Transnet sues former executives over locomotive tender

Transnet has taken legal action against a number of its former executives over a controversial locomotives tender, the City Press reports.

On Friday, the company sent subpoenas to former CFO Anoj Singh, former group treasurer Phetolo Ramosebudi, former group CFO Garry Pita, and former CEO Siyabonga Gama.

Transnet is demanding that its former executives pay back the money which they received for awarding the tender to Gupta-linked companies and inflating its cost from R38.6 billion to R54.5 billion.

The company also sent subpoenas to the Gupta-linked financial services company Regiments Capital.

Transnet has demanded that its former executives and Regiments Capital pay back the sum of R189 million, and is also seeking interest to be paid on the total amount owed.

The defendants have been given 10 days to oppose the lawsuit, although the Gupta-linked companies are reportedly aiming to reach an out-of-court settlement.

Claims and settlements

Sources told the City Press that Regiments Capital and Trillian Capital are negotiating a settlement with Transnet, with discussions already underway.

In Transnet’s main claim against Regiments Capital, it stated that the board became aware of a R151-million overpayment.

In its alternative claim however, Transnet alleges that Regiments Capital, Gama, Singh, Ramosebudi, and Pita colluded to defraud the company of R151 million.

Transnet will reportedly also file a lawsuit against Gupta-linked manufacturer China South Rail, which received most of the tender amount and was tasked with building the locomotives.

While Transnet issues lawsuits over its controversial locomotives tender, it will also need to pay or defend a damages claim from a boat builder after accidentally spray-painting a R150-million yacht.

In conducting dry dock operations in Cape Town, Transnet accidentally sprayed the superyacht with anti-fouling spray, causing the boat’s manufacturer, Southern Wind, to file for R2.5 million in damages.

Now read: Vodacom’s Transnet tender approved by High Court

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Transnet sues former executives over locomotive tender