial commenced before applying for Legal Aid and seeking pro bono legal services,” the judge said.