SIU and Transnet Soc Ltd v Dynamic Power Engineering (Pty) Ltd and Others: Holding officials accountable for Tender Fraud and illicit gains
The judgment handed down by the President of the Special Tribunal, Judge Victor on 12 February 2025 is the latest success story of the Special Tribunal, in a matter that had been litigated since 2022.
The case, involving Transnet SOC Limited as the second applicant and Dynamic Power Engineering (Pty) Ltd, previously Superfecta Trading 209 (Pty) Ltd dealt with fraudulent conduct in relation to a tender awarded by Transnet to Dynamic Power, and five luxury properties belonging to two high-ranking Transnet officials, namely Zakhele Lebelo and Phathutshedzo Mashamba, which they fraudulently funded and acquired by means of money received from service providers contracted by Transnet.
Background
On 8 August 2022, the Special Tribunal granted a preservation order over properties belonging to Mr Lebelo and Mr Mashamba. On 1 November 2022, the SIU and Transnet launched a review application in the Special Tribunal where they sought that:
- Dynamic Power be directed to pay Transnet R8 540 641.00, the net profit it earned as a result of the tender awarded to Dynamic Power for the installation of two generators for the Carlton Centre precinct, and the net profit it earned as a result of its appointment as the contractor for electrical and mechanical services at Transnet’s Carlton Centre precinct.
- Mr Lebelo be directed to pay to Transnet R5 182 767.73 amounting to a bribe, gratification and secret profits he unlawfully received while employed at Transnet, and R100 000.00 amounting to a bribe, gratification and secret profits he unlawfully received following his resignation from Transnet, for his role in Dynamic Power’s contracts with Transnet; and
- Mr Mashamba be directed to pay Transnet R2 300 000.00 amounting to a bribe, gratification and secret profits he unlawfully received while employed at Transnet, for his role in Dynamic Power’s contracts with Transnet, and R5 113 255.00 amounting to a bribe, gratification and secret profits he unlawfully received while employed at Transnet, for his role in the second respondent’s contracts with Transnet.
Special Tribunal’s ruling
Dynamic Power launched civil proceedings in the High Court against Transnet on 23 October 2023. The parties subsequently agreed to settle both matters, with the Special Tribunal handing down its order on 12 February 2025, ordering amongst other things, that:
- The decision to award the tender to Dynamic Power for the installation of two generators for the Carlton Centre precinct and the resulting contract was inconsistent with the Constitution, unlawful and invalid, and was thus reviewed and set aside.
- The decision to appoint Dynamic Power as the maintenance contractor for electrical and mechanical services at Transnet’s Carlton Centre precinct and the resulting contract was inconsistent with the Constitution, unlawful and invalid, and was thus reviewed and set aside.
- Dynamic Power is directed to pay R3 091 605.76 to Transnet in 3 instalments on 3 March, 3 April, and 3 May 2025.
- Mr Lebelo is indebted to Transnet in the amount of R5 282 767.73, which debt shall be recovered by Transnet by the payment of Mr Lebelo’s Transnet Retirement Fund and the proceeds of the sale of the relevant, fraudulently acquired properties to Transnet; and
- Mr Mashamba is indebted to Transnet in the amount of R7 413 255.00, which debt shall be recovered by Transnet by the payment of Mr Mashamba’s Transnet Retirement Fund and the proceeds of the sale of the relevant, fraudulently acquired property to Transnet.
Timeline of events
| Date | Event |
|---|---|
| 18 January 2016 | Tender awarded to Dynamic Power. |
| 22 October 2017 | Appointment of Dynamic Power as contractor |
| 8 August 2022 | Preservation Order granted |
| 1 November 2022 | Review Application launched by SIU and Transnet |
| 23 October 2023 | Civil Proceedings launched by Dynamic Power |
| 12 February 2025 | Final Order granted by Special Tribunal |
Conclusion
The SIU and Transnet v Dynamic Power and Others case is an important one in South Africa’s anti-corruption efforts, reinforcing accountability the tender process. The decision showcases the Tribunal’s power to order preservation orders, the sale of property, and the payment of retirement funds to recover money lost through corruption.