Transnet dismisses CEO amid procurement probe

After losing confidence in his ability to lead South Africa’s state-owned ports and rail company.
Siyabonga Gama. Picture: Moneyweb

Transnet’s board dismissed chief executive officer Siyabonga Gama after losing confidence in his ability to lead South Africa’s state-owned ports and rail company.

The board sent Gama a letter notifying him of its decision to terminate his employment on Sunday, almost a month after he was told to justify why he shouldn’t be dismissed.

Board Chairman Popo Molefe, in a statement, said the decision stemmed mostly from Gama’s actions related to a contract for new locomotives, and was consistent with South African President Cyril Ramaphosa’s efforts to intervene when necessary to stabilise state-owned companies.

“We value and require transparency, accountability, and expenditure that is cost-effective and value for money,” Molefe said.

Gama, 51, will be paid six months’ salary in accordance with his contract, according to the statement.

An after-hours number couldn’t be located for Gama.

Ramaphosa’s administration is clamping down on graft and tackling poor management at state-owned companies, which are cash-strapped and pose an increasing risk to the nation’s finances. Executives at state power utility Eskom and South African Airways are among those to have been replaced.

Transnet initiated moves to suspend Gama and two other executives in August, amid a probe into their roles in procurement contracts.

The company squandered billions of rand and broke regulations when it altered the terms of a deal to buy 1 064 new locomotives, an investigation by law firm Werksmans Attorneys found. A separate National Treasury-commissioned report found Transnet paid R509 million more for 100 locomotives after switching a supply contract to a Chinese rail company from Mitsui & Co of Japan.

Earlier this month, Gama defended the company’s locomotive purchases as having been based on the country’s economic growth trajectory. He spoke at the Joburg Mining Indaba conference.

© 2018 Bloomberg L.P

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Here we go again. We have seen this before. Gama will now start never ending legal action and we the taxpayers will foot the bill. This ship is not bound for glory.

Exactly, and a few years down the line he will just pop up at either another SOE in another capacity or in government somewhere.

This board, people acting like they are immune to karma.

Maybe Gama should follow in the footsteps of Brian (sniff sniff) Molephe and ride off into the sunset.
Maybe these nefarious cadres can establish a partnership amongst themselves and register with CIPC as Thieves Incorporated

End of comments.

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