Explainer: Here's how Singh and Molefe looted Transnet of billions

Explainer: Here's how Singh and Molefe looted Transnet of billions

At the commission of inquiry into state capture, Transnet acting CEO Mohammed Mahomedy detailed how laws and regulations were cast aside by top officials. Billions of Rands were moved from the state-owned entity to Chinese counterparts, and the details were laid bare.

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Transnet acting CEO Mohammed Mahomedy testified at the Zondo Commission, detailing how laws were broken by the state-owned entity's top officials.

The Citizen reports that billions of Rands had been moved from Transnet to Chinese entities, Gupta-linked local companies and international firm, McKinsey, in irregular transactions.

Ex-CEO Brian Molefe and CFO Anoj Singh had allegedly pushed through unusual deals by bypassing management structures and at a huge cost.

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Mahommedy told the inquiry that this had been in blatant disregard to duty, the Public Finance Management Act and National Treasury regulations.

During his testimony, Mahommedy detailed the irregularities as follows:

  • 2014 saw R166 million was paid to Regiments Capital and Trillian, all Gupta-linked, for 'success fees' for having 'negotiated' a China Development Bank loan worth billions for the purchase of over 1 000 locomotives
  • A R93.5 million payment was made to Trillian for negotiating a loan from ABSA, Nedbank, Future Growth and the Bank of China
  • Total outlay costs, around R38.6 billion, for the locomotives ended up costing around R54 billion on completion
  • R2.2 billion in contingency buffers ballooned up to R4 billion
  • Siyabona Gama, former CEO of Transnet Freight Rail, and Thamsanga Jiyane, former chief procurement officer, waived the mandatory BEE compliance requirement in order to accommodate the Chinese in the transaction
  • R700 million worth of late payment penalties were paid to the China South Rail company
  • An e-mail between a China South Rail executive and ex-chief supply chain officer Garry Pita, who went on to become CFO, expressed his gratitude to having met Molefe, assuring him that he would be paid for 'facilitating support'

Mahommedy is expected to continue his testimony today.

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Source: Briefly.co.za

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