Sue board members for SOE losses, says Justice Zondo

Deputy Chief Justice Raymond Zondo. Picture: Nhlanhla Phillips/African News Agency (ANA) Archives

Deputy Chief Justice Raymond Zondo. Picture: Nhlanhla Phillips/African News Agency (ANA) Archives

Published Feb 26, 2021

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Johannesburg - Deputy Chief Justice Raymond Zondo wants board members to be held accountable for losses incurred by the state-owned entities they led.

Justice Zondo has asked the commission of inquiry into state capture to go after former Passenger Rail Agency of SA (Prasa) non-executive directors who oversaw the awarding of a R3.5 billion contract to buy 88 locomotives from businessman Auswell Mashaba’s Swifambo Rail Leasing despite the company not qualifying for such a deal.

”The way this contract was handled, it does appear that the interests of Prasa were subsidiary to something else. It’s very worrying,” noted Justice Zondo.

He asked evidence leader advocate Vas Soni how much of the R2.68bn Prasa paid to Swifambo Rail Leasing and its parent company Swifambo Rail Holdings has ever been paid back.

Soni said it was only R63 million, according to the companies’ liquidators.

Justice Zondo said Prasa should “investigate the possibility of suing everyone who made decisions that resulted in these losses, in circumstances where these individuals cannot give proper explanations for their decisions”.

The country’s second most senior judge continued: “They should explain to Prasa, if their explanations are not satisfactory, then Prasa should consider suing them because this is a lot of taxpayers’ money”.

Soni said the details of the looting at Prasa has given him sleepless nights.

The commission heard that former Prasa non-executive director Dr Bridgette Gasa expressed her concerns about Swifambo Rail Leasing’s capacity in e-mails to the board chaired by now ANC MP and former deputy finance minister Sfiso Buthelezi.

Justice Zondo requested the commission’s legal team to explore the possibility of asking Gasa to prepare an affidavit and explain the concerns she had about Swifambo, the discussions of the board and its response.

He also wants the commission to obtain the minutes of the board meetings in which she raised these concerns and whether there was a proper and serious consideration to the issue she raised.

”These e-mails are very critical for all those they were directed to. It might be that these issues were also raised in certain board meetings so everybody who was a board member knew what the issues were,” said Justice Zondo.

He explained that Buthelezi should come and give his account of what he did or did not do about the concerns raised by Gasa as Swifambo Rail Leasing had neither the track record nor capacity.

According to Justice Zondo, ex-Prasa chief executive Lucky Montana should be coming to give evidence before the commission in due course.

Justice Zondo said one of the things the commission is looking into is where boards of state-owned entities did not do their jobs properly and what must be done to correct this.

”Was it a matter of incompetence or could it be that the board or some members of the board were party to some agenda which was against the interests of the entity?” he asked.

Justice Zondo believes it is important as it may well be that he could consider that subject to issues of prescription and others, state-owned entities should sue board members to recover whatever they can of taxpayers’ money.

”The commission will also have to look at what qualities should people who get appointed to be directors of these state-owned entities have because it must people who have integrity, are prepared to make decisions that are in the interests of the entity and not other decisions,” he added.

loyiso.sidimba@inl.co.za

Political Bureau