President Cyril Ramaphosa has authorised the Special Investigating Unit (SIU) to investigate the 2011 reinstatement of former Transnet Freight Rail (TFR) CEO-turned-politician Siyabonga Gama as law enforcement turns up the heat on state capture cases.
Gama, who is an uMkhonto weSizwe (MK) party MP, was controversially reappointed as TFR CEO more than a decade ago after having been dismissed over serious allegations.
According to a Government Gazette published on Friday, Ramaphosa also asked the SIU to investigate payments made by Transnet to cover Gama’s legal costs and a contract awarded to Abalozi Security Risk Advisory, a company owned by ANC veteran and former communications minister Siphiwe Nyanda.
Disciplinary proceedings were instituted against Gama on three charges in August 2009 and he was found guilty on all charges.
One of the charges related to the contract awarded to Abalozi. According to evidence led before the state capture commission, Gama’s cellphone records showed regular contact between him and Nyanda in the period preceding the award of the R95m contract.
The security contract was awarded to Abalozi “on confinement”, a process normally followed in emergencies. It was also in excess of Gama’s delegated authority of R10m.
Gama would make a stunning return to TFR two years after his dismissal. This was after he and the company concluded a settlement agreement, in circumstances that former chief justice Raymond Zondo found questionable.
Gama was paid about R13m under the agreement and given a final written warning.
Transnet went further and agreed to make a contribution equivalent to 75% of Gama’s taxed legal costs incurred during his challenge to his dismissal.
“Considering the indefensible nature of the settlement agreement ... steps should be taken to recover the monies paid in terms of the unjustifiable settlement agreement, there are reasonable grounds to believe that the members of the board who voted in favour of settlement, the GCFO and the GCEO (as the accounting authority) may have failed to exercise their duty of utmost care to ensure reasonable protection of Transnet’s assets,” Zondo found.
“Further evidence may be needed to establish that the offer and acceptance of employment was made in order for Mr Gama to act in a manner that amounted to an improper inducement to do anything (such as advantage the Gupta enterprise).”
Gama, alongside fellow MK party MP and former Transnet and Eskom CEO Brian Molefe, is facing fraud and corruption charges over the locomotive transaction advisory tender awarded to the McKinsey-led consortium in 2012, resulting in the procurement of 1,064 locomotives worth more than R54bn.
They are joined in the dock by erstwhile Transnet CFO Anoj Singh, Regiments directors Niven Pillay and Litha Nyhonyha, former Transnet acting CFO Garry Pita, former Transnet group treasurer Phetolo Ramosebudi and Regiments Capital shareholder Eric Wood.
According to Zondo’s report, Gama had ties with the Guptas through the family’s associate, Salim Essa, and enjoyed political support from then public enterprises minister Gigaba and former president Jacob Zuma.
Last year, the SIU told the standing committee on public accounts that it was involved in civil litigation of contracts worth a total R56.9bn but had recovered just R113.6m.
National Prosecuting Authority boss Shamila Batohi told MPs last week that it did not enjoy unhindered access to all the information it needed to successfully prosecute cases referred to it by the commission.
She said the justice department was being blocked from accessing the database of evidence — an allegation the department has denied.
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