Prasa’s ex-CEO Lucky Montana joins the state capture commission conspiracy club

Montana, who is implicated in staggering corruption and maladministration during his tenure as CEO of the Passenger Rail Agency of South Africa (Prasa), begun a day of hearings before the Commission of Inquiry into State Capture chairperson Deputy Chief Justice Raymond Zondo by presenting a 98-page statement.

Montana, who was Prasa CEO from 2010 to his resignation in 2015, was allowed up to 20 minutes to make his opening remarks.

Montana took the gap to beat his own drum and largely repeat claims he made in a his July 2020 letter to Justice Zondo accusing the commission of bias and following a predetermined agenda.

https://www.dailymaverick.co.za/article/2020-07-03-lucky-montana-questions-zondo-on-bias-during-this-weeks-prasa-testimony-before-state-capture-commission/

He said he had “an ongoing battle” with the commission since July 2019, when he asked for an opportunity to testify about investigations into Prasa contracts conducted by Werksmans Attorneys, which he alleged was a money-making scheme for the law firm.

Werksmans Attorneys were one of a number of firms tasked by National Treasury to investigate Prasa contracts from between 2012 and 2015 that were each worth more than R10m, following former Public Protector Thuli Madonsela’s 2015 Derailed report on mismanagement at the rail agency.

Montana, who has previously claimed Werksmans were fraudulently appointed and the cost of their investigations inflated, said the commission investigators initially wanted to “curtail” his evidence dealing with Werksmans “and a whole range of issues”, only for the commission to later allow evidence from the Werksmans reports to be placed before it.

He said Werksmans had conducted unlawful surveillance on him, claiming they had been responsible for his house being broken into a number of times, and nearly killing his son.

He said Prasa had “made major gains” in the last ten years. “Those gains have been reversed in the last three years and more specifically since I’ve left.”

Montana went on to accuse former Prasa board chairperson Popo Molefe, with whom he had a public spat before tendering his resignation in March 2015, of having siphoned money off Prasa contractor SA Fence and Gate, which he claims was paid into Molefe’s foundation trust. 

He returned to this accusation, as well as accusations against Werksmans Attorneys, a number of times throughout the day as he went on to filibuster past questions put by the commission’s evidence leader on the Prasa workstream, advocate Vas Soni.

Responding to his statement, Justice Zondo, who seemed to treat Montana with kid gloves, thanked Montana “for largely not re-implicating anybody”.

Zondo went on to say it “would be wrong for us to think that we never make some mistakes or that everything we say will always be understood the way we intend it”.

“I can assure you that there is no predetermined outcome I have on anything, but I respect everyone’s view. Certainly I can assure you that I am looking at all evidence.”

He said the issue of Werksmans has been brought to the commission, in part due to Montana raising the matter.

Advocate Soni then put allegations from Molefe’s affidavit to Montana, beginning with the Auditor-General’s findings of R500m in irregular expenditure at Prasa during the 2014/15 financial year. This finding contributed to the Prasa board under Molefe instructing Werksmans to investigate the rail agency’s contracts.

Montana’s response illustrated his scattergun approach to evidence, to the apparent effect of leaving Soni clutching for an interrogative point of entry while Zondo remained largely impassive. This is an excerpt from his lengthy response: 

“In 2014/15 the irregular expenditure is R100-million then what happened is I left in July (2015) before the financials were... (finalised). The auditors know, I work with the office of the auditor-general but I go into details of the business and I always fought with them, respecting the office but making sure we always got the right thing... These financials do not support Mr Molefe’s thing which is the fact that after I have left in 2015 July, when they finalised they added in irregular expenditure. Chair, you raised a concern to say how can irregular expenditure increase so much, to almost R20-billion and nothing is being done?”

The reference to R20bn irregular expenditure appeared to have been a reference to Prasa’s R24-billion irregular expenditure in the 2017/18 financial year.

https://www.dailymaverick.co.za/article/2021-02-02-commission-hears-sorry-tale-of-ministers-ignoring-mps-papering-over-prasa-cracks-and-the-late-ag-makwetus-damning-affidavit/

Soni’s point that the audit finding R500-million in irregular expenditure for the year ending 31 March 2015 covered the period Montana was at the helm at Prasa, was met with Montana accusing Molefe of conflating “the financials of 2014 and 2015”.  He said in 2014 there was a delay in finalising the financial audit due to “an accounting treatment”, which he claims Molefe missed as he was appointed board chair in August 2014. This R500-million in irregular expenditure was used as “justification to bring in Werksmans so they can have work at Prasa”, he said. “They’ve got a lot to explain to this country.”

He repeatedly stated irregular expenditure did not equal corruption, and “a political game was being played”.

He denied Molefe’s assertions, put by Soni, that he failed to provide documents he required when Molefe was appointed as chair, and went on to state that Molefe was appointed because he and former board chair Sfiso Buthelezi had refused to accept an “unlawful instruction” to cancel an award of a contract to the French company Alstom to build new trains with local consortium Gibela.

“Prasa was destroyed by greedy ANC politicians who didn’t like an award to a company. They were even telling us ‘why do you appoint a French’ and I said to them change the laws and tell us that we shouldn’t appoint imperialist or multi-national companies because you are part of a world trade organisation, you have signed certain things.”

He said a meeting with former transport minister Dipuo Peters in which he refused to cancel the contract with Alstom resulted in Peters stating she’d “change the board”, which was coming to the end of its three-year term.

He also claimed to have prevented the Guptas from interfering with “our rolling stock”.

“When they tried to do illegal things, I told them no.”

“That is why I became an enemy,” he said, feeding into conspiracy theories touted by the likes of former President Jacob Zuma, former Transnet and Eskom CEO Brian Molefe, and former Eskom executive Matshela Koko.

Montana defended the corrupt Swifambo contract in which a new company set up by Auswell Mashaba scored a R3,5-billion deal to supply 70 locomotives to Prasa, of which only 13 were delivered and found to be too tall to run on most of South Africa’s rail network. As Pieter Louis Myburgh writes in Daily Maverick: 

“In July 2017, Johannesburg high court Judge EJ Francis ruled that Prasa had awarded the contract to Swifambo through a “corrupt tender process” and that Swifambo acted as a front for Vossloh España, the Spanish manufacturer of the troubled Afro4000 locomotives, 13 of which were delivered to South Africa (70 locomotives were ordered in total). The high court ruled that the contract needed to be set aside.”

https://www.dailymaverick.co.za/article/2019-05-09-end-of-the-line-for-prasas-tall-trains-supplier/

Swifambo took the matter to the Supreme Court of Appeal and lost, with the Constitutional Court then dismissing leave to appeal, with costs.

Montana said he applied to join as friend of the court in the High Court case because he could see from the court papers that Swifambo “did not have all the facts”. His application was denied.

Montana accused the High Court Judge of illegally consulting with Molefe in his chambers during the case, claiming he saw Molefe come out of Judge Francis’s chambers, and he rejected the Supreme Court of Appeal judgement from a full bench.

Queried by Soni why he had not taken his accusation against Judge Francis up with the Judicial Services Commission, he said he would do so “at the right time”.

He also admitted to never approaching Swifambo’s legal representatives to present them with the facts he claims to have at his disposal, nor did he inform them of Judge Francis’s apparent illegal conduct.

He later in the evening went on to rubbish former Public Protector Thuli Madonsela’s damning Derailed report on Prasa published in 2015, saying Madonsela had applied legal prescripts that were not applicable to Prasa.

Zondo said Montana would be called back, as early as Tuesday next week, to deal with allegations contained in affidavits by Prasa Head of Legal, Risk and Compliance,  Martha Ngoye, and the general manager of Group Legal Services, Fani Dingiswayo.

The commission will on Monday hear testimony from the Speaker of Parliament, Baleka Mbete, and National Council of Provinces chair Amos Masondo regarding Parliamentary Oversight.

ANC chair Gwede Mantashe is billed to return on Monday evening. DM