Ex-Transnet executive’s bill for dodgy dealings increases from R18.4m to R26m

By Loyiso Sidimba Time of article published Aug 31, 2021

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The Special Tribunal has ordered former Transnet Capital Projects chief executive Linyenga Msagala, his trusts, IGS Consulting Engineers and its sole member Sipho Sithole to repay the more than R26 million they received in undeclared secret profits.

The tribunal, which President Cyril Ramaphosa set up to recover billions of rand stolen from government departments and state-owned entities in 2019, was critical of Msagala, his trusts, Sithole and his company for running an illegal conspiracy to benefit the former executive of the state-owned rail, logistics, port and pipeline company and his relatives.

On Tuesday, Judge Lebogang Modiba said Transnet supplier IGS Consulting Engineers, which had been awarded a R160m contract to build a pipeline for the high pressure transportation of liquid petroleum products between Durban and Heidelberg, was involved in an elaborate scheme to enrich Msagala and was also liable for the losses incurred by Transnet.

”IGS, Sithole and Msagala acted in concert in an unlawful conspiracy to benefit Msagala, his family trusts and his relatives to the prejudice of Transnet,” Judge Modiba said.

“In relation to the benefits that should have been to the advantage of Transnet and not for the personal enrichment of Msagala as its employee, or for his relatives or trusts. By so doing IGS and Sithole intentionally and unlawfully interfered in Transnet’s contractual rights. As such, the plaintiffs have established IGS and Sithole’s liability to Transnet.”

The Special Investigating Unit (SIU) and Transnet had hauled Msagala before the tribunal to initially recover R18.4m.

However, the SIU and Transnet amended their particulars of claim and added another R8m to their claim against Msagala, IGS and Sithole.

According to Judge Modiba, the investigation into IGS and Msagala’s financial relationship is continuing.

”Evidence of this relationship has been progressively unearthed during the forfeiture proceedings where the plaintiffs (SIU and Transnet) established that Msagala received over R18m from IGS and Sithole. In these proceedings, they have been able to establish that Msagala received a further amount of over R8m from IGS and Sithole,” she said.

In addition to being found to have been liable for the losses of more than R26m suffered by Transnet, Msagala has forfeited 36 cars, four expensive properties and two farms to the state.

His pension benefits, held with the Transnet Retirement Fund which have been under the tribunal’s May 17, 2020 preservation order, will be executed as payment towards his debt.

A criminal investigation against Msagala was pending, said the judge.

Transnet fired Msagala from the job in which he was paid R3.8m a year in 2015/16, after a second disciplinary hearing.

Political Bureau

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