Like Eskom, Transnet spent millions on Gupta-owned TNA for no return value, inquiry hears

By Zintle Mahlati Time of article published Jan 24, 2020

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Johannesburg - The Zondo commission has heard how Transnet wasted millions sponsoring a page in Gupta-owned The New Age (TNA) newspaper which had no value for the state-owned enterprise (SOE). 

Transnet’s internal communications specialist Joseph Frank took the stand on Friday and explained how he faced pressure from his manager to ensure that Transnet’s advertising spend was spent on TNA. 

The state capture inquiry has previously heard evidence from officials of other SOEs such as Eskom who explained how millions were spent on sponsoring TNA. SOEs paid for adverts in the now defunct-newspaper and some sponsored its business breakfasts which were broadcast live on SABC’s Morning Live.

Frank’s evidence focused on a sponsorship deal signed between Transnet and TNA which saw the SOE pay close to R2 million (R327, 0000
 every month) over six months for its company name to be printed in a story profile page called “The Interview”. Frank said “The Interview” was a weekly feature in TNA which profiled various prominent individuals.

He said Transnet’s marketing and communication unit was approached by a Mr Roux from TNA who proposed the sponsorship deal to Transnet. He said the SOE would get a logo of its name, a strip advert and naming rights for the page as part of the deal.

Frank explained that the agency advising Transnet on its ad spend had been apprehensive about spending R2 million on the sponsorship. It did not have value for money for Transnet and TNA had no ABC numbers which would be used to track a newspaper’s market reach across the country. 

"What made it hard is that we could not test the reach of this newspaper,” Frank said.

He explained that his manager Mr Sigonyela insisted that the deal should be finalised.

"I was suspicious because the advice received said it was not a good idea to support the sponsorship. We were putting the spending of this money at risk."

When Frank raised his concerns with Sigonyela he was told to push ahead with the deal.

"He said it was not important at that stage and that was the end of the conversation,” Frank said. 

"I was under significant pressure from Mr Sigonyela. I was to provide him with a report to show that I was doing my work and how the process was followed. This was as if my job was determined by proof that I was doing my work."

The sponsorship deal was signed off by controversial former Transnet CEO Brian Molefe and was renewed every six months.

Deputy chief justice Raymond Zondo expressed shock at the amount of money spent by Transnet on the deal when it was obvious there was little value for money.

"Transnet was just being robbed. You say they must pay R2 million for an interview that would just be called "Transnet interview?” Zondo asked.

Frank shared similar sentiments about the lack of value of the deal.

"No, Transnet did not receive any return on investment. Based on where TNA ended the association did not give us a good reputation." 

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