Transnet Board Terminates Group CEO’s Contract

The board of Transnet SOC Ltd has terminated the employment of Group Chief Executive Mr. Siyabonga Gama, bringing to an end a protracted dispute over a breakdown in trust and confidence between him and the board.

The decision was taken by the board of the state’s Rail and Freight Company on Saturday 20 October 2018, and communicated to Mr. Gama on Sunday 21 October 2018.

Mr. Gama’s last working day was on Monday 22 October 2018. Mr. Gama was informed on 1 October 2018 of the reasons for the breakdown in trust and confidence and given until 15 October 2018 to provide reasons why his appointment as GCE should not be terminated.

“You failed to make representations by the expiry of the time for making representations on 15 October 2018 or thereafter,” the board informed him on 21 October 2018.

“As a result of your failure to make representation, the Board has resolved to terminate your appointment as Group Chief Executive on 6 months’ notice. You are not required to work out your notice period and will be paid 6 months’ remuneration in lieu of notice.”

This is in line with the terms of Mr. Gama’s contract.

In its resolution adopted on 19 October 2018, the board noted that Mr. Gama had approached the Labour Court on 12 October 2018 instead of making his representations to Transnet.

“The (Labour Court) judgment provides that Mr. Gama’s application is stayed pending a referral to arbitration as contemplated in clause 19.1 of the employment contract.”

However, “in terms of the judgment, the board is not prohibited from taking a decision arising out of failure by Mr. Gama to give reasons why his employment should not be terminated”.

Commenting on the decision, Transnet board chairman Dr. Popo Molefe said: “As a board, it is essential that the relationship between the board and the head of its management team is based on trust and confidence.

“We value and require transparency, accountability and expenditure that is cost-effective and value for money. But we have found Mr Gama’s conduct – particularly during the investigation into the tender for new locomotives, with an inexplicable increase in excess of R9-billion in costs — to be incompatible with that culture.

“This has led to a loss of trust and confidence in Mr. Gama’s ability to manage Transnet at the highest level.”

Dr. Molefe added: “President Cyril Ramaphosa has made it clear that decisive interventions are needed to stabilize and revitalize state-owned companies — and that is precisely what the Transnet board is doing.

“We have acted in accordance with the President’s directive, as well as in line with Public Enterprise Minister Pravin Gordhan’s call for sound financial and business management at state-owned companies, coupled with good governance.

It is critical that we ensure Transnet fulfils its economic and developmental mandates, and it is clear that a new executive head is needed to ensure this happens.”

The process of appointing an interim CE will be announced during this week.

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