Judge Tintswalo Annah Nana Makhubele “sidelined and excluded” the legal department at the Passenger Rail Agency of South Africa (Prasa) from dealing with litigation matters involving corruption-accused company Siyaya DB and the rail agency. This was according to the testimony of Martha Ngoye, the suspended head of Legal, Risk and Compliance at the rail agency.

Ngoye was the second witness to give testimony at the Judicial Conduct Tribunal against Makhubele, the former chairperson of Prasa’s interim board of control. The tribunal entered its third day in Johannesburg on Thursday, after two days of testimony from Gauteng High Court Judge President Dunstan Mlambo.

Activist group #UniteBehind lodged a complaint against Makhubele with the Judicial Service Commission in 2018, and a Judicial Conduct Tribunal was recommended by the Judicial Conduct Committee in March 2020.

#UniteBehind has accused Makhubele of breaching the separation of powers principle, and of improper conduct while she was chairperson of Prasa. They allege that Makhubele negotiated and entered into a confidential settlement agreement with representatives of Siyaya, a corruption-accused company, and sidelined Prasa’s internal legal team.

Visit Daily Maverick’s home page for more news, analysis and investigations

According to Ngoye, Makhubele said that she had been “saddled” with the Siyaya matter and told Ngoye that “anybody that wanted to deal with this matter had to engage with her first”. Ngoye told the tribunal that of all the legal matters that Prasa was dealing with at the time, the Siyaya matter was the only one to which Makhubele dedicated “a lot of time” and attention.

Ngoye explained how the Siyaya matter came to be, saying Prasa received about five summonses from Siyaya and its subsidiary companies, one of which was Siyaya DB Consulting Engineers, in 2015. Contracts with Siyaya and its subsidiaries were the subject of a number of corruption investigations.

“The summonses were dealt with by the legal advisers within group legal [at Prasa] together with the responsible managers within the business units… Once the team was happy that there was merit to defend the summonses, a law firm was appointed and the summonses handed over to the law firm,” she said. The law firm appointed to act on behalf of Prasa at the time was Diale Mogashoa Attorneys.

When Makhubele was appointed as chairperson of the interim board on 19 October 2017, an arbitration process with Siyaya had already been agreed upon, and Prasa believed it had a case to defend. It was also during this time that Siyaya DB applied for liquidation and a section 417 inquiry into its liquidation was under way. Some Prasa employees were called to appear at the inquiry and Prasa’s attorneys, Diale Mogashoa, kept a watching brief, Ngoye told the Tribunal.

Called to a meeting

On 14 November, Ngoye said, she was called to a meeting with Makhubele and Lindikhaya Zide, then acting group chief executive officer of Prasa. Makhubele asked Ngoye why Prasa’s legal team was defending the Siyaya matters rather than opting for a settlement.

“I was a bit startled. We had a good defence as far as these matters are concerned,” said Ngoye.

During the meeting, Makhubele told Ngoye that she had received a report out of “collegiality” that indicated that former and current Prasa employees told the Siyaya DB liquidation inquiry that Prasa did not have a defence against Siyaya’s claims in the ongoing legal matter. Ngoye told the tribunal that the former employees Makhubele mentioned were former group CEO Lucky Montana, former senior manager in supply chain management Maishe Bopape and former chief engineer Daniel Mthimkhulu, who was convicted of fraud last year.

After the meeting, Ngoye said she had not seen the report that Makhubele referenced, so she followed up with Prasa’s attorneys and the employees who allegedly gave concessions to find out what was conceded and how it affected Prasa’s defence. Ngoye told the tribunal that everyone she spoke to, including current Prasa employees that Makhubele had cited, knew nothing of this.

Following a series of emails, memorandums and reports sent between the attorneys, Prasa’s legal department, Makhubele and Zide, Ngoye said she was shocked to learn of an unsigned draft resolution from a board meeting held on 1 December 2017 which, among other things, stated that:

• Ngoye must hand over all litigation files relating to the contract or contractors that followed from corruption investigations to Prasa’s company secretary.
• Management should provide a report to the board on the status of the legal panel and provide reasons why the legal department still used a legal panel that appeared to have expired.
• The legal panel was suspended with immediate effect, and any legal services sought must be procured through the supply chain management process and in consultation with the chairperson of the board, on all matters relating to the investigations only.

Ngoye said she tried to challenge and seek clarity about the unsigned resolution because her department could not address Prasa’s legal matters without a legal panel. She told the tribunal that there was no response from Makhubele.

Ngoye said that after this, Prasa’s Legal, Risk and Compliance team was excluded from the Siyaya matter. But in March 2018, Ngoye and her team heard that Prasa had settled with Siyaya, without consulting them, and that Prasa would soon be making a payment of about R56-million to Siyaya.

Ngoye said that she and Prasa’s general manager for legal services, Fani Dingiswayo, took action, instructing law firm Bowmans “to act on [Prasa’s] behalf and oppose the order” of the settlement. This was done without the support of the board and against the instruction of then acting group CEO Cromet Molepo.

Ngoye said she heard from Dingiswayo that Makhubele had told Siyaya’s lawyers that Ngoye did not “have authority to have briefed Bowmans because Bowmans is not on the panel”. Ngoye said their opposition to the settlement failed because when Bowmans appeared in court on 9 March, the law firm was told it had no authority to appear on behalf of Prasa, despite being in possession of a power of authority from Ngoye.

A public outcry prompted the minister of transport to permit a rescission of the settlement, leading Ngoye to apply for an urgent interdict to stop the payments. This was successful and prevented the payment to Siyaya.

Earlier at the hearing, Judge Seun Moshidi, one of the leaders of the tribunal, said he was concerned that Ngoye was “singing the same song” as the other Prasa witnesses, yet to be called, in making serious allegations against Makhubele using the same evidence. Questioning the need to call the other witnesses, he said, “I am anxious to reach finality on this matter.”

The tribunal continues. DM

First published by GroundUp.