Fin24.com | Pravin’s Transnet board battle

After Public Enterprises Minister Pravin Gordhan sacked him on Monday, former Transnet board member Seth Radebe is dragging him to court, claiming that he is “racially biased” and “abusing his powers”.

Radebe was the board member Gordhan flayed at a standing committee on public accounts meeting in Parliament earlier this month for failing to act on a report by law firm Werksmans and not suspending senior officials. On Tuesday Radebe is launching an application at the Pretoria High Court to get his job back.

In a memorandum to counsel drafted by his lawyers, drawn up in preparation for his court bid, Radebe says that although Gordhan axed him, he did not sack fellow board member Lana Kinley who was appointed on the same day as he was by former minister Lynne Brown.

“The exclusion of Ms Kinley from ‘collective punishment’ demonstrates the minister’s racial bias,” Radebe’s lawyers charge in the document. Kinley remains on the board.

Gordhan’s spokesperson Richard Mantu said Radebe is no longer a non-executive director of Transnet and therefore Gordhan would not respond to his allegations.

“Minister Gordhan dealt with the issue of Mr Radebe’s public statement when the minister addressed the media on Tuesday May 15 2018, ahead of his budget vote in Parliament,” he said, adding that Radebe’s claims were “replete with distortions of fact”.

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In the briefing document Radebe’s lawyers state that on April 17 Gordhan called the Transnet board and accused it of being “part of state capture and for not acting against the former [chief financial officer Garry Pita] whose name had appeared in the press in relation to allegations of misconduct”.

“He instructed the board to suspend the CFO, but the CFO resigned the following day before any action could be taken against him,” they say in the document.

“The minister also complained to Radebe that the board’s failure to suspend [Transnet chief executive] Siyabonga Gama would lead to the termination of their tenure of the office.

“Mr Radebe again told the minister that there was no basis to suspend the CEO as he had not been found guilty of any wrongdoing. To his shock, the minister told Radebe that Gama should be suspended whether he had done any wrong or not.”

In an interview with City Press Radebe further claimed that he recorded Gordhan at that meeting “boasting that he can instruct the banks either to lend money or withdraw support for state-owned entities”.

He also stated: “The minister had indicated to me that after the CFO he wanted the board to suspend the CEO Siyabonga Gama. He threatened that he would remove the board if it could not do this and he would install a new board which could do the things he wanted it to do.

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“This meant that any new board to be appointed [would be] mere stooges and puppets who would not have to apply their minds to their fiduciary duties but would be accountable to the minister.”

‘Abusing his powers‘

Gordhan then, Radebe’s lawyers state, wrote to him and five other board members informing them that he intended to remove them from office and inviting them to make representations to him by last week Monday about why they should not be axed.

Radebe complained that Kinley was not asked to make any representations, even though she “sat and participated in the committee which dealt with the contentious issue relating to the acquisition of the 1 064 locomotives [from which the Gupta family received more than R5bn in kickbacks]”.

After the board met to deliberate on Gordhan’s “inappropriate instruction” to “take action against people without a proper basis or evidence”, Gordhan “confronted Radebe in Parliament for failing to suspend certain people as was suggested in the Werksmans report”.

“When Mr Radebe informed him that there was no basis for such suspension, the minister went on a rage in an attempt to bully him to carry out the unlawful instruction,” the document states.

After receiving the representations, Gordhan convened a shareholders’ meeting earlier this month during which he accepted the resignation of three directors, including the chairperson Linda Mabaso.

On Monday Gordhan wrote to Radebe informing him of his axing.

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“Our client is aggrieved by the removal. He believes that having only served on the board for no more than five months and being in the process of dealing and executing … the Werksmans report, the minister did not give him an opportunity to fulfil his duties as a director.

“He believes that the minister lumped him together with those directors who were appointed by [former] minister Brown.”

Radebe’s lawyers claim that the audit committee had extensive “engagements with Werksmans Attorneys”, and had appointed MNS Attorneys to finalise Werksman’s scope of work, had referred “certain matters to the judicial commission into allegations of state capture”, and had been “reporting and cooperating with the Hawks and other law enforcement agencies in their investigation of the 1 064 locomotives transactions and related matters”.

“Radebe believes that Minister Gordhan is abusing his powers,” his lawyers state.

Radebe‚ Potso Mathekga and Zainul Nagdee were removed from the Transnet board on Monday.

At the briefing ahead of his budget speech Gordhan told reporters: “Transaction Agreements, which were entered into on or about 17 March 2014, may constitute wasteful expenditure. The facts revealed by this [Werksman’s] investigation raise concerns as to the conduct of the erstwhile and current executives and other officials of Transnet.

“This conduct requires further investigation by a judicial inquiry with prosecutorial and inquisitorial powers, including the authority and jurisdiction to compel witnesses to provide relevant documentation and oral evidence.”

He said: “The nature and extent of the allegations of malfeasance at Transnet, based on the findings set out in the reports, notwithstanding the limitations imposed, warrant a ‘deep dive’ by the shareholder minister to identify those responsible for the conduct particularised in them.”

Gordhan said the report recommended that consideration be given to suspending all or certain of the Transaction Agreements, to review and possibly set aside said agreements under the principle of legality, in particular those relating to China North Rail and Bombadier, two recipients of tenders relating to the 1 064 locomotives tender.

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