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Transnet: irregular expenditure soars from R629m to R8.1bn

Source: Fin24

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Suspension notices have been handed out to three Transnet executives due to a huge gap in irregular expenditure within the company. The company however seems to be working well operationally as their revenue and profit are increasing.

Transnet recently triggered an audit due to irregular expenditure. The expenditure went from R692 million to R8.1 billion. It was said that this is due to transnet reviewing contracts from the past and realising the procurement problems from this process.

The CFO Mohammed Mahomedy stated that in 2018 their reporting processes have become a lot stricter, however he cannot reflect on previous years as he has only recently been appointed.

Three executives came into question when Transnet released their financial results: Siyabonga Gama (CEO), Thamsanqa Jiyane (chief advanced manufacturing officer) , Lindiwe Mdetshe (supply chain manager). These executives risk being suspended if they do not provide reasons for why they should not be.

A breach in the Public Finance Management Act is what caused the irregular expenditure increase. Transnet suppliers have been paid by third parties and this has led to the company being labeled as corrupt. Several investigations are currently in progress.

The largest corruption allegation sparks from Transnet purchasing R54 billion worth of locomotives from China South Rail which has Gupta links.

Transnet will be working on procurement and has drawn up a plan to present to the board on how to possibly receive a clean audit. The executives have been given till Friday to provide their reasoning. They believe that their fate has already been predetermined.