Johannesburg - The Zondo commission has heard that there has been no progress in a Hawks investigation into Transnet’s possible irregular payment of R647 million to a locomotive manufacturer.
Roberto Gonsalves, a minority shareholder in a consortium appointed to supply Transnet with locomotives, told the commission that a case that was opened with the Hawks in 2017 has yet to bear fruit.
Gonsalves was part of a consortium along with a small group of companies who were minority shareholders while China North Rail (CNR) was the majority shareholder.
The consortium was put together to bid for a tender to supply locomotives to Transnet. The parastatal had issued a tender in 2013 for the supply of 1064 locomotives. The CNR consortium was awarded a contract to supply 232 diesel locomotives.
The contract with Transnet was signed with the agreement that the manufacturing would take place in Pretoria. However, Transnet later reversed this decision and requested that the manufacturing take place in Durban. Gonsalves explained that the company did try to push against the relocation stating that Gauteng was better placed for the production, but Transnet insisted on Durban and even offered to be billed for the relocation.
Gonsalves said the CNR consortium had calculated that the move would cost R9.7 million. He said that price was included in the cost of the locomotives.
Gonsalves said he and other minority shareholders were then approached by CNR majority shareholders and asked to sign an agreement which would appoint a company called Bex as an agent to negotiate with Transnet over the relocation bill.
He said they protested to the agreement and Bex’s involvement. Gonsalves explained that they were concerned about Bex because the company seemed to be a shelf company with one director. They were also concerned about the company as it seemed to be linked to a new company registered in 2009.
Gonsalves said the majority shareholders went ahead with appointing Bex regardless of the objections. The consortium then went on to receive an R647 million payment from Transnet for the relocation fee. Bex received R67 million of the payment.
Gonsalves said the minority shareholders raised concerns about the payment from Transnet and the payment to Bex. The group raised their concerns with then Transnet CEO Siyabonga Gama who even initiated an investigation.
Gonsalves said Gama’s reaction seemed genuine, but little became of the investigation. He said they later discovered that Gama had signed off on the payment before the minority shareholders had raised concerns.
He explained that there was no explanation for why Transnet had paid the money to the consortium.
Gonsalves explained that due to a lack of progress the minority shareholders opened a case with the Hawks providing them with documentation from auditors that had red-flagged the irregularities regarding the payments from Transnet and Bex’s involvement.
Gonsalves said the Hawks case was reported in late 2017 and since then no progress has been communicated.
He explained that the minority board members had tried to pressure for an explanation and whether the money had been paid back to Transnet.
The chairperson of the commission deputy chief justice Raymond expressed shock at the Hawk’s lack of response on the progress of the case. He instructed the commission’s legal team to contact the Hawks on the matter.
“Transnet does not take any action to recover the money and they do not tell you that there is a lawful cause for the payment. You go to the Hawks and you explained the matter that this is the money that was paid to our company and there was no reason for it to be paid, it is taxpayers' money. There is one meeting (with the Hawks) and a year and a half later you have not been told of anything and there have been no arrests.
“It is very strange. How does it take a year and a half to conclude that kind of investigation when someone from within says there is no need for such a payment. It is a matter of great concern I think the legal team should take steps to get in touch with the head of the Hawks. I want to know what is being done about this. Why should it take so long for the matter to be concluded,” Zondo said.