The SA Reserve Bank (SARB) has managed to find only about R223,000 in bank accounts of a businessman accused of plundering contracts worth R160 million from state-owned rail, logistics, port and pipeline company Transnet.
Sipho Victor Sithole and his Rooihuiskraal, Tshwane-based company IGS Consulting Engineers, of which he is the sole director and shareholder, face charges of channelling secret profits totalling R26.4m to former Transnet Capital Projects (TCP) chief executive Linyenga Makainene Herbert Msagala.
According to the police’s Directorate for Priority Crime Investigation, the Hawks, Msagala was influential in the implementation of Transnet’s procurement policy manual and supply chain code of ethics, pressured directors of a company that won a lucrative contract to appoint IGS Consulting Engineers to conduct investigative work instead of the usual subcontractors.
IGS Consulting Engineers was knowingly appointed by Phumlani Kubheka, who was a project manager for various Transnet projects, through a joint venture with another company called Turnmill ProQuip Engineering despite their lack of proper Construction Industry Development Board grading, which resulted in fruitless and wasteful expenditure.
The contracts netted IGS Consulting Engineers over R160m, according to the Special Investigating Unit (SIU) and Transnet.
Sithole was arrested in November last year at the South Gauteng High Court, where he was challenging the SIU report that led to the preservation of his assets.
Fundi Tshazibana, deputy governor of the SARB’s Prudential Cluster, this week gave notice of the decision to forfeit to the state about R230,000 held in ten different accounts by IGS Consulting Engineers and Sithole.
IGS Consulting Engineers had just over R91,500 in two bank accounts held at Absa and FNB while Sithole had more than R131,200 in eight Absa, Sasfin, Capitec and FNB personal bank accounts.
The payments to Msagala included more than R15.6m through cash cheques from IGS Consulting Engineers’ bank accounts paid to him (Msagala) or the Msagala Investment Trust.
Msagala also received four cheques of R500,000 (totalling R2m), which were issued by IGS Consulting Engineers and reflected his details on their reverse and another three cheques totalling R1m issued by the company with the details of his bodyguard, who acted on his instructions.
The funds included R4m deposited in the tranches of R999,999.99 each and R950,000 from IGS Consulting Engineers of which R550,000 was deposited to Msagala’s account and R400,000 retained as hard cash.
In August 2021, the Special Tribunal authorised the SIU and Transnet to recover the R26.4m from Msagala, Roberto Jorge Medonca Velosa, both in their representative capacities as trustees of the Msagala Investment Trust, the Msagala Family Trust, and the Msagala Residence Trust, IGS Consulting Engineers and Sithole.
The SIU’s probe into Msagala, IGS Consulting Engineers and Sithole’s dealings uncovered that the former executive, who was TCP boss between September 2014 and May 2016, used some of the funds to register several properties, valued at R15.2m.
The properties were registered between September 2015 and March 2016 while two were registered in his daughter’s name.
Six properties purchased by Msagala for R15.2m without financing are listed as vacant stands in the exclusive residential estate Steyn City in Dainfern, Johannesburg, a Rondheuwel property for R4.56m, which was paid for through R3.6m and R1m transferred over three weeks between April 2016 and May 2016, another R1.46m property in Bedworth Park on the banks of the Vaal River in Gauteng as well as Farm 336 Meddilin for about R1.2m.
Msagala also bought two properties in Phuthaditjaba and Harrismith in the Free State for R200,000 and R840 000 in October 2015 and November 2015 respectively.
It also emerged that around the same period, Msagala purchased 35 vehicles between February 2016 and January 2017 and registered them in his family members’ names and the Msagala Family Trust.
Msagala and Kubheka are currently out on R60,000 and R20,000 bail respectively, after appearing before the Johannesburg Specialised Commercial Crimes Court late last year and he faces multiple charges of fraud, corruption, theft and money laundering.
They are expected back in court next week while Sithole and his company appeared in court last month to face charges of “collusion and plundering of tens of millions of rands from Transnet … in violation of the Prevention of Organised Crime Act”, according to the Hawks.
Hawks spokesperson Captain Lloyd Ramovha did not respond to questions on whether Sithole was released on bail after his arrest and whether he will join Msagala and Kubheka in the dock next week.