Transnet row gets nastier

[Steve Appleton]

From Sunday Times, Business Times frint page, 6th September 2009:
http://www.thetimes.co.za/Business/Busi ... id=1060904

Transnet row gets nastier
Published:Sep 06, 2009

In charge: Acting CEO Chris Wells is under fire from trade unionists = Picture: Business Day

No word: Former CEO Maria Ramos will not comment on the matter = Picture: Tyrone Arthur

Chosen one: Suspended Transnet executive Siyabonga Gama is the ANC’s preferred candidate for the top job at the parastatal, and is going to court to clear his name = Picture: Alix Carmichele

Sought out: Barbara Hogan has met with angry board members. = Picture: Simphiwe Nkwali

‘Some of us will ensure that he gets the job. It is clear that he has already been judged by the Transnet board. For the board to treat a person who has done so much for Transnet like this is wrong’ — Justice minister Jeff Radebe



By Buddy Naidu and Moipone Malefane

New accusations against former boss Maria Ramos. The bitter leadership battle at Transnet is getting uglier with more allegations surfacing over the parastatal’s R80-billion capital expenditure programme.

It has been a week of high drama for the state-owned logistics giant, with a flurry of accusations being levelled against past and present executives.

Business Times can reveal that:

# Disgruntled board members met public enterprises minister Barbara Hogan late on Friday afternoon;

# Suspended Transnet Freight Rail (TFR) CEO Siyabonga Gama, widely tipped to take over as group CEO, will tomorrow launch an urgent High Court application to challenge his suspension;

# The executive committee of TFR has written to President Jacob Zuma requesting an independent inquiry into the circumstances surrounding Gama’s suspension. This is in addition to staff and management calling on the board to lift Gama’s suspension and appoint him group CEO; and

# Former CEO Maria Ramos has been dragged into the row with revelations that her brother-in-law works for a company that enjoys a R1.2-billion a year contract with Transnet. It has also emerged that, before joining the company more than a year ago, he served as a voting member on Transnet Capital Projects’ powerful national acquisition council, which approves tenders and contracts.

Gama is accused of neglecting his fiduciary duties and flouting the Public Finance Management Act when awarding a R19- million security contract and a contract to build 50 locomotives.

Allegations relating to one contract he oversaw were initially made to the Public Service Commission in November 2007. The public enterprises minister at the time, Alec Erwin, also received complaints prior to September 2008, which he asked Transnet to investigate.

Ramos raised the allegations in her last meeting with the board, in Cape Town on February 12, when the appointment of a new CEO was discussed.

Gama was one of five candidates short- listed by a recruitment company, but the board’s preferred choice at the time was Pravin Gordhan.

Gordhan withdrew his candidature after being told that he would be appointed to Zuma’s cabinet.

The selection process was opened up again, with Ramos’s earlier move effectively dashing Gama’s chances as his was not one of the three names submitted to Hogan for approval.

Former chief financial officer Chris Wells took over from Ramos in an acting capacity in early March and was tasked with dealing with the allegations against Gama.

Since then, the board and Wells have received three independent legal opinions on the matter, and Gama was interviewed by internal auditors.

On Monday last week — almost two years after first receiving the allegations — the Transnet board served Gama with a notice of suspension.

This was two days before the cabinet was supposed to have endorsed him as group CEO.

Gama had been selected by the ANC’s deployment committee to take over as boss and he enjoys the support of executives throughout the group.

This week he broke the silence he has maintained since the leadership tussle began in February. “My conscience is clear. I have done nothing wrong and the courts will clear my name,” he said.

His lawyer, Themba Langa, confirmed that papers would be filed in the High Court tomorrow in a bid to overturn the suspension.

“Their (Transnet’s) case has no merit and we are prepared to prove this in court. In addition, we will also show how the board has been misled by certain individuals regarding my client,” Langa said.

Transnet, meanwhile, has denied any conflict of interest relating to Ramos and the tender granted in 2005 to Hatch Mott McDonald Goba (HMG), for which her brother- in-law works.

“After inquiring from (HMG), we would like to confirm that (he) is employed in the engineering procurement department,” said Transnet spokesman John Dludlu.

Dludlu said HMG is an international engineering and project management consultancy and that Ramos’s relative is merely a “salaried employee” who “joined just over a year ago from Hatch Africa and therefore played no role in HMG’s appointment”.

He said: “We reject insinuations that there is or was a conflict of interest between him and the former chief executive of Transnet.”

The company’s contract ends in December 2010 and it has also been at the centre of allegations that it has over-billed Transnet.

In one complaint, a manager claimed that despite a budget of R110000 for project management carried out by HMG in the 2008/09 financial year, actual costs received were about R630000 a month.

Said Dludlu: “The company is not under any investigation. We are unaware of any reasons that would justify these. Also, as we have said in the past, we’re happy with the value they have added.”

Ramos is now CEO of Absa, but bank spokesman Patrick Wadula said she could not comment. “Please note that Maria Ramos reserves her rights on this matter.”

Last week, justice minister Jeff Radebe told Business Times there was a conspiracy against Gama.

“Some of us will ensure that he gets the job. It is clear that he has already been judged by the Transnet board. For the board to treat a person who has done so much for Transnet like this is wrong,” said Radebe.

Transnet’s board would not comment on the matter, saying it was an internal issue.

On Wednesday, the SA Transport and Allied Workers’ Union accused Ramos of being part of a conspiracy to oust Gama.

Said general secretary Randall Howard: “We have been reliably informed that the Carlton Centre (Transnet’s headquarters) cabal is determined to make sure Gama isn’t promoted... the cabal, which is led by acting Transnet CEO Chris Wells, also has direct ties with Maria Ramos, Transnet’s former CEO.”

ANC spokesman Brian Sokutu said Gama remains the party’s preferred candidate for the position.