Attorney Madimpe Mogashoa gave evidence relating to allegations of corruption at the Passenger Rail Agency of SA. Picture: Itumeleng English/African News Agency(ANA)
Attorney Madimpe Mogashoa gave evidence relating to allegations of corruption at the Passenger Rail Agency of SA. Picture: Itumeleng English/African News Agency(ANA)

Former Prasa board chair pushed for Prasa to pay out engineering firm, inquiry hears

By Zintle Mahlati Time of article published Aug 12, 2020

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Johannesburg - An attorney who represented Prasa in its legal dispute with Siyaya Engineering Group of companies has told the Zondo commission he was told by former board chairperson Judge Nana Makhubele to draft settlement agreements without consultation with the agencies internal legal team.

Madimpe Mogashoa, an attorney from DM Inc, a law firm that represented Prasa on various legal matters, took the stand at the inquiry on Wednesday.

Mogashoa detailed his involvement it proceedings and engagements with Makhubele in what resulted in Prasa being forced to settle R60m to Siyaya group of companies.

Siyaya and Prasa had been involved in a legal dispute in 2017 where the engineering company claimed the parastatal owed it millions in unpaid fees for services rendered.

Prasa's previous board chairperson Popo Molefe and the legal team at the time believed the agency had legal standing and was not required to pay Siyaya. Molefe was later replaced by Mokhubele on October 2017.

Prasa's legal representatives, Martha Ngoyi and Fani Dingiswayo testified at the commission that Makhubele arrived at her new position and became preoccupied with the legal dispute between Siyaya and Prasa.

She had questions regarding Prasa's legal motives in not settling the matter. Ngoyi had complied a report motivating why Prasa had a legal basis for not wanting to settle with Siyaya.

But besides these objections, Makhubele moved to push for a settlement.

Ngoyi said the legal team was sidelined. Mogashoa told the inquiry that he had met with Makhubele on two occasions in December 2017 where Prasa's internal legal team was no present.

He said he was instructed not to consult with Prasa's legal team regarding the legal dispute and possible settlement with Siyaya.

Mogashoa said Makhubele said the board had decided that the Siyaya's four cases with the agency had to be settled and he was asked to draft a settlement offer.

"The chairperson said given the content of the interim report, Prasa had decided that it would be in its best interest to settle the matters with the Siyaya group as we would not have enough information to sustain a defence," he said.

The offers made by Prasa, on Makhubele's instruction, included settlements of R17m, R15m, R8m and R7m.

These were cases disputed between 2015 and 2016.

Mogashoa said Makhubele also insisted that included in the settlement, there must be a clause on its confidentiality and no admission of liability.

A settlement between Prasa and Siyaya was reached in December 2017 through an arbitration process.

However, in April 2018 the agency's internal legal team successfully won a High Court interdict which prevented the sheriff of the court from paying over the R60m settlement.

The legal team was supported in its move by former minister of transport Blade Nzimande.

Makhubele resigned as Prasa board chairperson in 2018. The inquiry resumes on Thursday.

Political Bureau

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