Former Transnet CEO Brian Molefe and CFO Anoj Singh and Regiments Capital directors Niven Pillay and Litha Nyhonyha appeared before the Johannesburg specialised commercial crimes court on Monday.
They were arrested earlier on Monday by the National Prosecuting Authority’s Investigating Directorate, assisted by the Hawks.
The group was arraigned on charges stemming from the locomotives transaction advisory tender which was awarded to the McKinsey-led consortium in 2012, resulting in the procurement of 1,064 locomotives worth more than R54bn.
The ID said more people are expected to be arrested in relation to this matter.
The former Transnet executives and their co-accused are charged with contravention of the Public Finance Management Act and fraud, while the other accused are charged with fraud, corruption and money laundering.
The accused join former CEO of Transnet Siyabonga Gama, former CFO Garry Pita, former group treasurer Phetolo Ramosebudi, Regiments shareholder Eric Wood, Trillian Asset Management non-executive director Daniel Roy and Albatime owner Kuben Moodley.
The ID said the latest arrests and court appearance signify a critical move in holding to account those alleged to have been at the core of state capture at Transnet.
In February, the state capture commission of inquiry directed law enforcement agencies to launch criminal investigations against officials at Transnet for their alleged involvement in the procurement of 1,064 locomotives — the price of which was unlawfully increased by more than R15bn without a valid reason.
The ID said Regiments Capital was irregularly co-opted and benefited from the irregular appointment by Transnet in respect of the contract.
Today’s arrest and court appearance of additional senior executives reflects a significant milestone and outcome of our complex investigations.
— Andrea Johnson, head of ID
The contract value and scope for the services required was later escalated to more than R305m.
This agreement included, among other services, the sourcing of the China Development Bank loan and the Club loan, which were in the amount of $2.5bn, on behalf of Transnet (equivalent to R30bn at the time).
The accused also face charges linked to the R93.4m paid to Trillian Asset Management in 2015.
The four accused were granted bail of R50,000 each and the bail conditions included them handing in their passports.
The state further issued warrants of arrest for Salim Essa and Ashok Narayan, who is out of the country.
All of the accused are expected to return to court on October 14.
Head of the directorate Andrea Johnson said Transnet was considered one of the primary sites of massive looting of state funds at the peak of the state capture project.
“Today’s arrest and court appearance of additional senior executives reflects a significant milestone and outcome of our complex investigations.
“We, in collaboration with the Hawks, will ensure we continue to follow the evidence and arrest and prosecute those who are fingered to have been alleged to be part of looting the state coffers. The ID have made commitments to reclaim the state and ensure that impunity is no longer a given,” Johnson said.
The Organisation Undoing Tax Abuse (Outa) praised the latest arrest.
In August 2020, Outa submitted a detailed referral to the directorate on how the Transnet executives ignored the advice of former Transnet treasurer Eveline Makgatho, that a loan from the China Development Bank would be too expensive.
