Ex-Transnet CEO charged in South African graft crackdown

By S’thembile Cele | Bloomberg News |

Prosecutors charged two former top executives at South Africa’s state rail and ports operator with fraud and other crimes in a widening crackdown on alleged perpetrators of corruption during former President Jacob Zuma’s rule.

Transnet SOC Ltd. ex-Chief Executive Officer Brian Molefe, former Chief Financial Officer Anoj Singh and Regiments Capital Ltd. directors Niven Pillay and Litha Nyhonyha appeared at a hearing of the Palm Ridge Specialized Crimes Court in Johannesburg on Monday. The hearing followed their arrest by the National Prosecuting Authority’s Investigating Directorate and a special police investigative unit known as the Hawks.

The charges of fraud and violating procurement laws relate to Transnet’s award of a contract to a consortium led by McKinsey & Co. to advise it on the purchase of 1,064 locomotives that cost 54 billion rand, the NPA said in a statement. Regiments was irregularly included in the deal, the cost of which escalated to more than 305 million rand, it said. Further charges linked to Transnet’s payment of 93.4 million rand to consulting firm Trillian Asset Management in 2015 were also filed.

The four men were released on 50,000 rand ($3,000) bail each and will appear in court again on Oct. 14 alongside Siyabonga Gama, another former Transnet CEO, and five other suspects who were charged in connection with the same case in May.

A judicial commission headed by South African Chief Justice Raymond Zondo implicated Molefe, Singh and a number of others in malfeasance at Transnet, and recommended that prosecutors consider investigating and charging them. Zondo identified 41.2 billion rand’s worth of irregular contracts entered into by the state company, one of several that fell prey to what’s become known as state capture during Zuma’s almost nine-year tenure.

The charges may not be the last brought against Molefe and Singh. Zondo also implicated both men in wrongdoing at state power utility Eskom Holdings SOC Ltd., where they later held the same positions as they did at Transnet, and called for them to be held to account.

President Cyril Ramaphosa, who succeeded Zuma in early 2018, on Monday heralded the progress his administration has made in tacking graft.

The Investigating Directorate has enrolled more than 20 corruption cases and 65 people have been charged, while the nation’s Asset Forfeiture Unit has obtained freezing orders to seize 5.4 billion rand’s worth of assets relating to corruption offenses, he said in his weekly newsletter. In addition, a Special Investigative Unit has recovered 2.6 billion rand in funds and assets and set aside contracts worth 18 billion rand, he said.