News / National
What Zondo's Commission did not want South Africa to know
30 Jan 2023 at 02:37hrs | Views
An explosive affidavit that turned the state capture narrative on its head never made it to the final report of the state capture commission of inquiry or was even considered by Chief Justice Raymond Zondo.
The damning contents may explain why Iqbal Sharma, widely regarded as a Gupta lieutenant, never appeared before the state capture commission of inquiry. No findings were made against him either. The commission's lead investigator had received the almost 1000-page affidavit with concrete evidence attached. However, none of the Zondo commission reports covered the document.
The document implicates President Cyril Ramaphosa, Thuli Madonsela, Maria Ramos and Transnet board members from 2006/7, Trevor Manuel, Pravin Gordhan, Gill Marcus, Moira Moses, Mafika Mkhwanazi, the late Don Mkhwanazi and SA Shipyards, Doris Tshepe, Brian Joffe and the 2006/7 Bidvest board, Sybrand Pretorious, Pradeep Maharaj, and Chris Wells.
The document has since landed in the public domain as part of Sharma's defence of fraud charges in the Bloemfontein high court. As Sharma alleged, Transnet favoured one company to win tenders, Bidvest and Transnet may have committed fraud, and Transnet and the Public Protector's office conspired to squash and not implement the forensic report initiated by Madonsela.
He was Transnet's director from December 2010 to October 2014. He served on the Board Acquisitions and Disposals Committee (BADC) and the Corporate Governance Committee. In August 2012, he became head of the BADC.
"In the course of my work as a Director, my colleagues and I came across certain matters of impropriety and malfeasance that needed further investigation. We also came across matters which could be loosely described as 'cover-ups'," Sharma told the Zondo commission.
Sharma covered three Transnet transactions in his affidavit, namely the Tugboat tender, Viamax disposal, and the Public Protector/KPMG investigation.
"Though I was invited then ignored in respect of having an opportunity to support the Commission in its efforts, I stand ready, willing and able to assist with my disclosures about my time at Transnet," he said.
THE BIDVEST MASTERCLASS IN RENT-SEEKING
Sharma said that Transnet sold assets to Bidvest for R1bn and purchased the same services back from Bidvest for R2,5bn. The 2007 transaction involved Transnet's disposal of an entity called Viamax to Bidvest, at the time chaired by Ramaphosa. Viamax managed Transnet's fleet of vehicles.
The deal, signed under Ramos, was announced in March 2007. It later turned out that Bidvest had also secured the exclusive right to manage Transnet's fleet for five years as part of the agreement.
According to Sharma, the additional sweetener was never put to tender or offered to other bidders during disposal. He said Transnet circumvented the public finance management act by giving the appearance that Viamax ceded the fleet service management contract to Bidvest as part of the share acquisition.
"A disposal is a single transaction and procurement of services is a separate and distinctly different transaction within organs of State. Bidvest managed to get a 5-year contract that had never been tendered and potentially locked them in for up to 12 years. This necessitated a further investigation as to how Transnet could be so prejudiced," he said.
Both agreements were signed on the same day in July 2007. Sharma added that in 2011, Transnet executives presented a set of contracts to the BADC that would expire in 2012 and had to be tendered. There was a new tender for fleet services worth around R3 billion. Information that 'only a small portion of the total budgeted spend could be tendered as the incumbent was locked in,' did not make sense to him, and he started asking more questions, he said.
According to the minutes of a BADC meeting dated 26 January 2012, held at the Carlton Centre in Johannesburg, 'it was recommended that a forensic investigation into the Viamax disposal process be sought'.
Transnet management informed the committee that an update would be presented. This eventually took place during another meeting on 31 January 2012 at the SANTe Winelands Hotel in Franschhoek in the Western Cape.
The records of the meeting showed that 'the BADC agreed that a Steering Committee is established to deliberate on the revised terms of reference for the Forensic Investigation: Review of the Sale of Viamax to Bidvest as a matter of urgency'.
Sharma says "efforts to investigate found a dead end as the appointed committee members failed to meet without explanation. Transnet Internal Audit also claimed, in a document dated 31 May 2012, that no documents, correspondence or emails relating to the transaction could be found".
The information is contained in the memorandum to the then GCE Brian Molefe, where Transnet Internal Audit stated that as part of the lessons learnt from the Viamax deal, Transnet should ensure that 'documentation is retained and maintained safely for record-keeping and audit trail purposes'. Molefe noted the recommendations, including that the document could be circulated to members of the BADC.
It also turned out that the Viamax services deal was signed by Pradeep Maharaj, an HR executive, who had mysteriously been delegated authority without Molefe's knowledge. Maharaj signed the contract on behalf of Viamax and Wells (CFO) signed on behalf of Transnet. Moses was then the chairperson of Viamax.
Maharaj and Chris Wells both resigned from Transnet when questions about Viamax started to be raised, says Sharma. He says Maharaj left Transnet and joined Ramos at Absa 'before a special position was created for him in 2012 at the Reserve Bank as Chief Operating Officer,' and 'there is no evidence that this position was advertised on a competitive basis'.
He added that Ramaphosa was a director and chairperson of Bidvest during the Viamax deal. Other notable board members of Bidvest were Joffe, Marcus, Adv Nazeer Cassim, and Stephen Koseff. "These members should have been well versed in the tender processes of the State," said Sharma.
ET TU THULI
Sharma said that in December 2010, Madonsela received a 2009 complaint by the then Chairperson of the Portfolio Committee on Public Enterprises, Vytjie Mentor (now late), alleging tender irregularities and abuse of power at Transnet. After the allegations were published in the media, Transnet on 17 September 2009 issued a statement denying the claims and subsequently held a media briefing on 4 December 2009.
In January 2012 a forensic report on the matter was completed, containing recommendations, among other things, that charges be laid with the SAPS.
"Yet no action was taken against people identified in the report. On the contrary, they were allowed to resign and move on to gainful employment in other organs of State". He said one of the implicated people was Moses.
Sharma said that Madonsela, on her part, also did not act on the report that she had initiated. "The Public Protector's office has no record of any such investigation ever being conducted, which points to a complete scrubbing of any communication or evidence related to the investigation and its report by the previous Public Protector," Sharma said.
He said the Public Enterprises portfolio committee had also been silent and Mentor never referred to this either in her testimony to the Commission as one of its very first witnesses. However, he said it was 'very intriguing' that an evidence leader at the commission, Adv Anton Myburgh, referred to this very report that neither Madonsela nor Transnet disclosed to the public.
TUG BOATS TENDER
Sharma said that at the end of 2010, Transnet chairperson Mafika Mkhwanazi appointed Don Mkhwanazi to lead the BADC committee. Sharma was then a member of the committee, as well as a member of the Corporate Governance Committee. Around mid-2011, he says, the committee considered a tender for 'Tug Boats' and Don Mkhwanazi's company SA Shipyards was a bidder.
"Though during a meeting of the BADC, Don Mkhwanazi recused himself when the matter was being discussed, he did receive the minutes by way of email and again in the pack for the Board meeting," said Sharma.
After he raised a question about this conflict, the tender was eventually withdrawn as a non-award and re-issued, 'making certain board members unhappy'. Don Mkhwanazi was removed from the board around June 2012.
'The same tender got underway and in September 2012, SA Shipyards was proposed to the BADC as the winner'. But in the document pack provided to all committee members, Sharma 'picked up a notation from the Transnet finance department raising concern about the winning bidder's ability to continue as a going concern'.
"It appeared that the company owed Transnet R18m in back rent for a number of years and that Transnet had cancelled the lease. This was an obvious red flag and I raised it, asking how the company had failed to pay rent for so many years and why had Transnet not acted? Further, how would it be possible for the company to execute the tender if they had no premises? This position was again met with resistance from fellow board members".
At a meeting on 22 October 2012, he says, the BADC resolved to appoint an external auditor to evaluate whether the bid had been tainted and if SA Shipyards had been favoured. However, a committee meeting chaired by Tshepe in November 2012, without the forensic investigation being concluded, awarded the bid to SA Shipyards.
Sharma says the external forensic investigation was concluded in June 2013 but the findings were never addressed.
"The report showed that Transnet favoured SA Shipyards".
In 2019, The Sunday Independent reported that the Public Protector's office was investigating the disappearance of the records of an investigation which implicated Gordhan and Ramos. The investigation was conducted by Madonsela, who had investigated alleged tender irregularities and abuse of power at Transnet in 2009.
The probe covered claims that former Transnet chief executive Siyabonga Gama was smeared and charged a few days before the Cabinet was expected to announce Ramos's replacement.
Gama was competing with Gordhan for the position of Transnet boss before he was charged with misconduct in 2007. The complaint was lodged by Mentor on December 3, 2009.
At the time, former Public Protector spokesperson Oupa Segalwe confirmed that Madonsela's report on the matter could not be found in their system. The Sunday Independent has seen evidence that Madonsela did investigate the matter.
In a letter dated December 22, 2010, she wrote to the then Transnet chairperson, Mafika Mkwanazi, detailing the complaint her office had received and asked for further information from the organisation.
Madonsela's office had requested the following from Transnet:
- All minutes of board meetings wherein the appointment of the successor to Ms Maria Ramos as group chief was discussed;
- All minutes of board meetings where Mr Gama's disciplinary hearing was discussed;
- A profile of disciplinary hearings against executives who exceed their financial limits in relation to tenders
- Whether the condonation practice referred to in item (iv) above exists within Transnet and a profile of such condonations
- Whether there was currently within the employ of Transnet a person called Sipho Dube, who might shed light on an aspect of the public protector's investigation.
The damning contents may explain why Iqbal Sharma, widely regarded as a Gupta lieutenant, never appeared before the state capture commission of inquiry. No findings were made against him either. The commission's lead investigator had received the almost 1000-page affidavit with concrete evidence attached. However, none of the Zondo commission reports covered the document.
The document implicates President Cyril Ramaphosa, Thuli Madonsela, Maria Ramos and Transnet board members from 2006/7, Trevor Manuel, Pravin Gordhan, Gill Marcus, Moira Moses, Mafika Mkhwanazi, the late Don Mkhwanazi and SA Shipyards, Doris Tshepe, Brian Joffe and the 2006/7 Bidvest board, Sybrand Pretorious, Pradeep Maharaj, and Chris Wells.
The document has since landed in the public domain as part of Sharma's defence of fraud charges in the Bloemfontein high court. As Sharma alleged, Transnet favoured one company to win tenders, Bidvest and Transnet may have committed fraud, and Transnet and the Public Protector's office conspired to squash and not implement the forensic report initiated by Madonsela.
He was Transnet's director from December 2010 to October 2014. He served on the Board Acquisitions and Disposals Committee (BADC) and the Corporate Governance Committee. In August 2012, he became head of the BADC.
"In the course of my work as a Director, my colleagues and I came across certain matters of impropriety and malfeasance that needed further investigation. We also came across matters which could be loosely described as 'cover-ups'," Sharma told the Zondo commission.
Sharma covered three Transnet transactions in his affidavit, namely the Tugboat tender, Viamax disposal, and the Public Protector/KPMG investigation.
"Though I was invited then ignored in respect of having an opportunity to support the Commission in its efforts, I stand ready, willing and able to assist with my disclosures about my time at Transnet," he said.
THE BIDVEST MASTERCLASS IN RENT-SEEKING
Sharma said that Transnet sold assets to Bidvest for R1bn and purchased the same services back from Bidvest for R2,5bn. The 2007 transaction involved Transnet's disposal of an entity called Viamax to Bidvest, at the time chaired by Ramaphosa. Viamax managed Transnet's fleet of vehicles.
The deal, signed under Ramos, was announced in March 2007. It later turned out that Bidvest had also secured the exclusive right to manage Transnet's fleet for five years as part of the agreement.
According to Sharma, the additional sweetener was never put to tender or offered to other bidders during disposal. He said Transnet circumvented the public finance management act by giving the appearance that Viamax ceded the fleet service management contract to Bidvest as part of the share acquisition.
"A disposal is a single transaction and procurement of services is a separate and distinctly different transaction within organs of State. Bidvest managed to get a 5-year contract that had never been tendered and potentially locked them in for up to 12 years. This necessitated a further investigation as to how Transnet could be so prejudiced," he said.
Both agreements were signed on the same day in July 2007. Sharma added that in 2011, Transnet executives presented a set of contracts to the BADC that would expire in 2012 and had to be tendered. There was a new tender for fleet services worth around R3 billion. Information that 'only a small portion of the total budgeted spend could be tendered as the incumbent was locked in,' did not make sense to him, and he started asking more questions, he said.
According to the minutes of a BADC meeting dated 26 January 2012, held at the Carlton Centre in Johannesburg, 'it was recommended that a forensic investigation into the Viamax disposal process be sought'.
Transnet management informed the committee that an update would be presented. This eventually took place during another meeting on 31 January 2012 at the SANTe Winelands Hotel in Franschhoek in the Western Cape.
The records of the meeting showed that 'the BADC agreed that a Steering Committee is established to deliberate on the revised terms of reference for the Forensic Investigation: Review of the Sale of Viamax to Bidvest as a matter of urgency'.
Sharma says "efforts to investigate found a dead end as the appointed committee members failed to meet without explanation. Transnet Internal Audit also claimed, in a document dated 31 May 2012, that no documents, correspondence or emails relating to the transaction could be found".
The information is contained in the memorandum to the then GCE Brian Molefe, where Transnet Internal Audit stated that as part of the lessons learnt from the Viamax deal, Transnet should ensure that 'documentation is retained and maintained safely for record-keeping and audit trail purposes'. Molefe noted the recommendations, including that the document could be circulated to members of the BADC.
It also turned out that the Viamax services deal was signed by Pradeep Maharaj, an HR executive, who had mysteriously been delegated authority without Molefe's knowledge. Maharaj signed the contract on behalf of Viamax and Wells (CFO) signed on behalf of Transnet. Moses was then the chairperson of Viamax.
Maharaj and Chris Wells both resigned from Transnet when questions about Viamax started to be raised, says Sharma. He says Maharaj left Transnet and joined Ramos at Absa 'before a special position was created for him in 2012 at the Reserve Bank as Chief Operating Officer,' and 'there is no evidence that this position was advertised on a competitive basis'.
He added that Ramaphosa was a director and chairperson of Bidvest during the Viamax deal. Other notable board members of Bidvest were Joffe, Marcus, Adv Nazeer Cassim, and Stephen Koseff. "These members should have been well versed in the tender processes of the State," said Sharma.
ET TU THULI
Sharma said that in December 2010, Madonsela received a 2009 complaint by the then Chairperson of the Portfolio Committee on Public Enterprises, Vytjie Mentor (now late), alleging tender irregularities and abuse of power at Transnet. After the allegations were published in the media, Transnet on 17 September 2009 issued a statement denying the claims and subsequently held a media briefing on 4 December 2009.
In January 2012 a forensic report on the matter was completed, containing recommendations, among other things, that charges be laid with the SAPS.
"Yet no action was taken against people identified in the report. On the contrary, they were allowed to resign and move on to gainful employment in other organs of State". He said one of the implicated people was Moses.
Sharma said that Madonsela, on her part, also did not act on the report that she had initiated. "The Public Protector's office has no record of any such investigation ever being conducted, which points to a complete scrubbing of any communication or evidence related to the investigation and its report by the previous Public Protector," Sharma said.
He said the Public Enterprises portfolio committee had also been silent and Mentor never referred to this either in her testimony to the Commission as one of its very first witnesses. However, he said it was 'very intriguing' that an evidence leader at the commission, Adv Anton Myburgh, referred to this very report that neither Madonsela nor Transnet disclosed to the public.
TUG BOATS TENDER
Sharma said that at the end of 2010, Transnet chairperson Mafika Mkhwanazi appointed Don Mkhwanazi to lead the BADC committee. Sharma was then a member of the committee, as well as a member of the Corporate Governance Committee. Around mid-2011, he says, the committee considered a tender for 'Tug Boats' and Don Mkhwanazi's company SA Shipyards was a bidder.
"Though during a meeting of the BADC, Don Mkhwanazi recused himself when the matter was being discussed, he did receive the minutes by way of email and again in the pack for the Board meeting," said Sharma.
After he raised a question about this conflict, the tender was eventually withdrawn as a non-award and re-issued, 'making certain board members unhappy'. Don Mkhwanazi was removed from the board around June 2012.
'The same tender got underway and in September 2012, SA Shipyards was proposed to the BADC as the winner'. But in the document pack provided to all committee members, Sharma 'picked up a notation from the Transnet finance department raising concern about the winning bidder's ability to continue as a going concern'.
"It appeared that the company owed Transnet R18m in back rent for a number of years and that Transnet had cancelled the lease. This was an obvious red flag and I raised it, asking how the company had failed to pay rent for so many years and why had Transnet not acted? Further, how would it be possible for the company to execute the tender if they had no premises? This position was again met with resistance from fellow board members".
At a meeting on 22 October 2012, he says, the BADC resolved to appoint an external auditor to evaluate whether the bid had been tainted and if SA Shipyards had been favoured. However, a committee meeting chaired by Tshepe in November 2012, without the forensic investigation being concluded, awarded the bid to SA Shipyards.
Sharma says the external forensic investigation was concluded in June 2013 but the findings were never addressed.
"The report showed that Transnet favoured SA Shipyards".
In 2019, The Sunday Independent reported that the Public Protector's office was investigating the disappearance of the records of an investigation which implicated Gordhan and Ramos. The investigation was conducted by Madonsela, who had investigated alleged tender irregularities and abuse of power at Transnet in 2009.
The probe covered claims that former Transnet chief executive Siyabonga Gama was smeared and charged a few days before the Cabinet was expected to announce Ramos's replacement.
Gama was competing with Gordhan for the position of Transnet boss before he was charged with misconduct in 2007. The complaint was lodged by Mentor on December 3, 2009.
At the time, former Public Protector spokesperson Oupa Segalwe confirmed that Madonsela's report on the matter could not be found in their system. The Sunday Independent has seen evidence that Madonsela did investigate the matter.
In a letter dated December 22, 2010, she wrote to the then Transnet chairperson, Mafika Mkwanazi, detailing the complaint her office had received and asked for further information from the organisation.
Madonsela's office had requested the following from Transnet:
- All minutes of board meetings wherein the appointment of the successor to Ms Maria Ramos as group chief was discussed;
- All minutes of board meetings where Mr Gama's disciplinary hearing was discussed;
- A profile of disciplinary hearings against executives who exceed their financial limits in relation to tenders
- Whether the condonation practice referred to in item (iv) above exists within Transnet and a profile of such condonations
- Whether there was currently within the employ of Transnet a person called Sipho Dube, who might shed light on an aspect of the public protector's investigation.
Source - iol
