Read:<\/strong><\/p>\n Homix is little more than a letterbox; an apparent front for persons undeclared.\u00a0 A former senior Gupta employee<\/a> has been linked to Homix, but the politically well-connected family\u00a0has distanced itself from him and denied having a relationship with the company.<\/p>\n Neotel\u2019s board commissioned an investigation into the payments after the company\u2019s auditors blew the whistle to it in April. Neotel said after last week\u2019s expos\u00e9 that its chief executive and chief financial officer had \u201ctaken special leave in co-operation with this investigation\u201d.<\/p>\n Transnet, whose chief financial officer, Anoj Singh, is also entangled in the matter, has denied impropriety. Singh has been seconded as of this month to\u00a0 navigate Eskom out of the fiscal doldrums.<\/a><\/p>\n Phases Now it has emerged that Transnet has awarded two more large projects \u2013 closed-circuit television (CCTV) systems worth R835-million \u2013 to Neotel without tender and while Neotel was interacting with Homix.<\/p>\n The first project, or \u201cphase one\u201d, was worth more than R329-million, according to a Transnet memorandum seen by amaBhungane. It entailed installing and maintaining CCTV networks at six ports controlled by Transnet.<\/p>\n Brian Molefe, the chief executive at the time, approved the \u201cconfinement\u201d of this contract to Neotel in May\u00a0last year.<\/p>\n ‘Impractical’ Molefe, the memorandum says, recommended the confinement of \u201cphase two\u201d, worth R505-million, to Neotel on February 20 this year. This was to install high-tech cameras and roll out the CCTV network to two more ports and the head office in Johannesburg.<\/p>\n Molefe\u2019s phase two motivation was followed by board procurement committee approval, Transnet issuing a request for a proposal to Neotel, the latter submitting a proposal and Transnet evaluating it \u2013 all in a matter of weeks.<\/p>\n Molefe approved the award to Neotel on March 30, a day before financial year-end.<\/p>\n The timing played into some \u00adcontroversy at Neotel. The latter\u2019s auditors, Deloitte, said in internal correspondence that Neotel management allocated revenue from the phase two CCTV project to the year that ended on March 31, although the transaction was incomplete.<\/p>\n ‘Aggressive’ tactic The phase two transaction seems headed for a storm at Transnet too. The memorandum seen by ama-Bhungane is a request to Siyabonga Gama, the acting chief executive, to sign the contract with Neotel to give effect to the March 30 award.<\/p>\n Written by Singh, the chief financial officer, and procurement head Garry Pita, it is endorsed by a who\u2019s who of Transnet brass. But Gama, who took over when Molefe left in April to be chief executive at Eskom, appears reticent. A Transnet insider said this week: \u201cGama has not signed \u2026 and I doubt he will.\u201d<\/p>\n The failure to sign the contract after making the award may leave Transnet exposed to litigation by Neotel, but this would drag the affair further into the public domain.<\/p>\n A key question is whether Homix was paid commission on the CCTV transactions too, again raising the possibility of kickbacks. Deloitte correspondence seen by amaBhungane recorded Neotel management as saying that \u201cthere is no fee payable to Homix\u201d on these deals. Deloitte asked each Neotel board member to confirm this in writing, but their responses are not known.<\/p>\n AmaBhungane is aware of evidence suggesting an approach to a Neotel subcontractor in April last year to pay a fee to Homix in respect of CCTV cameras for Transnet. It came three weeks after Neotel\u2019s first known payment, of R30-million, to Homix. This was to secure the purchase by Transnet from Neotel of telecommunications equipment worth R300-million apparently unrelated to the CCTV cameras.<\/p>\n Molefe\u2019s approval of the phase one CCTV confinement came a month later, on May 25 last year.<\/p>\n ‘Business consultancy agreement’ Molefe\u2019s recommendation for the phase two CCTV confinement was on February 20 and Transnet\u2019s board procurement committee approved it on February 23.<\/p>\n This week Molefe denied these events were connected, saying: \u201cI\u2019m hearing about Homix from you. I didn\u2019t know anything about Homix.\u201d<\/p>\n Molefe defended Transnet\u2019s award of the CCTV work to Neotel without tender. He said that after he arrived at Eskom, investigations into the performance of existing CCTV cameras at ports concluded that they were not performing well as they were not connected centrally via a fibre\u00a0optic network.<\/p>\n As Transnet\u2019s fibre optic network had been privatised to Neotel, the solution was to give the work to the latter. Phase two also had to go to Neotel because it was \u201calready involved in this complex project\u201d.<\/p>\n Homix director Yakub Bhikhu did not return calls seeking comment.<\/p>\n Transnet did not reply to detailed questions, but a story on Thursday in the Gupta-controlled New Age quoted Transnet as claiming that last week\u2019s expos\u00e9 ran \u201ccounter to appropriate journalistic standards \u2026 Until such time that the Mail & Guardian provides proof of any misconduct, the company will reconsider its relationships with the publication\u201d.<\/p>\n Neotel director Kennedy Memani, who is leading Neotel during its chief executive\u2019s \u201cspecial leave\u201d, said in a statement: \u201cThe Neotel board is taking this issue extremely seriously. On learning of our auditor\u2019s concerns, we took immediate action, engaging a leading independent law firm to address the issues raised.<\/p>\n \u201cAs part of its investigation, this law firm has had unfettered access to the company. The board believes that this course of action will help to strengthen Neotel\u2019s corporate governance framework.\u201d<\/p>\n * Got a tip-off for us about this story? Email [email\u00a0protected]<\/a><\/em><\/p>\n\n
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\nThe known Neotel payments to Homix were to clinch Transnet\u2019s \u00adpurchase of R300-million in telecommunication network equipment from Neotel and a five-year, R1.8-billion agreement for Neotel to provide Transnet with network services.<\/p>\n![](\"https:\/\/amabhungane.org\/wp-content\/uploads\/2018\/03\/cctvtransnetcapetownportauthoritydh4443.jpg\"){kind=spacer}
\nBig deal:<\/strong> Brian Molefe, then chief executive of Transnet, recommended confining a contract worth R835-million to a single bidder \u2013 Neotel. (David Harrison, M&G)<\/em><\/p>\n
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\nTransnet\u2019s ports division says on its website that it confines procurement to single suppliers where \u00adcompetitive tendering \u201cwould be impractical due to urgency, limited market or sole source supplier\u201d.<\/p>\n
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\nThe premature recognition of \u00adrevenue can be an \u201caggressive\u201d accounting tactic to make results look better. After Deloitte\u2019s intervention, Neotel reversed the allocation.<\/p>\n
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\nNeotel\u2019s R36-million second known payment to Homix, to clinch the R1.8-billion Transnet network services deal, was made on February\u00a027 this year, after Neotel had entered a \u201cbusiness consultancy agreement\u201d with Homix on February 19.<\/p>\n
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