“Delinquent Popo Molefe is not fit to be company director”

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The month of August has been an interesting one for our beloved South Africa. The Commission investigating “State Capture” finally got underway and commenced
with public hearings. The big political story was, of course, the accusations by the New
York Times (NYT) levelled at the Deputy President of the ANC and that of the Republic,
David Mabuza. The Leader of the Democratic Alliance (DA), Mmusi Maimane recently
wrote an open letter asking the Deputy President to answer certain questions. We have
also seen local media trying so hard to escalate the NYT story to new heights. The Daily
Maverick carried an “analysis” of “the particularly precarious position of one David
Mabuza”. But it would seem the story is simply not gaining traction that the “brigade”
behind it had hoped for.

When I read the NYT story on David Mabuza and the commentary by various local
analysts and journalists, I knew there was something big coming our way. Local South
African or African stories, even the most horrible, do not easily make it onto the front
pages of the New York Times. I had to “connect the dots” as one “vindictive” man would
always like to remind us. Of course, the big news finally arrived i.e. the notice of
intention to suspend issued by the new Board of Transnet against its Group CEO,
Siyabonga Gama and other senior executives. Many would ask what is the connection
between these issues. I wish to reply in the following manner:

DD Mabuza and the New York Times Article

A few weeks ago I had one-on-one consultations or rather conversations with some
leaders within the ANC. We discussed various issues and challenges facing our
beloved country, the economy and how the ANC could possibly respond to these. As
we discussed the various social and political forces at play in our country and within the
ANC, I specifically raised the question about Deputy President David Mabuza in the
context of the role he played in the outcomes of the ANC 54th National Conference.

Some of the leaders clearly dislike “DD”, as he is popularly known, citing the “Nasrec
betrayal” whilst others felt that he has surprised them by his abilities and intelligence,
and in particular, how he has been able to take up and fulfil his Government
responsibilities as Deputy President. They were surprised also at how he dealt with Oral
Questions in Parliament, where they thought, he would be exposed, fall short of
expectation and possibly get embarrassed. They recognize that he has this “rare” ability to read the situation but they quickly add “he will manipulate any situation to his
personal and political advantage”.

I have not met Deputy President Mabuza. What I found interesting though is the
common thread running through the assessment of him and narratives by leaders that
are on different sides of a divided movement. They all claim that he seems to be the
only one who had shown that he could stand up to the “divisive” politics of Pravin
Gordhan and his “mob”. They say after Nasrec, President Cyril Ramaphosa and the
leadership collective of the ANC are doing everything in their power to unite
the organization. It would appear that Pravin Gordhan, a member of the National
Executive Committee in his own right and his mob are going against what the senior
leadership of the ANC is trying to do.

After Nasrec, David Mabuza seem to have adopted a firm stance against “State
Capture” but has consistently refused to give in to the agenda of Pravin Gordhan, who
seems to be disliked by many across the political divide, including by many of his
Cabinet colleagues. They claim that David Mabuza specifically does not support the
attempts by Pravin Gordhan to impose his “own” people on State-Owned Enterprises.

They further claim that David Mabuza had specifically resisted attempts to push through
the current Board of Transnet with Popo Molefe as Chairman, resulting in a
“compromise” that this Board would be appointed for only twelve (12) months and not
for three (3) years as is the requirement. In fact, it does not make sense to appoint a
Board of a strategic SOE like Transnet for twelve months at a time when the issue
of the performance of SOEs has become critical to our economy, including the risks of
downgrading by rating agencies. Apparently, David Mabuza had also objected to the
planned suspension of Siyabonga Gama and other executives at Transnet based on
incomplete reports and unproven allegations.

The article in the New York Times was well-orchestrated and a deliberate attempt to
intimidate the Deputy President and ultimately silence him. He was to be intimidated so
that when the takeover of Transnet unfolds, there is no voice within the ANC and
a government that speaks against this senseless and irresponsible action. This could not
be staged by the local media but had to be positioned as an article that speaks
concerns of investors about rising corruption. David Mabuza had to be reminded of who
calls the shots and put him in his place. Unfortunately for the sponsors of this article,
David Mabuza kept his silence and did not fuel the story further, which failed to gain
traction in the public. The Daily Maverick was frustrated and ran a story that read “David
Mabuza remains silent on the overall accusations carried by the @nytimes 10 days
ago”.

Sophisticated Machinery

The NYT article forms part of the modus operandi of a sophisticated machinery that has
been set up in the country since Pravin Gordhan was first dropped as Minister of
Finance in May/June 2014. This machinery is in overdrive and it has managed to
intimidate and silence many of the ANC leaders from speaking out against obvious
injustices and abuse of power. This machinery involves a network of people in powerful
positions, including former members of the SARS Rogue Unit, current members of
SARS, key people in the Finance Intelligence Centre and paid journalists in both print
and electronic media. Today, there is no longer a difference between eNCA and SABC.
They are all captured by this network.

The same network was again in overdrive the previous month when the Leader (“CIC”)
of the Economic Freedom Fighters (“EFF”) criticized Pravin Gordhan and claimed that
he was the most powerful politician in the country. The sophisticated network did not
fight directly with Malema. They tried to intimidate him about the funding of the EFF and
the relationship with “Mazotti”. They accused Malema of being in bed with “gangsters”
and “cigarette smugglers”. When the media reported that Malema had raised the name
of Adv. Dali Mpofu for the position of National Director of Public Prosecutions, they
claimed “of course, if you are friends with smugglers, you’d want an NDPP that will
protect your friends involved in smuggling and criminality” from justice. This is the same
network that went for Julius Malema the first time around and tried to put him in the
“washing machine” in respect of his tax matters. SARS before Tom Moyane and after
continue to play its part in this game of power.

I personally came into direct confrontation with this powerful machinery when an
offensive was launched against me after I had left PRASA in July 2015. The machinery
had though PRASA was captured by the Gupta Family and this proved to be false. I
wrote to the Minister of State Security in February 2016 about a group of
companies and individuals involved in criminality, I provided evidence when I applied to
be admitted as amicus curiae (“Friend of the Court”) in the matter between PRASA and
Swifambo Rail Leasing. When I identified this network in my court papers, Ivan Pillay
and some members of the mob appeared in person at the Gauteng South High Court. I
further raised this issue of the criminal network during my Testimony to the
Parliamentary Inquiry on Governance at ESKOM in January this year. The media
focused on what I said about Dr Zweli Mkhize but deliberately left the critical issue of
illegal intelligence operations by companies and individuals outside of the State. I
mentioned the names of companies like Basileus Professional Consulting Services, Hogarth Forensics and the behind the scenes work of one company called Ukhozi
Forensics involving Ivan Pillay and some former members of the SARS Rogue Unit.
These were the companies doing the dirty work for Werksmans Attorneys.

I personally investigated the forces behind Popo Molefe and the Werksmans
investigation that cost almost R200 million. I came across information that strongly
suggests the existence of a sophisticated machinery with its own infrastructure,
that would do anything to gain power.

“Prasarisation of Transnet”

It was reported in the last few days that Siyabonga Gama had written a letter to Minister
Pravin Gordhan asking him to intervene in what he termed the “Prasarisation of
Transnet”. Apparently, the letter was copied to the President of the Republic, His
Excellency Cyril Ramaphosa and his Deputy David Mabuza. The concept
of “Prasarisation” is an interesting one. It is a correct and appropriate characterization of
the current situation unfolding at Transnet. This is exactly what took place at PRASA.

Metrorail started showing signs of decline as early as 1992 and by 2005, it was
facing total collapse. A few weeks after I had resigned from Government in June 2006, I
was instructed by the Minister of Transport to lead efforts to prevent the collapse of
Metrorail services and the entire commuter rail system. I was given 18 months to do this
but ended up spending 10 years at PRASA (including its predecessor the SARCC). Not
only did we prevent such collapse, but we implemented bold measures to recover rail
services to almost 1992 levels (almost 700 million passenger trips). We managed to get
the rail system to play a significant role during the 2010 FIFA World Cup. After 2010, we
embarked on a bold and ambitious R137 billion recapitalization programme aimed at the
modernization of passenger rail system through the acquisition of new commuter trains,
new electronic interlocking signal systems, modern locomotives, new-generation
stations, digital radio communications and other modern operating systems. The “big
boys” in the ANC lost out on the main contracts. They brought Popo Molefe to change
things in their favour.

Popo Molefe and his new Board declared everything that we did as irregular
and corrupt and proceeded to cancel contracts they felt did not benefit them. Within
two years, Popo Molefe and his Board had reversed all the major gains made through
8 years of relentless effort. Key contracts were cancelled because they were declared
irregular and maintenance grinded to a halt. As a result, Metrorail lost almost half of its
fleet and passenger trips between October 2015 and December 2017. Revenues in the
rail businesses plummeted. The result is the terrible state of the train system that we see today around the country. Figures show that Metrorail services deteriorated to
levels before 1999 as a result of direct interventions by Popo Molefe and his Board.

“Prasarisation” refers to the current crisis engulfing PRASA which resulted in the
collapse of its rail operations. The focus on reliability and availability, a science of any
railway operation, has been gravely compromised, resulting in significant decline in the
delivery of quality train services around the country. In the six (6) week period covering
the period February and March 2016, Metrorail lost over 18% of its fleet due to crazy
decisions of the PRASA Board under Popo Molefe, poor management and non-existent
maintenance.

Siyabonga Gama is warning us that the same could happen at Transnet if Popo
Molefe’s “infantile disorder” is not stopped.

Popo Molefe’s Legacy at PRASA: Collapse of Operations

From a total fleet of 4568 coaches, only 3059 coaches were available in January/February 2016 and this number declined further to 2000 coaches by November 2017. Stopped Trains increased from 5% to 16% in Feb 2016 and this translated into 68 trains during this period. Availability of trains declined significantly during the period, which had a negative impact on millions of rail commuters that were forced to travel under conditions of extreme overcrowding, violence and personal injuries. The result was further commuter backlash and burning of trains. The severe impact has been felt more in the Western Cape where a significant number of public transport trips still happen by train.

 

 

There was a significant decline in network capacity resulting in more speed restrictions.
The increase in speed restrictions on various lines across the country is an indicator of
poor maintenance of the network and infrastructure in general or lack thereof. This in
turn has meant increased train delays and cancellations.

Critical Infrastructure initiatives are not being implemented resulting in further speed
restrictions and manual authorisations of trains on key railway lines, resulting in threats
by the Rail Safety Regulator (RSR) that it may be forced to act and issue directives for
certain lines to be closed.

With respect to preparations for the introduction of new modern trains, the situation is
bad. Various modernization initiatives have grounded to a halt as a direct result of
decisions taken by the previous PRASA Board under Popo Molefe. PRASA has spent
less than 10% of its Capital allocations in the 2017/18 Financial Year. This is criminal
when people are travelling under such terrible conditions. The biggest risk is that the
deployment of new trains in the respective corridors is unfolding at a very slow
pace. There is no doubt that Alstom/Gibela will take advantage of this situation.

Key infrastructure such as new Depots, perway, platforms, drainage, sub-stations
are not in place to support the new, modern trains. Not single depot
required for the maintenance of new trains has not been built since 2015, and the
perway programme to enable higher train speeds (120 km/h), increased train frequency
as well as compatibility with platforms, amongst other requirements, have been
disrupted or lagging far behind schedule.

This situation came about because Popo Molefe prioritized his so-called fight against
corruption and allowed PRASA to shift away from its primary mandate of providing
commuter rail, long-distance rail and inter-city bus services. The country and its poor
commuters are paying the price for this madness.

The 2017/18 operational information indicates a further decline and effectively the
collapse of commuter and long-distance rail services as well as Inter-City bus services
(Translux and City-to-City buses) around the country. This is the true legacy of Popo
Molefe, a hero to some in our country.

Popo Molefe at Transnet

Siyabonga Gama has correctly characterised the problem as “Prasarisation of
Transnet”. He acted correctly by writing to his Minister to intervene. Unfortunately,
Siyabonga Gama does not know that the network of companies and individuals behind
his persecution today, barring perhaps one legal firm, is the same network
of forces that destroyed PRASA two years ago. At the heart of this sophisticated
machinery is none other than Pravin Gordhan, his Minister. The sooner Siyabonga
Gama realizes that Pravin Gordhan is the “Godfather” of this sophisticated machinery,
the better for him.

Popo Molefe is a highly compromised man and happens to be used as a pawn in a
much bigger power game. He is being used because (1) he was compromised when he
was General-Secretary of the United Democratic Front (UDF), where the likes of Pravin
Gordhan and Valli Moosa (his partner at Lereko Investments) were calling the shots. As
the youth and student activists during the mid and late 1980s, we came to know the true
Popo Molefe and not the one praised in the media; and (2) he was in serious financial
trouble and had to be rescued. He sold his soul as a result.

The New York Times article had nothing to do with the concerns of investors against the
person of the Deputy President, David Mabuza. This article was sponsored from home
soil, South Africa. This was a firm warning to David Mabuza to know where power lies. If
he does not give in to the wishes of Pravin Gordhan and his network, there will be
“fireworks” and he might as well “kiss” his political career and ambitions goodbye. The
suspension of Siyabonga Gama and the other executives will be the test of this power. I
do not know David Mabuza that well but we still have to see if he, like many of our
political leaders, will be intimidated by the New York Times article and succumb to the
terrible tactics of the sophisticated network behind it.

I listened to the many interviews by Popo Molefe on Radio (702), eNCA and on SABC as
well as the print media over the past two weeks. I am convinced that Siyabonga Gama
and the other Transnet executives will not get a fair hearing. A Business Day headline
stated that he was the same as gone. Popo Molefe made a startling statement on 702
that foreign entities had set-up boards of SOEs as proxies to loot. The SABC
(independent and commitment to unbiased” reporting) kept on reminding us throughout
the day one Friday in August that Gama is running against time to make his submission
before the deadline on Monday.

I kept on asking myself many questions, chief among these was whether Popo Molefe is
the right person, morally and otherwise, to demand answers from Siyabonga Gama. I
know and had worked with both gentlemen.

I respected Popo Molefe when many of us, the young lions of the 1980s missed school
to attend the Delmas Treason Trial in support of the trialists and their families. The
Court-room was small and priority was given to the families. Some days the police
would make concessions and allow us inside the Court-room before formal proceedings
to greet our leaders, shake their hands and shout “Amandla! on our way out. It would
take each group an average 1 minute inside the Court but many did not have the
opportunity to enter. Popo Molefe was one of the accused.

I was also at the mass solidarity meeting calling for the release of the Delmas Treason
Trialists, which was held at the Central Methodist Church in Johannesburg. The meeting
was addressed by Reverend Frank Chikane and Dr Allan Boesak. The meeting was
disrupted by the Police who stormed the church during the speech by Dr Allan Boasak,
who spoke after Rev Chikane. I was also there outside court when Judge Van Dirkhost
(if my memory serves me well) sentenced the Delmas Treason trialists to imprisonment.
We were angry and planned to take action against apartheid structures on our way back
home.

I was also at the airport in 1989 to welcome back the leaders from Robben Island.
We celebrated and carried shoulder high Terror Lekota, Popo Molefe, Moss Chikane
and others when these leaders landed at Jan Smuts Airport after they had won
their appeal. I was looking forward to work under Popo Molefe, a veteran of our
liberation struggle when he was appointed PRASA Chairman in August 2014. I
worked under him for only 12 months.

have known Siyabonga Gama for almost 20 years. I was in the Ministry of Public
Enterprises when he was appointed CEO of Transnet’s National Ports Authority (TNPA)
in 2000 till 2005 and as CEO of Spoornet, later rebranded as Transnet Freight Rail
(TFR) from 2005 to 2016 before he became Group CEO of Transnet in 2016. I could not
reconcile myself to the fact that Siyabonga Gama was expected to make written
submissions on Monday (20 August 2018) to Popo Simon Molefe on matters of
maladministration, misleading the board and corruption. I was accused of all these
things by Popo Molefe and the same modus operandi is again in full swing. This does
not make sense to me. Is Popo Molefe fit to be Chairman let alone a Director of any
company. Let me explain why?

A few days or week after my testimony to Parliament, I bumped into Popo Molefe at the
Killarney Mall where I was meeting a former colleague, friend and comrade, Moffet
Mofokeng. Popo Molefe was in a rush because he had some banking to do. We spoke
briefly about my testimony. I raised my views about his interview with 702 where he
continued to attack me. Popo Molefe was so concerned but it was strange that he
did not, not even once, raised anything I said about him in my testimony. I had raised
serious issues about Popo Molefe in my testimony and he was not keen to get into any
of these. His main concern was what I said about Dr Zweli Mkhize, former Treasurer-General of the ANC. I urged him to make contact with the Parliamentary Inquiry on
Governance at Eskom and put his version of events and his side of the story. He was
not keen to go to the Parliamentary Inquiry.

I should perhaps take this opportunity to remind the reader, of my testimony in
Parliament that related specifically to Popo Molefe which he could not or did not want to
challenge. The specific transgressions relate to his time as PRASA Chairman and did
not include other serious transgressions that had been raised before he joined PRASA.
I raised the following transgressions and provided evidence to support my testimony.

Some Facts about Popo Molefe’s Corruption

1. Corruption and Money-Laundering

I raised the fact that Popo Molefe had acted in breach of the Prevention and Combat of
Corrupt Activities Act (PRECCA) of 2004 and breached various provisions of the
Companies Act. Nine (9) months into his appointment, he had found a way of
laundering money from PRASA for his personal benefit. He revived his otherwise docile
Dr Popo Molefe Development Foundation and organized a Golf Day of the Foundation
at Sun City on 25 April 2015, to coincide with my birthday. He got companies contracted to PRASA to make financial contributions and provide other gifts to the Foundation.
Others claim cash payments were even made to his wife.

This is not only a serious Conflict of Interest by a Board Chairman but these activities
constitute serious acts of corruption and money-laundering. It was mentioned that the
companies were threatened and told: “Lucky will no longer be here and if you do not
pay, your contract will be investigated, declared irregular and cancelled”.
Many of the companies that made contributions to his Foundation made more
money from PRASA thereafter, with some of the smallest companies getting their scope
of work increased tenfold without capacity and without any process.

For example, the Auditor-General made a finding that the appointment of companies
involved in the refurbishment of train coaches was irregular. Some of the contracts were
terminated or reduced whilst those that contributed at Sun City had their workload
increased tenfold. Some of the smallest companies were allocated work that they could
not do but they subcontracted to others and passed the huge costs to PRASA. These
small companies continued to make money and in turn, contributed money to the
Foundation or to Popo Molefe himself. If we talk of “gratification” in terms of the
PRECCA, this is such an obvious case.

As a Director of PRASA, he acted in conflict with the public entity he was entrusted to
protect and made money through underhanded methods. The companies that
made financial and other contributions in return for additional workload they did not
deserve are equally guilty of corruption and money-laundering.

If he had agreed to go to Parliament and testify, Popo Molefe knew that he would have
to answer difficult and specific questions from Members of Parliament. He would be
required to answer about his golf days, how many were held, he would be asked to
provide the list of companies that attended and how much did each company contribute,
how many of these companies were contracted to PRASA, what was the value of their
contracts at PRASA before he became Chairman and how each of these companies
had their workload increased following their contributions in these golf days, where are
the minutes to confirm Board decisions approving the increase in the scope of work for
some companies and not others, Sun City would probably have been requested to
testify and to provide the full list of bookings for that weekend, he would be asked
whether he declared this major conflict of interest with the company of which he was
Chairman. He would be asked how many schools, clinics and crèches has the
Foundation built or how many bursaries had the Foundation awarded from the
contribution, he would be asked about the tax aspect of the foundation. Finally, he would be asked to provide the audited financial statements of the Foundation over the
past 3 years before he became PRASA Chairman and after. He was not keen to answer
any of these questions because they would prove that he was using the golf events as a
conduit to launder money received from companies contracted to a company of which
he was Chairman.

Popo Molefe, a veteran of the ANC and the democratic movement in our country, has
been successful in projecting an image of a corruption buster. He speaks on a daily
basis about fighting corruption but himself is so much steeped in corruption.

2. Irregular Appointment of Werksmans Attorneys

The Auditor-General had found that the appointment of and payments to Werksman
Attorneys totalling over R140 million is irregular (to date: Werksmans Attorneys had been
paid R200 million by PRASA). This white legal firm was appointed to
investigate me and many others and conduct unlawful surveillance against us.
Popo Molefe and Zodwa Manase (Chairperson of the Audit Committee) were the drivers
behind the irregular appointment of Werksmans Attorneys. In my testimony to
Parliament, I provided details of the irregular appointment of this legal firm as well as
the unlawful activities they conducted. Popo Molefe, a champion of the “rule of law” and
“due process”, had previously claimed that anything irregular constitutes corruption. If
we follow his own logic, the findings by the Auditor-General makes him corrupt.

In my testimony, I did not only deal with the irregular appointment of Werksmans
Attorneys and their involvement in illegal activities, but went further to call for a forensic
investigation into the payments to Werksmans Attorneys. I wanted a forensic
investigation to check who did Werksmans Attorneys pay after they were paid by
PRASA and which other entities or individuals were paid by entities paid by Werksmans
Attorneys. The true purpose of the irregular appointment and payments to Werksmans
by Popo Molefe and Zodwa Manase would become clearer. Popo Molefe had gone to
court to force the Hawks to chase some of us without evidence but had consistently
resisted attempts, even by Minister Dipuo Peters, to investigate the irregular
appointment and unlawful payment to Werksmans Attorneys.

The media reported extensively about my testimony but not much about the role of
Werksmans Attorneys. The media ignored the call I made in Parliament for an
independent forensic investigation into payments to Werksmans Attorneys. The corrupt
nature of the appointment will become clearer and prove that the many forces making noises about corruption are in fact the most corrupt. This was at the heart of my
testimony to Parliament.

3. Remuneration of Directors

The most embarrassing thing for any Director is to be caught red-handed with your
hands in the till. Popo Molefe and his Directors acted like “petty thieves” when they stole
from the cash tin.

Popo Molefe and his Board remunerated themselves for “additional meetings” in
violation of the Companies Act, in breach of the King Codes on Good Corporate
Governance as well as in violation of the Shareholder Compact with the Shareholder, in
this case the Minister of Transport.

Over and above the remuneration for Directors approved by the Minister of Transport,
Popo Molefe and his Board approved to remunerate themselves for additional meetings
which he convened. Popo Molefe personally got paid close to R2 million for the
additional meetings. This information is contained in the Management Letter prepared
for PRASA by the Office of the Auditor-General for the 2015/16 Financial Year, which
was leaked to the media at the time.

Popo Molefe and his entire Board were instructed by the Minister of Transport and the
Portfolio Committee on Transport in Parliament to “pay back the money”. The Minister
later reported that Popo Molefe had already paid back almost R680 000. This is one of
the issues that strained the relationship between Popo Molefe and his boss, former
Minister of Transport, Dipuo Peters.

When Minister Dipuo Peters left office, she did not know that the Directors of PRASA
did not pay back the monies they unlawfully paid themselves. In fact, I am reliably
informed that the monies paid by Popo Molefe were paid back to him after a few
months.

4. The Story of South African Fence and Gate

The company that was at the forefront of sponsoring the Golf Day at Sun City was SA
Fence and Gate. This company was contracted to PRASA in 2012 for the fencing
of depots nationally and the contract value was R209 million. SA Fence and Gate not
only failed to deliver on its contractual obligations but also defrauded PRASA through its claims. As the then Group CEO, I instructed the CEO of one of the PRASA
Technical division managing the works to terminate the contract and recover the
monies already paid to SA Fence and Gate. The cancellation was effected in May 2015.
Popo Molefe and Dipuo Peters were still friends then and they tried to force me to pay
SA Fence and Gate money that was not due to this company and I refused (read the
Mail and Guardian story on this matter).

In my absence in January 2015, Martha Ngoye, the Acting Group CEO during my leave
of absence, approved a controversial variation order to the fencing contract. This was at
the instigation of the Chairman, Popo Molefe. SA Fence and Gate was tasked with
providing 2000 lights to PRASA to the tune of R58 153 296, 72. By December 2015,
only 5 lights were delivered on site with the remaining 1 995 lights supposedly in an offsite
warehouse.

According to standard contract practice, cession forms transferring ownership from the
supplier to the contractor and from the contractor to the Client (PRASA) needs to be
signed and form part of the payment certificate where the stock has been claimed but
not installed. In this case, none of the documents have been submitted and technically
PRASA has paid R47.6m over 2 years for goods it did not have in its possession or
legally own by January 2016.

The supplier was not paid in full and had at that time refused to release the stock to SA
Fence and Gate until the long outstanding account had been settled.

There was a difference of R10.5m for light and CCTV masts as well as installation.
Interestingly, a source close to the programme at the time told me that the mast
manufacturer has also sold a portion of the stock that should have been set aside for
PRASA due to non-payment by SA Fence and Gate albeit that SA Fence has received
payment from PRASA.

Investigations revealed how fraudulent claims were forced into payment certificates to
increase revenue and profit such as training fees for Health and Safety “Flagmen”,
which never actually took place. PRASA was charged in the region of R1m for the
training. SA Fence and Gate was in the process of looking for Training Companies to
backdate training certificates to cover-up the fraud.

How did SA Fence and Gate get paid for lights without the stock and ownership being
ceded to SA Fence and Gate and delivered to PRASA?

I suspended Martha Ngoye, who was acting Group CEO during my leave of absence,
for the irregular approval of the R58 million In January 2015. The date for her
disciplinary hearing was set. Popo Molefe brought her back without her answering to
any of the serious charges against her. This from a man that lectures the country
everyday about the “rule of law” and the importance of “process”.

After I left PRASA, SA Fence and Gate was reinstated by Popo Molefe and his Board.
The legal matter between PRASA and SA Fence and Gate was not properly defended,
with SA Fence and Gate winning in court. Its workload increased significantly
thereafter. By the end of December 2016, SA Fence and Gate had already been paid
over R340 million for a contract that was R209 million. In 2016, I had opened a case of
fraud and corruption against Popo Molefe, certain PRASA officials and certain Directors
of SA Fence and Gate.

The Auditor-General had also found that the payments made to SA Fence and Gate are
irregular.

5. Personal Use of PRASA S350 Mercedez-Benz in Violation of Tax Law

When Popo Molefe joined PRASA, we had allocated to him protectors and a vehicle, an
S350 Mercedez-Benz for official use. I had written a letter to him indicating that the
vehicle was strictly for official use, the driver had to keep the log book and record
all travels. I emphasized that we need to look at the tax implications of the use of the
vehicle. I further instructed that the vehicle be parked at the Intersite offices, which was
closer to his home. The Board of PRASA had also discussed the use of the vehicle by
the Chairman and instructed that this be regularized.

In the leaked Management Letter, the Auditor-General made a finding that the use of
the vehicle by Popo Molefe was irregular and in violation of the Income Tax
requirements. Because he could not prove that the use of the vehicle was strictly for
business trips, the Auditor-General made a finding that Popo Molefe should pay
SARS an amount in the region of R560 000 for the use of the PRASA vehicle.

Popo Molefe got angry with me, including for writing a letter to him that he pays back
PRASA for the travel of his wife on PRASA’s account. This was after I received invoices
from the travel agent contracted to PRASA that showed that his wife travelled numerous
times between Johannesburg and Cape Town on PRASA’s Account.

6. Appointment of Forefront

In a disciplinary case against employees that were seen to have supported me during
my fight with Popo Molefe, one of the Group Executives gave evidence and was asked
during cross-examination as to how a company by the name of Forefront Solutions was
appointed. Forefront was apparently appointed to manage the marketing and
communications activities at PRASA. Under oath, Dr Sipho Sithole stated that the
irregular appointment of Forefront, without any process whatsoever, was an instruction
from the Board of PRASA. The evidence of Dr Sipho Sithole is available for Popo
Molefe or any interested person to read or listen to the audio recording. This from a man
claiming to be fighting corruption and a bastion of the rule of law.

The Office of the Chief Procurement Officer at the National Treasury wrote a letter to
PRASA seeking answers about the appointment of Forefront. The answers were not
forthcoming.

Conclusion

The Parliamentary Inquiry into Governance at ESKOM had come and gone. The Inquiry
has concluded its work. Despite threats by Popo Molefe and Dr Zweli Mkhize to
challenge my testimony, no one, including the journalist that made a lot of noise about
non-existent “tall trains”, went to Parliament to challenge any aspect of my testimony.
My testimony was simply factual and truthful. No one will be able to challenge the
factual basis of my testimony.

The Commission on State Capture is underway. I challenge Popo Molefe and all of the
individuals I mentioned in my testimony, to go to the Commission and tell their side of
the story. As people claiming to be fighting corruption and State Capture, they have the
political and moral obligation to present their version of events and help the Commission
to discharge its responsibility and fulfil its mandate to the people of South Africa.

Popo Molefe is on a high horse. Many people think that he is being targeted for fighting
corruption. I have provided specific details of irregular and corrupt activities on his part.
If he claims that this is not true, I challenge him not to miss the Commission
investigating “State Capture” under Deputy Chief Justice Raymond Zondo as he did with the Parliamentary Inquiry into Governance at ESKOM where I mentioned him several times in my testimony.

As the Transnet saga unfolds, I ask myself whether or not Popo Molefe should in the
first place have been appointed Chairman of the Transnet Board and demanding
answers from Siyabonga Gama. I ask myself whether this “delinquent” is fit to be a
director of a company in terms of provisions of the Companies Act?

“You be the judge”!
Lucky Montana is the former PRASA chief executive officer