Eye-watering and systematic looting at Transnet – DA’s Ghaleb Cachalia

The Gupta family and their cronies were able to steal at least R41.2bn from their dealings with Transnet. DA Shadow Minister of Public Enterprises Ghaleb Cachalia reflects on the grand-scale looting exposed at the state-owned entity in Zondo’s second report. – Sharidyn Rogers

Ghaleb Cachalia on significant evidence that points to eye-watering and systematic looting by the Guptas dealings with Transnet

I have scanned the 500 pages. Zondo says in summation that the systematic capture scheme aimed at securing illegal and corrupt control of the decision-making took place. I concur with that, given the evidence that was presented. The details of the evidentiary declarations are new and revealing. This was informed by considerable work done by investigative journalists in the past. If you take the sum total of the evidence from the investigative journalists, plus the evidence that Zondo details in his report and the addition in the footnotes of the various bundles of evidentiary material which were made available, it is a significant body of evidence that points to eye-watering and systematic looting that took place over a period of time at the behest of certain people in government and through the agency of certain people. What is to be done with this is the question. We have been told the NPA has put together a 15-person team to deal with various aspects of this and to effect prosecutions. The problem is how is this team going to be a resource, what powers will they have and how is this going to be taken forward? In order to resource a team of this kind properly, it has to be funded, there has to be security in place for this team. There needs to be a matrix, there needs to be a mapping of what went on that identifies evidentiary strengths and gaps in the process. That has to be cross-referenced against potential prosecutory transgressions. If that takes place – it needs to take place – then we may have something to go forward. Otherwise, it will be the continual drip of prosecutions here and there and would result in these expensive commissions, a waste of money.

On the prospects of successful prosecution

We must be rigorous and the authorities who are looking at this need to take a view as to what is prosecutable and what would potentially result in success. There are a host of people, as you say, it goes beyond the usual suspects – Jeff Radebe, Siphiwe Nyanda, Siyabonga Gama, Salim Essa – the list goes on. Lynne Brown needs to be held to account in no uncertain terms. Racketeering, as I understand it, is not part and parcel of our legal prosecution environment but there is a case to be made for collusion. And if there is a case to be made for collusion that speaks to racketeering, money laundering, fraud and theft, then in that collusion bundle, there may be merit in taking it forward. Apart from that, measures must be put in place to ensure this does not continue because, in both Eskom and Transnet, the procurement regime still holds the command-and-control mechanisms that the current government is so fond of and is largely responsible for the shield under which all of this operated hitherto. Then there is the question of the deployment committee of the ANC and its role and culpability in all this. These are all various aspects, the dots have to be connected in no uncertain fashion and something has to be done about it retrospectively. That requires a level of transparency the government has yet to embrace in almost 30 years of existence.

On how boards are supposed to operate           

We have a template and an understanding of how boards operate in the private sector. That is governance by documentation, reports, practices and procedures. We don’t have the same rigour in the public sector, and it is made up as it goes along. When we say the aspects of the Companies Act and the governance that applies there needs to be applied to the public sector, it has been met with some resistance in the past. It is because it was not dealt with in this manner. We have opened ourselves up to this malfeasance, mismanagement and corruption that has occurred. Wait until the quantum of madness in Eskom is exposed and then we will understand exactly how these public entities – which are supposed to provide public goods – have failed. In Transnet, for example, there is a master plan to improve the ports. There is a private sector involvement that is being looked at in terms of the operation of the ports, while the ownership remains within state hands. We need to know who those private sector entities are that are courting Transnet. What governance exists to ensure these are not politically connected people. I get calls every day to say X is involved and why X is doing this. That will be scotched if there is transparency to expose those entities.

On hiring in-house consultants to render services across government and state-owned entities

If you hire intelligently and create in-house capacity to deal with these things, it is desirable. You cannot exclude consultants entirely. There is a role for in-house consulting. However, if you have an in-house consulting unit, it’s expensive and you have to have it there long term. There are all kinds of HR implications involved in terms of pensions, ongoing salaries, etc. That has to be looked at against hiring consultants on a short-term basis to come in and do a specific job; the best brains in the world dedicated to deliver something absolutely finite and proper. But then you open the door to it being undone by others who are unscrupulous, as Bain was in this particular instance. Mr Masone has gone back to Italy and is now running an operation, is a partner and vice president of another consultancy that has offices in South Africa. So, he’s just gone from one to another.

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