Gama vs Transnet Board

Court smacks down ex-Transnet boss Gama’s bid to get his job back

By Rebecca Davis 22 November 2018

Siyabonga Gama, Chief Executive Officer of Transnet Freight Rail, speaking during 2007 AfricaRail conference which took place in Sandton, on 26 June 2007. Photo: GALLO

In the week when the Zondo Commission heard just how desperate former President Jacob Zuma was to appoint Siyabonga Gama as Transnet boss, the Labour Court has dismissed Gama’s application to be reinstated as CEO. The judgment is scathing both in its language and findings. But Gama should look on the bright side: It frees him up to focus on the R166-million lawsuit he faces from the Transnet board for looting the parastatal.

Siyabonga Gama “cannot show that the [Transnet] board was not entitled to terminate his employment contract,” Labour Court Judge Connie Prinsloo ruled on Thursday.

It is evident, the judge said in her ruling, that the Transnet board had experienced “a breakdown of trust and confidence in him in his capacity as the group chief executive and managing Transnet at the highest level”.

As such, the Transnet board was within its rights to send Gama packing in October 2018 after a six-year tenure as CEO, which saw South Africa’s rail parastatal lose an estimated R35-billion to corruption.

Judge Prinsloo pointed out in her judgment that it was unfeasible that Transnet could reappoint Gama as CEO now, given that the Transnet board is suing Gama personally for the amount of R166 million — paid out as an “undue overpayment” from Regiments Capital.

The judgment effectively tells Gama, in dignified legalese, to get stuffed.

It describes his application as “wholly misguided and meritless”, and says that Gama has “dismally” failed to make his case.

It also notes that Gama’s remuneration while Transnet CEO amounted to a whopping R7,649,343 a year. He was paid this amount for acting as the “brain and nerve centre of the company”, as Judge Prinsloo put it.

But we now know that he was also paid this during the years where Transnet became one of the most shameless looting sites in the entire State Capture saga.

The Zondo Commission heard this week from former Public Enterprises Minister Barbara Hogan that former president Jacob Zuma was absolutely adamant in 2009 that Gama be appointed as Transnet CEO.

This was the case despite the fact that Gama was already mired in allegations of serious misconduct. It was also the case, said Hogan, despite the fact that there was an undeniably superior candidate for the job available in the form of Sipho Maseko. Maseko was a former CEO of BP Africa who surpassed Gama in suitability for the role in every conceivable way except one: Maseko was not the preferred choice of Zuma.

We now know that anyone in the public service whose appointment Jacob Zuma emphatically supported was probably bad news. Gama was appointed despite the objections of Hogan, and what followed was a looting bonanza.

A report released by the Public Affairs Research Institute in late October detailed how Transnet funds were money-laundered to Gupta-linked companies during the Gama years. The #GuptaLeaks emails also revealed that Gama went to Dubai in December 2015 as part of a Gupta jamboree for their patronage network.

The final hangover of Gama’s tenure at the helm of the CEO was the R8-billion in irregular expenditure for the last year that Transnet recorded, resulting in a qualified audit.

Yet when the Transnet board sent Gama his marching orders on 1 October this year, Gama promptly headed to court to argue that the board could not terminate his employment in terms of his contract.

Gama claimed in his initial court papers that he could not be dismissed without “first being afforded the opportunity of stating his case”. Counsel for Transnet contended that the board was within its rights to terminate Gama’s contract as a result of “the information about your conduct [which] has resulted in a loss of trust and confidence by the board in your ability to manage Transnet”.

Gama had argued not just that he should be reinstated as Transnet CEO, but that the Transnet board members be made to pay for Gama’s legal costs in their personal capacity. His lawyer submitted that the board members should cough up rather than Transnet itself, because “taxpayers should not be burdened with the costs in this matter”.

This was one point on which Gama and Judge Prinsloo saw eye to eye.

I agree with [Gama’s lawyer] that the taxpayers should not be burdened with the costs in this application,” ruled Prinsloo — and ordered Gama to pay all legal costs. DM

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