'R5bn cover-up' an attempt to discredit Transnet

Friday, December 4, 2009

Pretoria - Transnet acting chairman Geoff Everingham has labeled as misleading a media report which alleges the transport parastatal is in a R5.4 billion cover-up.

"Based on the inaccuracies in the 27 November article, it is clear that there is a well-orchestrated campaign being mounted by anonymous employee(s) to bring the company into disrepute.

"This appears to be part of a campaign to discredit company processes, including its internal audit function, and divert the public's attention from the conduct of some individuals," said Everingham.

The board of directors said it will continue to uphold the highest standards of corporate governance and will investigate and take action against any Transnet employees found not to uphold these standards.

The article in Business Report said Transnet had overspent R5.4bn on its capital expansion programme and then tried to cover this up. Transnet is also alleged to have extended its internal auditing period contract without following the right procedures.

"It is quite clear that the allegations are based on a fundamental, yet elementary, misconception: that the schedules published by the newspaper reflect amounts actually spent. This is incorrect. Instead, it shows forecasts to completion on a number of our major contracts. The contracts are incomplete," said Transnet.

The parastatal further said that it has in place a detailed approvals framework and a policy to ensure that due process is followed at all times.

The board also expressed its confidence in the company's executive management team that has seen the parastatal weather the economic downturn.

"The company's performance to November 2009 is especially robust: revenues are up by 5.3% on last year's comparable numbers; costs are well under control; profits, as measured through earnings before interest, depreciation, tax and amortisation, are 12 % ahead; and cash generated by operations is strong," said Transnet.