Pravin fires remnants of old Transnet board, brings in Popo Molefe to clean mess

JOHANNESBURG — I first became aware of the massive problems at Transnet when I spent hours talking to a whistleblower about the company’s controversial use of McKinsey and how the consulting firm allegedly bled the state-owned rail operator of millions of rands. But as the year 2017 progressed, more problems started to surface such as allegations around the Guptas receiving kickbacks for connecting software firm SAP with lucrative Transnet deals. In 2017, Transnet also tasked law firm Werksmans with probing allegations of impropriety linked to procurements from General Electric, Bombardier Transport, China South Rail and China North Rail. The final results of that probe recommended that disciplinary action must be taken against individuals in the report and that law-enforcement agencies should get involved. Transnet, earlier this year, then dismissed the findings contained in the report. But that has come back to bite the company with the latest clean sweep by Pravin Gordhan, who recently also replaced the Denel board. There are many more problems that Transnet faces and untangling them will take a Herculean effort. Transnet, in many respects, has been at the centre of the web that was state capture and corruption under the Zuma years. – Gareth van Zyl

Media statement by the Department of Public Enterprises:

In terms of the requirements of the Companies Act and having carefully considered representations by the remaining Transnet directors, Mr. Seth Radebe, Ms. Potso Mathekga and Mr. Zainul Nagdee concerning their retention on the new board, Minister Pravin Gordhan has decided to remove them as non-executive directors with immediate effect.

The Minister has appointed a new interim board, pending a full appointment, in consultation with Cabinet. The Interim board comprises of:

  1. Mr. Popo Molefe as chairperson
  2. Mr. Louis Zeuner
  3. Ms. Ramasela Ganda
  4. Ms. Ursula Fikelepi
  5. Mr. Edward Kieswetter.
  6. Ms. Dimakatso Matshoga

“Transnet is facing serious allegations of maladministration and corruption. The previous board has not demonstrated appreciation of the seriousness of issues at hand or the ability to deal with these decisively in order to protect the entity in the interest of South Africans,” said Gordhan.

Public Enterprises Minister Pravin Gordhan. Photographer: Waldo Swiegers/Bloomberg

“We have to hold directors of SOCs to a high standard of corporate governance and accountability and to protect the assets of the State.”

The Minister is confident that the new interim board has the capacity to provide the kind of corporate governance needed during this period and to provide stability and certainty.

About the new board members

Popo Molefe serves as Executive Chairperson of Lereko Investments (Pty) Ltd. He is a former Non-Executive Director of Armaments Corporation of South Africa (ARMSCOR), the Central Energy Fund (CEF) and the Strategic Fuel Fund and the former Chairperson of the Passenger Rail Agency of South Africa (PRASA). Mr Molefe has been the Chairperson of Morvest Business Group Limited since July 2004. He served as Non-Executive Director of Petroleum, Oil and Gas Corporation of South Africa (Pty) Ltd (PETROSA). His leadership expertise, knowledge of transport and logistics, mineral resources and diverse industries are expected to add value to the Board.

Louis von Zeuner obtained a Bachelor of Economics (BEcom) from the University of Stellenbosch in 1987. He is the former Deputy Group Chief Executive for ABSA Group Limited, having spent 31 years with the ABSA Group from 1981 to 2012 where he held several executive positions including Group Executive Director and Managing Director. His skills in investment, financial management, auditing, risk management and leadership are expected to add value to the Board.

Dimakatso Cathrine Matshoga obtained a Master of Business Administration (MBA) from Management College of South Africa in 2011, a Postgraduate Diploma in Project Management from the School of Project Management in 2005 and BSc Electronic Engineering from University of Natal in 2002. Ms Matshoga is currently the Managing Executive & Principal Consultant at Atafala Consulting. Her skills in engineering and project management, strategy, rail transport are expected to add value to the Board.

Ramasela Joyce Ganda is a qualified Chartered Accountant (South Africa). She obtained a B.Com (Hons) Degree from the University of Pretoria, in 1996 and B.Com Degree from Vista University in 1994. She is currently the Executive Head of Business Services of Barloworld Equipment. Prior to this, Ms Ganda was the Chief Financial Officer of BroadBand Infraco. Her skills in finance, manufacturing, auditing and risk management are expected to add value to the Board.

Edward Kieswetter holds an Executive MBA (Strategic & Transformation), M.Com (SA and International Tax), M.Ed (Cognitive Development), B.Ed (Mathematics and Science), HDE (Engineering Education) and NHDip (Electricity Engineering). He recently recently retired from Alexander Forbes, as Group Chief Executive fro 2010 to 2016. He is the former Deputy Commissioner of the South African Revenue Services (SARS) His skills and expertise in the public and private sectors, financial business management and leadership
are expected to add value to the Board.

Ursula Nobulali Fikelepi obtained a Master of Business Administration (MBA) from GIBS in 2010, LLM from University of New Hampshire, USA in 2001, LLB from University of Cape Town in 1997 and BA, Law from Rhodes University in 1994. She is an Attorney of the High Court of South Africa since February 2000. Fikelepi is currently a consultant at Phukubje Pierce Masithela Attorneys. Prior to this, Ms Fikelepi served as General Manager: Legal, Risk and Compliance at South African Airways (SAA) between 2013 and 2017 and has also been a Deputy Director General at the Department of Public Enterprises. Her skills in corporate legal and regulatory, mergers and acquistions are expected to add value to the Board.

OUTA media statement:

OUTA welcomes and congratulates the new board of Transnet under the leadership of Popo Molefe.

Molefe has a proven track record of tackling corruption head on and this is what Transnet needs now, fearless and strong leadership to identify and root out corruption and maladministration in this critical component of our economy.

“We want to commend this bold and courageous move by Minister Pravin Gordhan in this mission of fixing the ailing state-owned companies. These companies are supposed to be drivers of the economy and not a burden carried by South African taxpayers. To date we have seen decisive action at Eskom, Denel and now Transnet.  We are eagerly awaiting announcements on SA Express, SAFCOL and Alexkor,” says Rudie Heyneke, OUTA Portfolio Manager for Transport.

Railway workers walk across train tracks past a locomotive operated by Transnet SOC Ltd. at the company’s rail depot in Ermelo. Photographer: Dean Hutton/Bloomberg

The outgoing Transnet board under chairmanship of Linda Mabaso was for the last couple of years in the news for all the wrong reasons. The 1 064 locomotive and the harbour crane deal were symptoms of a company in the grip of corruption and state capture.  The new board should also take a stance in the case brought by Transnet pensioners in their quest to get answers on decisions made on the Transnet Pension Funds more than a decade ago.

“The appointment of Popo Molefe and the new board members was long overdue and OUTA believes that the corruption clean-up at Transnet will now start with urgency.  The new board consist of experienced and skilled individuals who proved their worth in the past at various companies and organisations. Minister Gordhan once again showed that he prefers to populate the state-owned entities’ boards with business, finance, legal and technical experts, rather than to be ‘politically correct’,” says Heyneke.

Molefe has in the past condemned corruption at SOEs and spoke out against looting there.

OUTA has full confidence in Molefe’s leadership and will assist the new board in their clean-up of Transnet. This once-productive SOE should be free of corruption, dubious transactions and maladministration.

OUTA wishes the new board members a very successful tenure.