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R/€ = 16.18 Change: 0.13
R/$ = 14.23 Change: 0.12
Au 1410.75 $/oz Change: -22.56
Pt 816.86 $/oz Change: 3.85
 
 
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Transnet promises to fill executive vacancies as Mahomedy is appointed new acting CEO

2nd May 2019 BY: Terence Creamer
Creamer Media Editor

State-owned freight logistics group Transnet has appointed Mohammed Mahomedy as acting group CEO after its board decided not to extend the six-month contract of Tau Morwe, beyond Friday, May 3.

Mahomedy, who has worked with Transnet for more than 12 years, has been acting CFO for the past 12 months.

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In the position, he played a central role in convincing certain debt providers not to withdraw funds after the group’s 2018 financial results were qualified, owing to insufficient evidence that the information on irregular expenditure was “complete and accurate”.

Irregular expenditure for the year surged to R8.1-billion, from less than R700-million in the prior year and the figure is expected to rise even further in 2019, after Transnet declared the R49-billion contract for the acquisition of 1 064 electric and diesel locomotives “irregular and unlawful”.

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After the 2018 results were published, Transnet set up urgent processes to ensure that the qualification did not trigger an immediate recall of bonds by several debt providers. These processes will be sustained should the 2019 financial statements again be qualified.

Morwe, who is also a Transnet veteran, was brought out of retirement in November, following the dismissal of Siyabonga Gama in October, after Gama failed to meet the board’s deadline for the submission of reasons as to why his contract should not be terminated.

The axing of Gama represented the highest-profile board intervention undertaken as part of a broader executive cleanup at a corporation shrouded in allegations of corruption and ‘State capture’.

In a statement, the board acknowledged the “good work” done by Morwe in pursuit of operational efficiencies, as well as the reorganisation of Transnet and committed to continuing with the programme.

“The stability of the organisation remains a key focus of the board and this appointment was made with this in mind, giving consideration to Mahomedy’s experience at Transnet over a period of more than 12 years.”

Transnet said it would seek, in the coming months, to fill critical vacancies at executive level, including those of the CEO and CFO.

In the interim, however, Transnet will have to appear, in early May, before the Commission of Inquiry into State Capture being chaired by Deputy Chief Justice Raymond Zondo.

It is anticipated that the so-called ‘10-64 contracts’ will feature during this testimony, in light of revelations that the contract value was inflated, partly as a result of the role played by Gupta-family-linked companies as intermediaries in the securing of certain contracts.

Transnet is also pursuing several criminal and civil cases against organisations and individuals implicated in corruption at the business in recent years, including former CEOs Brian Molefe and Gama, as well as former CFO Anoj Singh

EDITED BY: Creamer Media Reporter
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