Siyabonga Gama heads to court to stop Transnet axing him
CEO wants the Labour Court to order that the notice calling on him to give reasons why he should not be fired a 'breach of employment'
Embattled Transnet CEO Siyabonga Gama will on Tuesday approach the Labour Court to stop the utility’s board from firing him.
Transnet had given Gama 10 days to show why his contract should not be terminated for alleged misconduct and maladministration in the acquisition of R54bn worth of locomotives.
In papers prepared for court, seen by Business Day, the CEO wants the court to order that the notice calling on him to give reasons why he should not be fired constitutes a "wrongful and unlawful anticipatory breach of the applicant’s contract of employment".
On October 5, Gama’s lawyers wrote to Transnet chair Popo Molefe demanding that the termination notice be withdrawn, threatening legal action if this was not done.
In a response to Gama, Transnet’s lawyers, Mncedisi Ndlovu & Sedumedi Attorneys, said their clients would not withdraw the notice.
"Should your client [Gama] fail to meet the aforementioned deadline, our client [Transnet] will proceed to take a decision on the basis of the information before it; and there are no sound legal grounds to sustain the threatened urgent court action," the attorneys said.
The 10 days expired last week. Gama is accused of misconduct and maladministration in a transaction for the purchase of R54bn worth of locomotives from General Electric, Bombardier Transport, China South Rail and China North Rail in 2012.
The state-owned rail and freight company is not only moving to terminate his contract but is also demanding that he personally pay back R151m in alleged overpayments to Gupta-linked advisory firm Regiments Capital.
Transnet, which has a monopoly or near-monopoly over ports, freight rail and fuel pipelines in SA, has been mired in state capture allegations involving the Gupta family.
The friends of former president Jacob Zuma are accused of using their connections to the former president and his family to divert state resources to their own businesses.
Gama will be asking the court to hear the matter on an urgent basis.
In response to Gama’s lawyers, Transnet said there was no basis for urgency because the CEO has been aware of the company’s intention since at least October 1.
Transnet also said it had not taken any decision that threatened Gama’s rights.
"There is no basis to argue that your client has no other alternative legal remedies to safeguard its rights; and no basis, by any stretch of imagination, that suggests that such futile court action warrants a cost order against the individual board directors in their personal capacities." The law firm said any urgent court action Gama intended to institute would be "frivolous and vexatious".
In its investigation so far, Transnet said in the letter it had uncovered evidence that "has resulted in the board losing trust and confidence in his [Gama’s] ability or fitness to continue to manage Transnet at the highest and most senior managerial level". Transnet’s board issued notices in August of its intention to suspend Gama and two other officials, after investigations by law firms Werksmans and Mncedisi Ndlovu & Sedumedi Attorneys, as well as the Treasury, into the purchase of R54bn worth of locomotives.
Thamsanqa Jiyane, chief officer of advanced manufacturing at Transnet Engineering, and Lindiwe Mdletshe, senior manager for strategic sourcing at Transnet Freight Rail, were suspended after a special board meeting earlier in September. Instead of suspending Gama, the board has since demanded that he gives reasons why his contract should not be terminated. In the papers, Gama said he wanted first to be given an opportunity to state his case in a formal disciplinary process.
Gama has been in the line of fire after investigations found that he, former CEO Brian Molefe and Gupta associates may have acted unlawfully in relation to the purchase of 1,064 locomotives. Gama replaced Molefe after the latter was appointed to run electricity utility Eskom.
Leaked Gupta e-mails contain claims that the Gupta family received multibillion-rand kickbacks as part of the locomotive deal. Gama is also facing allegations that McKinsey helped draft his MBA assignments, at about the same time the firm was awarded a contract at Transnet, together with Regiments.