A devastating indictment of GNS Risk Advisory Services — the security company linked to Communications Minister Siphiwe Nyanda — has been exposed in a high court application to review the findings of an internal Transnet disciplinary hearing.
GNS, now renamed Abalozi, was at the centre of the upheavals at Transnet last year which saw disciplinary processes launched against Transnet Freight Rail (TFR) boss Siyabonga Gama, as well as two other TFR managers, Dingaan Senamela and Sipho Khanye.
Charges against Gama involved a GNS security contract, ultimately worth about R55?million, as well as an unrelated locomotive contract.
Gama’s fate has not yet been decided, but TFR sacked Senamela and Khanye in March after a separate hearing chaired by senior counsel Nazeer Cassim.
Senamela and Khanye are challenging their dismissal in the Transnet Bargaining Council.
Now it has emerged that Abalozi — the former GNS, in which Nyanda’s family trust has a 45% interest — has taken the unusual step of approaching the South Gauteng High Court to set aside Cassim’s findings.
A copy of Cassim’s judgement obtained by the Mail & Guardian shows why. It exposes the highly suspicious circumstances surrounding the appointment of GNS and makes comments and findings that are damning of the company.
In their court papers Abalozi and its remaining director, attorney Sylvester Sithole, state: “After the inquiry was concluded, the findings of [Cassim] were brought to [our] attention … The applicants were alarmed and disgusted [at] the manner in which their names were disparaged, defamed and castigated by [Cassim] without just cause.
“The manner in which [Cassim] castigated the applicants’ names and misrepresented the facts was unfair and unjust.”
Abalozi and Sithole argue that while this was an internal hearing concerning TFR employees, Cassim had no right to make adverse findings about Abalozi when it was not given an opportunity to respond.
Cassim is, indeed, blunt. He sets out how, on July 17 2007, a tender was issued to render security services to TFR for two years, especially to combat cable theft syndicates.
Four companies were shortlisted and made presentations on August 31 2007. GNS did not bid.
As the tender award was being finalised, it came to an abrupt halt on October 15 2007.
According to the evidence, TFR was informed that one of the shortlisted bidders, G4, had already been awarded a contract to conduct an overall audit of Transnet security and could not be considered for the TFR contract.
In his findings Cassim notes: “If, indeed, this is a proper reason to disqualify one of the four short-listed … I would have thought that the best qualified candidate from the remaining shortlisted tenderers would then qualify to be awarded the tender.”
Instead, a contract was awarded to General Nyanda Security “on confinement”, a process normally followed in emergencies, when there is no time for the normal tendering process.
According to the evidence, GNS was asked to make a proposal and was “highly recommended based on its expertise, track record and national footprint”.
On about November 2 2007, Senamela signed the request to award the confinement. On November 7 the Transnet acquisition council supported the proposal and on December 5 Gama gave final approval.
But according to the evidence, already on November 22 Khanye told GNS it had been appointed as per a quotation of October 12 2007 and that agents should be deployed at the TFR offices the next day.
There was also evidence that various drafts of GNS’s proposal were found in Senamela’s office and that “no one could have prepared this without liaising … with someone from security”.
The contract period was December 1 2007 to December 1 2008.
As of April 1 2008 the contract was doubled in value and on August 13 2008 the Acquisition Council approved a contract value increase to R32,8?million.
The contract expired at the end of 2008 but, according to the findings, Senamela facilitated the continuation of services on a month-to-month basis for most of last year.
Award to GNS was irregular
The GNS directors at that time were Sylvester Sithole and General Siphiwe Nyanda.
Cassim lists the following “common-cause facts” showing that the award to GNS was irregular:
GNS was not registered with the Private Security Industry Regulating Authority when the initial contract was awarded. Cassim notes that “GNS applied for PSIRA registration on June 5 2008 … GNS … was not licensed to provide the services in respect of which it was handsomely rewarded, nor is there any indication that GNS could lawfully have entered into the first contract.”
Cassim states that, contrary to its contractual obligations, GNS was using sub-contractors to perform the work. And then, in a stinging comment, he notes: “Whilst I appreciate that in our newfound democracy the interest of black entrepreneurs must be promoted arising from past injustices, I am not prepared to accept that GNS, in whatever form it existed, should be the recipient of a contract and then sub-contracts its responsibilities, in this case, to Revert [Risk Management], and in the process earns a massive profit — this is not black empowerment but simply opportunism, which cannot be tolerated … Self-enrichment, on its own, is not good enough.”
“In the event, the value received by the employer from GNS is minuscule compared to the price it paid. This is the unchallenged evidence of Keeran Madhav, who conducted a forensic investigation … on behalf of Transnet.”
Cassim noted that TFR’s head of security technology, Kay Nayager, who was intimately involved in the operation of the contracts awarded to GNS, testified that during a night-time spot-check it was found that GNS was “not rendering the services in respect whereof it was paid … “
Noting that Senamela declined to testify, Cassim stated that “damning evidence against Senamela is the unchallenged evidence of Nayager, who testified that Senamela told him and Khanye that a decision had been taken, prior to the confinement, to use GNS and that it had been approved by the chief executive, referring to Mr Gama. Nayager further testified that Senamela threatened him with suspension, should he not go along with the … second contract awarded to GNS.”
In its papers Abalozi says Cassim’s remarks are so excessive, he “could not have been motivated by anything other than an ulterior purpose”.
“His remarks are not supported by any facts. He makes sweeping statements against the applicants, which shows that he was acting arbitrarily and capriciously …
“Had [Cassim] approached the applicants, he would have been given sufficient information and documentation which would demonstrate that the first applicant is a reputable company in the security industry and has partnered with international companies and has been involved in the United States … where it rendered its services.[Cassim] deemed it not necessary to establish these basic facts.”
Cassim and Transnet are still to file a response.
Siphiwe Nyanda’s GNS firm << discussion