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#StateCaptureInquiry Dr Popo Molefe has been sworn in and confirmed his statement, save for a small correction. Advocate Paul Pretorius SC asks Molefe on Tau Morwe’s status. “The board decided it would not extend his contract,” he says.
#StateCaptureInquiry Molefe says the #Transnet board took a view that there was nothing to defend in terms of Morwe. “We also took the view that in making this full disclosure, therefore, we would endeavour to be as honest as possible,” he adds.
[SUMMARISED] #StateCaptureInquiry Molefe says that unless Morwe embraced the perspective of the board of full exposure @StateCaptureCom and that there was nothing to defend, then his contract would not be renewed.
#StateCaptureInquiry “I could not believe him,” says Molefe citing good governance and responsible use of public funds. He speaks about his involvement in the struggle for freedom and restoration of the dignity and human rights of all South Africans.
#StateCaptureInquiry Molefe speaks of the Freedom Charter as a democratic documents compiled by South Africans of all races and contains the cardinal principles, providing a vision for a new South Africa.
#StateCaptureInquiry Molefe speaks of the tenet in the Freedom Charter on sharing the wealth in South Africa and he say he saw, for instance at Transnet, small cliques or groups appropriating public funds, which is not what the Freedom Charter promotes.
#StateCaptureInquiry "When I was told "come, help us at Transnet' I didn't consider it only to be an honour but it was a rare opportunity for me to join those who are working selflessly to turn around this vehicle [...] and serve," says Molefe.
Molefe lists the many facets of #Transnet and cites its regional significance. These include:
• moving goods including export products like iron ore, manganese and coal
• energy pipelines
• engineering (maintenance and manufacturing)
• port terminals
• a huge property base
#StateCaptureInquiry On his task on arrival, the context in which he arrived, Molefe mentions President Cyril Ramaphosa and the “New Dawn” before asking what is it? He says it’s a recognition of wrongs of the past we spent many years denying, Ramaphosa introduced a new paradigm.
#StateCaptureInquiry Molefe says that there was a systematic weakening and destruction of vital entities of State. “Corruption had become endemic,” he says.
#StateCaptureInquiry Pretorius asks why a “New Dawn” is necessary and what happened at #Transnet. Molefe turns to 2011 and the appointment of Brian Molefe as Acting Transnet CEO and speaks of this being forecast in the Gupta-owned ‘The New Age’ newspaper in late 2010.
Molefe: For money to flow to friends, systems must be weakened, governments must be flouted, laws must be ignored and the skills base of a company like Transnet must be weakened. He says the people introduced have the “veneer” of skills and training but lack ethics and morals.
Molefe says that this is a “sophisticated operation” and describes, on arrival at Transnet, learning that contracts would be signed by a single person and confinement was used when it was not appropriate. Confinement allows for contract deviation under specific circumstances.
#StateCaptureInquiry Zondo reflects Molefe’s claim on the former Transnet board allegedly delaying renewing contracts in order to engineer a crisis, “When the contract is about to expire they say, ‘This is urgent.’” Molefe confirms this is an accurate summary of his point.
#StateCaptureInquiry Molefe describes Transnet as a complex and big organisation with many problems shared in the media, they thought it best to appoint an insider to lead the organisation, so Morwe became an appropriate candidate considering his seniority & 17 years at Transnet.
#StateCaptureInquiry Molefe describes the #Transnet board as multi-disciplinary, populated by hardworking and ethical people, who he claims are selfless and give many hours to their duties even though they are not being paid for this work.
#StateCaptureInquiry Molefe says the board provides strategic direction and oversight. He has described the establishment of Transnet International Holdings in 2017 to explore trade and economic development opportunities on the continent.
#StateCaptureInquiry Molefe says that Transnet is active in Ghana, Kenya, is working with Zimbabwe to revive rail freighting of mining goods, he says that in economically growing Botswana they are working to link rail networks with the terminal in Richards Bay.
#StateCaptureInquiry Molefe: The first time I went to Parliament the Portfolio Committee refused to listen to us ‘cause Mr Gama was there. They refused to listen to Transnet until Transnet dealt with the issues of corruption and taken action against those accused of wrongdoing.
#StateCaptureInquiry “The refusal to open up was influenced by the fact that there was this denial in Transnet of a accepting of the capture of the business [...] they [management] sought to explain things differently,” says Molefe.
#StateCaptureInquiry Zondo raises a point on determining what people (such as those in Parliament) with responsibilities to halt wrongdoing did or did not do, why they acted so, and where this may link with state capture.
Molefe says while he was working at Prasa we found that there were some in Parliament on the portfolio committee who appeared to be lobbied by those committing corruption. He says he compelled the Hawks to act and find out why they did not fulfill their constitutional mandate.
#StateCaptureInquiry Molefe says that elements of state Capture were incipient in that committee and they saw they were starting to spread. He claims there is a different tone now before speaking about the intimidation to which lower management officials could be subjected.
Molefe says there is a “clear pattern of how the capture was implemented” and it starts with capturing the key decision maker, then identifying all key strategic decision makers (especially involved in budget allocation). They include the Group CEO, CFO and Treasurer, inter alia.
#StateCaptureInquiry Proceedings adjourn for tea. They are set to resume at 11:30.
#StateCaptureInquiry Proceedings resume. Pretorius refers to Molefe’s mention in his statement of the “weakening of governance systems” in Transnet and asks for an example. Molefe says at one level you erode the skills.
#StateCaptureInquiry Molefe continues, saying those committed to advancing state capture at SOEs would bring in and surround themselves with cronies and seek to turn those remaining who are not capture into cronies. When there is a resistance, they are made redundant.
Molefe names an engineer (whose first name is Richard, whose surname I don’t yet know how to spell) who worked at Transnet for some 21 years as an example. He then speaks of a group of friends operating outside governance structures acting as a screening house, hiring and firing.
#StateCaptureInquiry McKinsey, says Molefe, is an internationally recognised company that was - until recently - impeccable but @McKinsey “got embroiled” at Eskom and Transnet.
#StateCaptureInquiry “Reputable companies are brought in and then they get harnessed [...] into a process that facilitates the siphoning of funds,” says Molefe after speaking of @McKinsey during his evidence @StateCaptureCom.
#StateCaptureInquiry Molefe testifies that this Transnet engineer was replaced with a teacher who lacked the requisite skills.

#StateCaptureInquiry Molefe speaks of someone in a senior position like Acting CFO to collude with consultants to make certain treasury positions in Transnet redundant, and then outsource those functions to the consultants’ firm, making billions in the process.
[SUMMARISED] #StateCaptureInquiry Molefe: They sell their reputation and their integrity on the altar of making money, and their future, all at the cost of the country.
#StateCaptureInquiry Referring to Molefe’s papers Pretorius notes Molefe’s mention of “total paralysis” at Transnet at a “horror show” he found on arrival at the SOC.
#StateCaptureInquiry Molefe says it is not an exaggeration to say that the board he leads was shocked at the scale of corruption and disregard for the rules members found on arrival at #Transnet @follow_transnet.
#StateCaptureInquiry Molefe cites the Neotel confinement as an example of the rampant disregard for the rules and the state of paralysis that had set in at #Transnet. He says the way money would be siphoned off with nothing done to stop it represents what he calls a horror show.
#StateCaptureInquiry Again, on the "horror show" at Transnet, Molefe says "it looked more like a movie or a theatre show in which the protagonists were the main actors" before citing an example of land in Durban Transnet bought from Acsa that was secretly occupied by businesses.
Molefe says the land was bought for R1.9-billion but construction on the site was halted due to an economic downturn. During a board roadshow they visited the site and found businesses on the land, including a tile cutting workshop, events management business and restaurant.
#StateCaptureInquiry He says that the then Acting CEO and others "pretended they did not know" there were people were running businesses on the property and reports that Transnet was not receiving rent. Molefe claims Siyabonga Gama later confessed to knowing about the occupants.
#StateCaptureInquiry Molefe singles out former CEO Brian Molefe, former CFO Anoj Singh and Gama, saying that they signed for some of these big, irregular contracts including deviations and confinements. He describes Salim Essa as a "darling of the Guptas" who worked with them.
#StateCaptureInquiry Molefe says that Transnet was treated like a piggy bank, like the one little kids play with, with money being put in and taken out, though he thinks more money was taken out of it.
#StateCaptureInquiry Molefe speaks about people who either left in disagreement with what was occurring at Transnet or were made redundant, he says "we are in the process of bringing them back" before referring to the Neotel contract as an instructive example of what went wrong.
#StateCaptureInquiry Molefe says there were reprisals and disciplinary processes were initiated to intimidate those who flagged the Neotel deal. He has spoken about a fearful, unquestioningly obedient, and military style culture which the board is, he says, seeking to reverse.
#StateCaptureInquiry "It is very difficult [...] now we have got to turn that around if we are going to unchain the creativity, innovation and talent," says Molefe on changing the culture at #Transnet.
#StateCaptureInquiry Zondo draws a similarity in the evidence he has heard from Molefe on people leaving Transnet in disagreement with evidence he heard from Johan Booysen on those in law enforcement leaving in disagreement.
#StateCaptureInquiry Molefe says that when the President appointed Berning Ntlemeza to Head the Hawks, Ntlemeza got rid of good people and this impacted complaints he had made to the Hawks on Transnet corruption.
#StateCaptureInquiry "There is a correlation between what we have painted here and what has happened with these law enforcement agencies," says Molefe. Zondo notes Molefe's comments are based on first-hand dealings with the Hawks. Molefe agrees, says he sat with Ntlemeza's deputy
#StateCaptureInquiry Molefe says cases opened over alleged Transnet corruption were purposefully thwarted; he accuses law enforcement of purposefully failing to gather sufficient evidence, pursuing minor transgressions while ignoring wide-scale, clear cases of corruption.
[COMMENT] #StateCaptureInquiry Here we see the convergence of intently weakened state entities, from law enforcement agencies to Transnet.
Molefe replies to a question of whistle-blowers and reports that significantly people inside and outside #Transnet are coming forward with information, he think it augers well for the process of changing the institution, rebuilding the institution and restoring public confidence.
#StateCaptureInquiry Molefe speaks now about the 1,064 locomotive deal between Transnet and China South Rail. The confinement was originally with Mitsui, says Molefe, but then "China South Rail entered and things changed" and shifted, it was not in compliant with policy.
#StateCaptureInquiry Molefe says the conclusion was that Molefe, Singh and Gama had failed in issuing their fiduciary duties in the acquisition of 100 locomotives from China South Rail. "Willfully people would just ignore the rules," he adds. Proceedings adjourn for lunch,
#StateCaptureInquiry Before the adjournment, Molefe reported that Brian Molefe, Singh and Gama authorised an increase in the cost of the locomotives, from R3.8-billion to R4.4-billion. He says he is told Transnet lost between R3.47-million and R6.2-million per locomotive.
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