Lawyer details how Gama signed R95m security contract for Transnet without reading it
A lawyer who advised Transnet on legal matters has detailed how the parastatal paid R95.5m over 25 months for security services to a company owned by General Siphiwe Nyanda yet the firm did not have no employees and also not registered with regulatory authority.
Christopher Todd, an attorney and a director at Bowman Gilfillan Attorneys, on Wednesday detailed how former Transnet CEO Siyabonga Gama approved a security contract with General Nyanda Security (GNS) without reading its document. Nyanda was one of the two directors of GNS.
Todd, who represented Transnet on legal matters between 2007 and 2010, told the Zondo commission of inquiry into state capture that no proper public procurement process was followed in awarding the multi-million tender to GNS.
The tender, which Gama approved in December 2007, was meant to last for five months and then be subjected to a review.
“ ...The initial pricing of the contract was estimated at R18m and that exceeded Mr Gama’s authority to approve the contract as his authority was limited to a contract not exceeding R10m. But Mr Gama said ‘I only approved five months’… But as it happened, this contract doubled in value inside that five months,” Todd told the commission.
Zondo was alarmed at the alleged conduct of Mr Gama.
“It is most concerning that a CEO signed a document committing a company to such millions of rands without reading the document,” Zondo said.
Todd told the commission that during a disciplinary hearing, Gama was questioned about his relationship with Nyanda, a former chief of the SA National Defense Force and former communications minister.
Todd said Transnet accused Gama of having a personal relationship with Nyanda but he denied it and said he knew Nyanda like any other member of the public.
“Transnet produced Mr Gama’s cellphone records which showed various telephone calls between Mr Gama and General Nyanda in the period preceding the awarding of the contract. The most recent call was on 1 December 2007, which was four days before the contract was signed," Todd said.
Todd testified that transcript of the hearing show that Gama said that Nyanda was not a close friend but “an acquaintance with whom he had played golf”.
It was also in the same disciplinary inquiry that Gama allegedly said he realised that what had happened with the GNS contract was “complete fraud”. Todd said when Gama was asked to who should be held accountable for the mess, he blamed it on employees, two of whom had been dismissed at the parastatal. The third employee was the one who presented him with the document to sign, who by then was living in Australia.
Todd told the commission that during the course of the contract, Transnet tried to ascertain if there was any work that was being done for the monthly payments that were being made.
After two extension of the contract, Transnet was paying GNS R4.5m a month.
“In a quick analysis of GNS by the forensics investigation team, it transpired that GNS had no employees at all. It was not even registered with the Private Security Industry Regulatory Authority,” Todd said.
A meeting was held with representatives of GNS as Transnet wanted to terminate the contract.
Todd said at a meeting which was aimed to address the concerns, GNS representatives said they were not the ones doing the work but were actually a platform and they procured security guards from other companies who then provide the services to Transnet.
This was rejected by the parastatal as the contract stipulated that GNS could not subcontract without its approval. Representatives of GNS allegedly left without any information on an advice from their lawyer.
The contract was ultimately terminated after 25 months.