Transnet to sue former CEO Gama for R166m
The state utility to launch a bid to recover money paid to Gupta-linked company Regiments Capital
Transnet will be suing its axed CEO Siyabonga Gama for R166m, which the utility says was an overpayment made to Gupta-linked Regiments Capital.
This relates to a consulting contract awarded to Regiments as part of Transnet’s purchase of R54bn of 1,064 locomotives, which has been the subject of various investigations. International consulting firm McKinsey, which came under fire for the work it did for Eskom with another Gupta-linked firm, Trillian Capital Partners, was also contracted to do work on the locomotives purchase.
Gama’s axing came after these investigations found that he, former CEO Brian Molefe and Gupta associates may have acted unlawfully in relation to the purchase of the locomotives.
The claim of R166m came to light in an affidavit filed by Transnet board chairman Popo Molefe, on behalf of himself and his fellow directors, in response to Gama’s application in the labour court asking for the termination of his contract to be overturned.
The embattled CEO also wants the court to find that the Transnet board members, in their personal capacities, are held in contempt of court.
The labour court heard Gama’s application on Thursday but has reserved judgment.
Gama was fired from the entity on Sunday with six months’ notice. However, his last day in the office was Monday.
Last month, when the Transnet board informed Gama that it intended to terminate his employment contract, it asked him to give reasons why this should not happen. It also informed him that he would have to personally pay back the overpayment to Regiments.
In the September letter, Transnet said Gama had to repay R151m for the overpayment, but in the court papers Popo Molefe said he was being sued for R166m.
Molefe, in his affidavit to the labour court, said Gama, as the CEO, had not protected Transnet’s interests in the 1064 locomotives tender, the biggest at the state-owned entity to date.
“The board will this week resolve to issue summons against Mr Gama for the repayment of an overpayment of R166m (excluding VAT) made to Regiments Capital. Mr Gama recommended, solicited, approved and colluded in procuring the overpayment when he was the acting GCE [group chief executive],” he said.
Molefe said the board believed that former Transnet CFO and Gupta ally Anoj Singh and Gama had “colluded” to procure an undue overpayment to Regiments.
“He is going to be sued for the repayment of that amount,” he said.
Molefe said the requirements of trust and confidence was essential for the relationship between the board and its CEO.
“The board cannot have at the helm of Transnet a man whom it is suing for the repayment of an overpayment of R166m (excluding VAT)”.
In the affidavit, motivating why the court should dismiss Gama’s contempt application, Molefe said he did not trust the former CEO.