Transnet on Monday reported a significant increase of
irregular expenditure to R8.1bn in 2017/2018, up from R692m in the previous
financial year, triggering a qualified audit.
Chief financial officer (CFO) Mohammed Mahomedy told Fin24
that the sharp rise in irregular expenditure was due to the company reviewing
contracts from as far back as 2009 and identifying the procurement issues in these
Mahomedy said the company adopted stricter reporting
processes for 2018 but he could not comment on previous years as he was only
appointed CFO in May.
The state freight and ports company released its financial
results in Kempton Park with a cloud hanging over three executives – CEO
Siyabonga Gama, chief advanced manufacturing officer Thamsanqa Jiyane, and
supply chain manager Lindiwe Mdetshe who have until Monday afternoon to explain
to the board why they should not be suspended.
At the results presentation Mahomedy explained that the
increase in irregular expenditure was due to breaches in the Public Finance
Management Act (PFMA) relating to procurement.
Siyabonga Gama acknowledged that the state-owned company’s
(SOC) reputation has “suffered” around allegations of corruption and said that
most of these issues relate to third parties being paid by Transnet
He said that more than 22 investigations are currently
underway and the parastatal is working with the Special Investigating Unit
(SIU) and the Hawks.