DPE welcomes arrest of former Transnet executives for alleged corruption and fraud

30 August 2022

The Department of Public Enterprises welcomes the arrest and court appearance of former Transnet Executives on charges related to alleged corruption, state capture and fraud.

The arrest of former Transnet Group Chief Executive Officer, Brian Molefe and former Transnet Chief Financial Officer, Anoj Singh, is an indication that law enforcement agencies are following up on key recommendations of the Zondo Commission of Inquiry into allegations of state capture, corruption and fraud in the public sector including state entities.

Former executives Molefe and Singh were joined in the dock by Niven Pillay and Litha Nyhonyha, directors at the Gupta-linked firm, Regiments Capital. Their appearance goes a long way to communicate the message to all South Africans that no stone will be left unturned until those that were complicit and conspired to damage State-Owned Enterprises (SOEs) as part of the state capture project are brought to book.

"Now that the former Transnet Executives are arrested and appeared in court, it is a signal that government will not tolerate corruption and fraud at our State-Owned Enterprises, including in the public sector," said Public Enterprises Minister Gordhan.

"The Department has long held the view that those that conspired and were associated with the state capture project to damage our SOEs, should be brought to book to account for their actions. There are no longer "fake news" narratives to avoid accountability. We are now waiting for the state to prove its case so that we can finally see people being locked up," said Minister Gordhan. During the Zondo Commission of Inquiry many South Africans heard evidence and submissions of complicity of the former Transnet and Eskom executives in the state capture project.

In a report on Transnet, the Zondo Commission recommended that "law enforcement agencies conduct such further investigations as may be necessary with a view to the possible prosecution of Brian Molefe, Anoj Singh, Mr. Siyabonga Gama, Mr. G. Pita, and Mr Thamsanqa Jiyane on charges of corruption and racketeering in relation to cash payments they received during the Gupta Compound visits around 2010 — 2018."

The Zondo report further stated that law enforcement agencies amongst others conduct such further investigations as may be required with:

A view to the possible prosecution of any Transnet official on a charge in terms of section 86 (2) of the Public Finance Management Act (PFMA) by wilfully or grossly negligently contravening section 51 of the PFMA by wrongfully deviating from the evaluation criteria of the instruction note of the National Treasury of 18 July 2012 and the provisions of regulations 5 and 6 of the Preferential Procurement Policy Framework Act (PPPFA) regulations in relation to the evaluation of the bids for the 1064 locomotives.

A view to the possible prosecution of any member of the negotiations team that conducted the post tender negotiations for Transnet in relation to the procurement of the 1064 locomotives on corruption charges or in terms of section 86 (2) of the PFMA, by acting corruptly or not acting in the best interests of Transnet in managing its financial affairs by agreeing to the payment of excessive advance payments to China North Railway (CNR) and China South Railway (CSR) and not complying with the local content requirements of the RFPs of the tender in relation to this transaction.

The Department welcomes the latest high-profile names added to the charge sheet, as the damage inflicted on our SOEs are still felt today, which deprived many South Africans of the much-needed services that are provided by the fully-functional state entities.

The road to fix the damage left by former executives to our SOEs has been hard and frustrating, punctuated by denialism and the fake news narrative and misinformation campaigns. However, we have worked diligently to ensure we turn around the SOEs so that they become instruments of transformation and provide the much needed services to all South Africans.

Issued by Department of Public Enterprises, 30 August 2022