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Former Transnet CEO may be forced to repay millions after illegal reinstatement

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Johannesburg – Former Transnet CEO Siyabonga Gama faces the prospect of being left high and dry after the Commission probing State Capture indicated that it may make a ruling for Gama to pay back R13 million to the parastatal for his alleged unlawful reinstatement in 2011.

This was the indication given by the Commission’s chair Deputy Chief Justice Raymond Zondo after former Transnet board chairperson Mafika Mkhwanazi admitted that his board erred in reappointing Gama with full benefits to his post in 2011.

Mkhwanazi concurred with Zondo that a move to recover the funds would be an appropriate move to reimburse the taxpayers and the State.

The former board chairperson concession followed extensive questioning about his role in the decision to reinstate including allegations that the board was coerced to do so by the former public enterprises minister Malusi Gigaba – he denied the allegations.

Earlier, the Commission heard how Gama was paid R13 million, including benefits, despite being found guilty on three counts of gross negligence of a senior executive.

The freight company also paid R4 million for Gama legal fees during his disciplinary hearing which found him guilty and declared him not fit to occupy that position.

Despite the disciplinary ruling and legal advice from Christopher Todd of Bowmans – the Transnet Board under Mkhwanazi reinstated Gama to his original position, back paid his salary of R2.5m including his short and long term benefits, since his dismissal on June 30, 2010 until his reinstatement on February 23, 2011.

The Commission on state capture heard on Monday that the total amount paid to Gama was R13 million.

These concessions were made by Mkhwanazi during his second appearance before the commission chaired by Deputy Chief Justice Raymond Zondo.

During his testimony, Mkhwanazi denied that the board had acted on instructions of Gigaba.

He said Gigaba just asked the board to review Gama’s dismissal. Despite denying any influence from Gigaba, Mkhwanazi, however, admitted that his board never fulfilled the duty of reviewing the dismissal.

“We took that decision based on a document that was placed before us. It was weak legal advice,” Mkhwanazi said.

He also admitted that it was wrong for the Transnet board to reinstate Gama saying the offences Gama’s was found guilty of did not warrant his reinstatement.

“In hindsight, it was wrong for us to reinstate Mr Gama, especially for signing procurement documents to illegally appointing a security company GNS to do business with Transnet. Mr Gama also admitted to Mr Christopher Todd that the GNS contract was wrong.

“Mr Gama admitted that there were gaps and loopholes in the contract. He also admitted that the GNS contract was a complete fraud,” Mkhwanazi said.

Political Bureau

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