State Capture judge seeks response from the Hawks over delays in Transnet bribe case

Justice Raymond Zondo, chairperson of the State Capture Commission, has instructed the commission’s legal team to make contact with the Hawks as a matter of priority to determine why – nearly 18 months after a complaint was filed in terms of anti-corruption laws – there appears to have been no progress in the case.

“This is taxpayers’ money. A year and a half, if not more have passed, and still, nothing has happened.”

“Please can the legal team get in touch with the head of the Hawks. I want to know what is happening about this case and why it has taken so long for the matter to be concluded,” Justice Zondo said upon conclusion of damning testimony by Roberto Gonsalves, a minority director involved in a controversial locomotive deal between Transnet and China North Rail.

Gonsalves and a group of South African partners involved in a consortium to supply Transnet with 232 diesel locomotives have been fighting their Chinese partners since 2015 when they were first confronted with a Gupta-linked company hired to negotiate a claim for the relocation of an assembly venue from Pretoria to Durban.

The consortium had in fact calculated the costs to just short of R10-million (R9.7m) and included it in its final bid price.

But, CNR’s local Chinese representatives then presented the minority shareholders with an unknown entity called Business Expansion Products (BEX) contracted, without their knowledge and support, to negotiate a further claim for the relocation which then shot up to R647-million.

For this, BEX, a company allegedly linked to Gupta kingpin, Salim Essa, was paid R67-million plus VAT, upfront.

Gonsalves and the other minority directors reported the staggering increase to former Transnet bosses, Siyabonga Gama and Anoj Singh, as far back as 2016 and registered a case with the Hawks in 2017.

This is the third time that Justice Zondo has asked the Commission’s legal team to check up on matters emanating from testimony: He previously asked that an ongoing Bosasa deal with Correctional Services be immediately investigated and why Colonel Navin Madhoe, implicated in a corruption scandal involving Durban businessman, Thoshan Panday, remained at work despite staggering allegations against him.

Gonsalves concluded his testimony on Friday morning when he again told the Commission that there was no justification for Transnet to have paid the Chinese-led consortium for the relocation as the costs had been factored into its bid price.

They have been waging a lengthy battle against their Chinese partner since the introduction of BEX, a company with no discernible track record in finance or rail.

In addition to reporting the inflated claim to Transnet’s Gama and Singh, Gonsalves and his partners also provided extensive documentation to CNR SA’s previous auditors, KPMG, its new auditors and law firm, Werksmans, which Transnet had hired to investigate the BEX deal.

Justice Zondo, seemingly disturbed that hundreds of millions of rands had allegedly flowed to CNR SA and BEX for no justifiable reason, was equally concerned that nothing has come of complaints that date back to at least 2016.

Gonsalves testified about a letter that one of the minority directors had sent to China North Rail SA in which the R67-million payment to BEX was described as “extortion” and a “bribe” for having aided CRN to cash in to the tune of R647-million.

This letter, supported by the other minority directors, including Gonsalves, called on CNR’s local representatives to rectify fiduciary breaches immediately by reporting the matter to authorities including the police and the Financial Intelligence Centre and to recover the money paid to BEX.

They also wanted the cash Transnet paid to the consortium to be paid back to the parastatal.

To date, they have not heard a word back, Gonsalves said.

The CNR consortium was one of four successful bidders in Transnet’s R54-billion acquisition of 1,064 locomotives – previous reports by Amabhungane have exposed shocking details of alleged kickbacks paid around some of the deals.

The Commission resumes on Friday afternoon with testimony by Sharla Chetty, the chief information officer of Transnet Port Terminal. DM