The judicial commission of inquiry into state capture continues with more Transnet-related testimony from former group treasurer Mathane Eveline Makgatho.

Transnet’s former group treasurer Mathane Eveline Makgatho will continue her testimony on Friday at 09:30.

Makgatho says they started thinking around the financing of locomotives from as early as the first quarter of 2013/2014.

Despite many memos drafted for the Group CFO, no memo was signed.

Only with the passing of time where a trend was noticed where other memos were signed and acknowledged.

Memos regarding financing and financial risk management part always got lost or were never signed.

Makgatho says the minister was not happy with the process of negotiating the cooperation agreement. We didn’t have time to adequately consult with the DPE. Seniors were not sure why the DPE was concerned that they weren’t consulted.

Then minister of Public Enterprises wrote and asked that clauses 2.1 and 2.2 be amended.

Mining companies and banks were there (Union Buildings), many agreements were signed. It was a big South Africa – China moment, Makhatho tells the inquiry.

“We thought that this clause doesn’t do any harm to us and we have proved that ECAs provide cheap funding. The DPE was very unhappy and they said they didn’t like the clause and suggested a change,” Makgatho says.

All of the above will be achieved without compromising on sound governance… “It was important to record this so that it was clear it merely records willingness of parties to cooperate in future,” Makgatho says.

Before Makgatho goes into detail about the next part of her testimony – involving Transnet, China South Railway, and the China Development Bank – the short adjournment is called. 

Proceedings resume at 16:00, and are expected to carry on until 17:00.

Makgatho’s testimony now moves on to the next “unsolicited” proposal, this time involving McKinsey.

Makgatho says she went to Brian Molefe and asked him why he gave Singh “so much power” within Transnet. Makgatho says she told Molefe it’s a “ticking time bomb” and Molefe told her that Singh “would be managed”… 

“With Mr Singh, because he’s very reckless, I could immediately establish that he’s a very corrupt guy,” says Makgatho. “But now with Mr Molefe, as I indicated earlier on, he’s a smooth operator; he’s very street smart. He plays his balls very carefully, he makes people feel important. So, I could not immediately establish that he was part of the mess.”

Molefe now directs Makgatho’s evidence to the third unsolicited proposal, which Makgatho describes as “a shocker of note”.

Makgatho says shortly after the call from Nedbank, she received a proposal from Singh in hard copy.

Makgatho tells the commission about a call she received from a relationship manager from Nedbank, “asking me if Transnet is looking for money”… 

Makgatho: “I was taken aback a little bit, because if Transnet was looking for money, I was the one who’s supposed to know that. So I was like, ‘I don’t know, and in actual fact we are okay, we don’t need money right now’…”

Makgatho: “And his response was that, that’s what he thought. Because I haven’t said anything, we had an open line with banks, we’d call them any time we needed to. And he told me that Regiments was in the market, looking for money, on behalf of Transnet. And he mentioned a number of around R9-billion – he said he understands that Transnet is looking for money.”

Makgatho says that Transnet did not need money at the time, as they were cash flush and in a very comfortable position financially. “We were not short of cash, and we were not short of options.”

Makgatho details the payments made to Regiments and McKinsey by Transnet and says that she was “shocked” to discover that between “R600-million to R700-million” was paid to these two institutions over a short period of time.

Makgatho relates an instance where they brought her a final draft document and asked her to sign, and she responded by saying that she was not able to sign off a contract where she was “not party to the negotiations, because I was reluctant to sign off something that I was not privy to”… 

Makgatho says she responded and said she can’t provide a green light from a treasury perspective, and “suggested that he ask Anoj to sign off”. 

Makgatho says Singh eventually agreed with her that under the circumstances “it will be better if the group CFO signs off” and that’s where they left it. 

Back from the lunch break, Zondo announces that today’s proceedings will carry on until 17:00, with a short break just before 16:00. 

Advocate Molefe now continues leading Makgatho’s evidence.

Zondo calls for the lunch adjournment. Back at 14:00.

Makgatho reads from an email to Singh, dated January 31, 2014, after she had spent a week in the data room. 

“Our engagement with Regiments,” Makgatho starts. “I’m not sure how to engage with Regiments on this project, given the fact that you mentioned during our 15 January call, that I should not worry about the terms of reference, as they are not relevant, and I should not link the deliverables to the budget.”

“I understand your point that they are your advisers and not mine, and they are merely advising you through me, but without a clear understanding of how our relationship with Regiments is governed, and how expected deliverables are supposed to be managed, and measured against the terms of reference timelines and budget, this makes my job extremely difficult. I will appreciate clarity on their mandate, so that we can proceed smoothly.”

Makgatho says that Singh then replied to her email on the 3rd of February 2014, saying thanks for the note, but “please don’t contact any suppliers at this stage”.

Molefe asks Makgatho if she ever sought clarity, in writing, from Anoj Singh about the involvement of Regiments… Makgatho says yes, she did.

Makgatho details more instances where she was not invited to meetings, which she should have been invited to by all rights, as Transnet group treasurer.

Makgatho says she came across a red flag in the tender documents, where she saw the same name appear two or three times in separate bidding documents, in the BEE section. She remarked to a colleague that it was highly irregular. Makgatho tells Zondo that she didn’t know at the time that the colleague she had flagged this with – Garry Pita – would eventually become Anoj Singh’s “enabler”. 

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