Brian Molefe was one of the key architects of the capture and looting of the state-owned entity.
The second part of the Zondo commission’s report identified former president Jacob Zuma as the main sponsor of the Gupta brothers’ capture of Transnet and former state enterprise minister Malusi Gigaba as one of their major enablers.
But it was group chief executive officer Brian Molefe who was the Guptas’ go-to guy when it came to making sure that the dirty billions flowed their way via inflated procurement contracts and unnecessary advisory deals, which looted Transnet’s locomotive and crane refurbishment programme, its IT contracts and its manganese expansion initiative.
Molefe served as Transnet group chief executive between 2011 and 2015, according to Acting Chief Justice Raymond Zondo at the behest of the Guptas, whose network nominated him for the position.
Molefe’s appointment was confirmed by Gigaba, another Gupta associate, despite the fact that he was not the candidate selected as being most suitable by the interview committee.
During that time, he was the Gupta brothers’ key inside man at the state-owned entity, along with group chief financial officer Anoj Singh and the influential, controversial and now-disbanded Board Disposal and Acquisitions Committee’s (BDAC) chair Iqbal Sharma.
In April 2015 Molefe was seconded to Eskom, along with Singh, on the instruction of the Guptas, who wanted him redeployed to the electricity provision entity, according to the Zondo report.
Deployed
The report clearly identifies Molefe, who was appointed on the recommendation of another Gupta “friend”, Gigaba, as being at the centre of their looting of Transnet’s coffers.
Immediately after the arrival of Molefe (56), the group chief executive’s powers over procurement were dramatically altered to allow him to conclude deals of up to R1-billion without the involvement of Transnet’s good governance unit.
Molefe made the decisions about the Transnet market demand strategy, which included investing R300-billion in new locomotives and other initiatives aimed at increasing its rail capacity.
High-value tenders were brought directly under his control, and that of Singh and the BDAC, and the value of contracts they could conclude was increased over the years to more than R3-billion by 2016.
According to the report, Molefe made use of so-called confidential confinements – the use of a select panel of service providers with no public tender process – to ensure that contracts were given to Gupta-linked companies.
This is how contracts were issued to both McKinsey and Regiments Capital for “advisory fees”, which were then laundered through other companies involved in the Guptas’ criminal enterprise.
The practice of confidential confinements was scrapped by Transnet in 2019.
In total, the Gupta network landed a cool R41.2-billion in illegal contracts under Molefe’s tenure — an impressive 72% of all the payments they received from state entities.
Zondo found that Molefe — along with Singh and Sharma — “facilitated the conclusion of irregular contrats at inflated prices, variously through deviations, improper confinement and the changing of tender evaluation criteria in order to facilitate the entry of companies involved in the extensive money laundering scheme directed by [Gupta lieutenant Salim] Essa on behalf of the Gupta enterprise”.
Zondo said that Molefe had known the Guptas, and in particular Ajay, for “several years’’ before he was appointed as group chief executive, attending regular social functions and private meetings at the family compound.
Molefe visited the compound about 40 times during his time at Transnet, and the Guptas also visited his home.
Questionable value
Molefe had signed off on substantial payments for advertising and market events with the New Age newspaper even when others at Transnet felt this was of “questionable value”.
Zondo said Molefe went on to oversee the substantial procurements at Transnet from which the Gupta network illegally benefited, with their companies receiving R3.5-billion in proven kickbacks on the locomotive deals “under his watch”.
In his analysis of Molefe’s role, Zondo said it appeared that he had been selected by the Guptas to facilitate their takeover of Transnet and later Eskom.
“It is unlikely that the person who became group chief executive of Transnet (and later group chief executive of Eskom) was nominated by a Gupta associate by chance. More likely the role played by Essa and Sharma in advancing Molefe was part of a bigger strategy by the Gupta enterprise to capture Transnet,” Zondo said.
He recommended that the law enforcement agencies investigate charges of racketeering and corruption over the locomotive procurement; the crane refurbishment; the appointment of advisers; the IT contract and several other unlawful benefits secured by the Gupta enterprise.
Zondo also recommended an investigation into evidence from Molefe’s former bodyguard, who had testified that he received a backpack full of cash from the Guptas on several occasions.
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