DAYS OF ZONDO
Ex-Transnet CEO Brian Molefe claims he was simply ‘a foot soldier’ and fires salvo of criticism at commission
There was nothing suspicious about paying a security company owned by General Siphiwe Nyanda R20-million to settle a dispute over work performed, and the R100-million Transnet paid to sponsor The New Age business breakfasts was value for money, former Transnet CEO Brian Molefe told the State Capture Commission.
Appearing before the Commission of Inquiry into State Capture on Thursday evening, following President Cyril Ramaphosa’s second day of testimony before Deputy Chief Justice Raymond Zondo, Molefe peppered his replies to evidence leader advocate Anton Myburgh SC with veiled aspersions against the commission, and suggestions it was picking one side of a fight.
Molefe began by pouncing on a correction Myburgh read into the record. Before leading evidence, Myburgh stated that when Molefe appeared before the commission on a previous occasion, he had referred to an affidavit which made allegations that Molefe made questionable decisions in order to benefit a particular company that was partly owned by Gupta dealmaker and associate Salim Essa. Lawyers acting on behalf of the company had alerted the team that this was an error, as Essa had no ownership in the company, thus Myburgh undertook to correct the record.
Molefe immediately appealed to Justice Zondo, saying this “underscores the problem” that he was expected to answer questions related to matters he was not involved in, and comment on conversations that happened in his absence.
It was a “problem” Molefe raised a number of times during the three-hour evening session.
Following further complaints by Molefe about receiving thick piles of documents the night before appearing at the commission, Myburgh questioned him about payments made to Abalozi Security Risk Advisory Services when Molefe was CEO at Transnet.
Abalozi was owned by former communications minister Siphiwe Nyanda and had its contract terminated by Transnet following an investigation that determined it had not deployed security guards as per its agreement. There followed a series of lawsuits and counter-lawsuits, but what Myburgh drilled into was why Molefe authorised a R20-million settlement with Abalozi when the security company’s claim was that Transnet owed it R1.4-billion. Of Abalozi’s claim, R700-million was for “pain and suffering caused by defamation”, according to Myburgh.
Reading from Molefe’s affidavit, he stated that in the latter half of 2014 Abalozi had claims amounting to R1.4-billion, but proposed a settlement of R40-million. Then, in January 2015, Molefe offered R20-million for full and final settlement of all claims and costs against Transnet, which was accepted.
Molefe insisted he believed this was a good deal especially as he was convinced Transnet had been at fault, and furthermore he was sure, although he could not produce evidence for his assertion, that he acted under advice from Transnet’s legal department.
“As I understand it, it wasn’t a matter of you getting legal advice, it was a matter of you saying, well, it seems that they’re suing us for R1.4-billion, so R20-million is a bargain,” stated Myburgh. This led to an interjection from Molefe’s legal representative, advocate Thabani Masuku, that Molefe had explained he had received legal advice and had made the settlement for business reasons.
Zondo, however, reiterated that it was “suspicious” that Abalozi would be willing to settle for a fraction of its claim, which suggested its claim was highly inflated. As CEO, Molefe should have done his homework, he said, as it was possible Abalozi had no legal claim at all.
Myburgh moved on to Transnet’s sponsorship of the business breakfasts hosted by the now defunct Gupta-owned The New Age newspaper.
The New Age business breakfasts, which were broadcast by the SABC, were lavish sit-down affairs in which ministers would be interviewed about their portfolios.
Starting in 2011, the same year when Molefe began his tenure as Transnet CEO, Transnet sponsored 10 of these breakfasts on an ad hoc basis, for just under R1.2-million per breakfast.
Then between 2012 and 2017, five contracts were concluded, adding up to Transnet sponsoring a further 91 breakfasts at R1.1-million per breakfast.
The thing with the media is they control the dominant ideas in society, and they are very negative, and they continue to be very negative. And, therefore, the predominant idea, predominant feeling in South Africa, is a negative one.
Molefe said he believed the exposure afforded to Transnet from the Transnet logo visible at the breakfasts was value for money.
He went on to criticise the media for not exposing the good that was being done in the country, which is what the New Age breakfasts did by giving “key newsmakers” an opportunity to “talk about what they were doing”.
“The thing with the media is they control the dominant ideas in society, and they are very negative, and they continue to be very negative. And, therefore, the predominant idea, predominant feeling in South Africa, is a negative one.”
By contrast, he said, the positive contributions discussed at the New Age breakfasts were aired, “even by other news channels”.
Zondo was not convinced that Transnet’s sponsorship of the New Age breakfasts was money well spent, as it was not necessary for Transnet to brand itself to the layperson in order to sell its services.
Myburgh noted that when Molefe signed a R16-million sponsorship agreement on 23 March 2012, the amount was within his delegation of authority to sign off on deals up to R30-million. However, a month later, on 25 April 2012, the board reduced the CEO’s delegation of authority to R10-million. The next New Age breakfast deal Molefe signed off, for R15-million on 4 April 2013, was no longer labelled as a sponsorship but a “partnership”. This meant it changed to a standard contract financed through the department’s budget which he would have been able to approve.
Molefe avoided a direct answer to the question of whether the alteration was a deliberate attempt to continue to provide money to the Gupta enterprise by requesting he be given time to properly consider the matter and submit an affidavit. However, he insisted sponsorship of the New Age breakfasts was “a marketing thing” to create positive associations with the Transnet brand.
Zondo then gave Masuku a chance to cross-examine his client, which was a thinly veiled opportunity for Molefe to plead that he was simply “a foot soldier” in the trenches being criticised for decisions he had to make “in the heat of battle”. He also criticised the commission for choosing “a particular narrative and a family” while ignoring others, such as the Ruperts, who he claimed were in possession of Pierneef paintings worth millions that had been commissioned by Transnet in the 1930s.
Zondo reminded him that the commission came about as a result of a report by former Public Protector Thuli Madonsela which stated that the relationship between the Guptas, former president Jacob Zuma and the executive needed to be investigated.
Zondo reminded Molefe that in 2018 he had invited anyone with information that falls within the terms of reference to bring it to the commission.
To this, Molefe said: “Would you have investigated it, Chair?”
Zondo replied: “Well, if you had brought it to us and we didn’t, you would have a better case.”
The commission continues today with former Transnet CEO Siyabonga Gama, who was appointed after Molefe, appearing from 10am. DM