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Transnet’s office move was a way to bailout broke Group Five — Molefe

Transnet board chairperson Popo Molefe confirmed on Tuesday that the board of the state-owned entity is investigating the decision to move its headquarters from the Carlton Centre in Johannesburg’s central business district to Waterfall City.

Molefe revealed some of the details relating to Transnet’s probe into why its headquarters were moved to a building at the upmarket Waterfall mega-development near Midrand during his testimony before the Zondo commission of inquiry into state capture.

He told the commission — chaired by Deputy Chief Justice Raymond Zondo — that the Transnet board has identified certain “red flags” that indicate that the move was “a bailout of some kind”.

Molefe revealed that he will be reviewing a preliminary investigation report into the matter in the next few days.

According to Molefe, Transnet was moved into the same building where beleaguered construction company Group Five, which still had three years left on its lease, was housed. Transnet planned to vacate the Carlton Centre, which the company owns, for three years while renovations carried out at the building.

Group Five filed for bankruptcy protection in March this year and has reportedly put three of its biggest subsidiaries up for sale.

“Some of the strange things that have happened and the questions that I’ve asked management was how could it be so coincidental that Waterfall corner, the building you want, is occupied by Group Five … Is this not a bailout of some kind?” Molefe said on Tuesday.

“Because in my personal experience, if you had a lease the landlord would have said to you, ‘You can’t leave my property now unless you find a tenant to take up the remainder of that contract.’”

Molefe added that he has been privy to emails that he says indicate that there had been discussions between the management of Transnet, Group Five and Attacq — the real estate investment trust behind the development of Waterfall City — well before a request for proposal (RFP) had been sent out.

The RFP was reportedly issued in December 2017.

He told the commission that Transnet is now looking into how the RFP was seemingly designed to suit the existing conditions at the Waterfall City building. This despite the building not catering to the parking requirements of Transnet.

As a result, when there are meetings of Transnet’s executive committee, “members of management, in the top executive team, don’t have a place to park”.

“It is one of those things that will be investigated. And there are many more similar ones,” Molefe told the commission.

Earlier in his testimony, Molefe described a “horror show” upon the new board’s arrival at Transnet and a “rampant disregard” of rules and regulations at the company.

Minister of Public Enterprises Pravin Gordhan appointed the board in May 2018, in his effort to overhaul of state-owned enterprises and root out corruption.

“I just want to say that we refer to ‘total paralysis’ … We say that it is not an exaggeration to say that the board was astonished by the widespread corruption,” Molefe said on the state of Transnet.

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Sarah Smit
Sarah Smit
Sarah Smit is a general news reporter at the Mail & Guardian. She covers topics relating to labour, corruption and the law.

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