Latest news with #Trillian
News24
3 days ago
- Business
- News24
Former Transnet executives granted R50 000 bail each for fraud and corruption
Ex-Transnet executives Brian Molefe, Siyabonga Gama, and Thamsanqa Jiyane were granted bail at the Palm Ridge Magistrate's Court amid fraud and corruption charges tied to an alleged fraudulent R93-million-rand locomotive tender. This comes after they handed themselves over at a police station south of Johannesburg this morning. The court heard that in 2012, Transnet advertised a tender for the acquisition of the 1064 locomotives deal. The executives were then linked with an irregular payment of R93.4m to Trillian Asset management for organising a R30 billion loan to help buy the locomotives. It is alleged that a double payment was issued because Transnet had already paid another transaction advisory firm - Regiments. Trillian allegedly did nothing to earn the fee but invoiced Transnet. Investigating Directorate Against Corruption (IDAC) spokesperson Henry Mamothame tells Drum that the accused are facing 18 charges including fraud, corruption, contravention of the public finance management act and the contravention of the company's act. Read more | Former Transnet executives, Siyabonga Gama & Brian Molefe, arrested over R93 million locomotive tender fraud 'These charges relate to the acquisition of three contracts for locomotives in Transnet for the period of 2011 to 2014. When Transnet took a decision to expand and modernise it's services, there was a need for these contracts or tenders. Bidders had to be called but the state will prove in court that processes were flouted hence the accused appeared in court today.' Transnet has another ongoing case at the Gauteng High Court relating to the awarding of irregular amounts but Mamothame explains that they are dealing with complex matters emanating from the State capture. He says they could not link this matter to the ongoing case because in their holistic approach as IDAC they approach cases differently depending on the facts of the matters. 'Yes the ongoing case also involves locomotives but in this case we have three different contracts.' Mamothame says they initially wanted the accused persons to pay R200 000 bail each because of the seriousness of their charges. 'The amount of money involved in this matter is a lot and the charges are of a serious nature which could lead to a serious conviction at a later stage. The matter was postponed to the 6th of October for final investigations to be concluded.
Daily Maverick
23-04-2025
- Business
- Daily Maverick
McKinsey's compliance failure is a case study in corporate complicity
The McKinsey case forces us to ask uncomfortable questions about the behaviour of multinationals operating in governance-compromised jurisdictions. It is easy for firms to speak the language of ethics and integrity from glass towers in New York or London. But it is at the coalface, when ethical decisions are inconvenient, risky, or expensive, that a company's real values are revealed. McKinsey & Company's role in South Africa's State Capture saga is not just an ethical blemish on one of the world's most prestigious consultancies, it is a case study in how corporate compliance frameworks can be rendered toothless when commercial appetite trumps integrity. Through its partnerships with Regiments Capital and later Trillian Capital Partners, entities with clear links to the Gupta family, McKinsey embedded itself in the machinery of corruption that drained South Africa's state-owned enterprises. These weren't passive associations. They were deliberate business relationships formed in the face of serious reputational and legal risk. Despite overwhelming indications that these local partners were part of a broader State Capture project, McKinsey pressed ahead. It did so not in ignorance, but in defiance of the red flags. Compliance protocols failure McKinsey's internal compliance protocols failed at every critical juncture. Due diligence processes that should have flagged conflicts and corruption risks were either poorly executed, overridden, or deliberately ignored. Even after internal concerns were raised, such as those relating to Trillian's ties to the Guptas, decision-makers within the firm did not intervene. In effect, the very systems designed to shield McKinsey from reputational and legal exposure were sidelined in service of short-term commercial gain. This was not simply a local compliance failure; it was a global governance collapse. McKinsey's international leadership structures, including its global risk committees, knew, or should have known, about the risks associated with their South African operations. Yet the firm's internal architecture failed to act. That failure underscores a critical flaw in how compliance is often practiced: as a procedural façade, rather than a genuine organisational constraint. What this tells us is that compliance frameworks cannot be assessed by their existence on paper. McKinsey had protocols. It had ethics officers. It had codes of conduct and formalised approval channels. But what it lacked, at least in this context, was a corporate culture that enabled those structures to interrupt profit-driven decision-making. The uncomfortable questions The McKinsey case forces us to ask uncomfortable questions about the behaviour of multinationals operating in governance-compromised jurisdictions. It is easy for firms to speak the language of ethics and integrity from glass towers in New York or London. But it is at the coalface, when ethical decisions are inconvenient, risky, or expensive, that a company's real values are revealed. In contexts like South Africa, where public procurement systems are easily manipulated and political interference in state-owned entities is endemic, the burden on private firms to self-regulate is even higher. But McKinsey's conduct suggests the opposite: that weak institutional environments are treated not as compliance hazards, but as commercial opportunities. The scandal also punctures the illusion that Environmental, Social and Governance commitments, particularly those relating to governance, present more than aspirational branding. McKinsey, like many global firms, has embraced Environmental, Social and Governance commitments in its external communications, claiming leadership in corporate integrity. But its actions in South Africa call that narrative into question. 'You cannot claim Environmental, Social and Governance leadership in your annual report while enabling corruption in your offshore operations.' Investors and regulators are no longer satisfied with platitudes. They are asking whether companies are living their values, or merely marketing them. The lessons There are critical lessons to be learned. First, compliance systems must be context-sensitive and embedded across global operations. What constitutes a red flag in Frankfurt may require entirely different scrutiny in Johannesburg. Second, local compliance professionals must be empowered to veto or suspend deals, regardless of profitability. This requires not just technical capacity, but institutional support from leadership. Third, accountability must flow upward. When compliance collapses, it should not be the middle managers or local partners who shoulder the blame, while senior leadership escapes scrutiny. McKinsey's eventual apology and repayment of R870-million to Eskom, while necessary, does little to address the structural flaws that allowed this conduct to occur. Nor does it restore the trust lost by public institutions whose mandates were undermined by self-interested private actors. Restitution without reform is hollow. If anything, the scandal should disabuse us of the idea that elite global firms are inherently ethical actors. Prestige does not equal integrity. And in weak governance environments, corporate opportunism will almost always fill the vacuum left by absent enforcement. For McKinsey, the fallout has been a reputational reckoning. But for South Africa, it is a warning: as long as the compliance frameworks of international firms remain reactive, fragmented, and culturally disconnected from the realities on the ground, the private sector will continue to play a central role in enabling State Capture. The regulatory response must be robust. South Africa needs stronger cross-border enforcement tools, tighter controls on public-private partnerships, and an empowered prosecutorial authority capable of holding both domestic and international actors accountable. But perhaps more urgently, the global legal and compliance community must recognise that 'doing business responsibly' in vulnerable states means more than following internal rules. It means refusing to participate, explicitly or implicitly, in systems that exploit institutional weakness for private gain. DM Annerize Shaw (Kolbé) is a specialised attorney of the High Court of South Africa, an LL.M. candidate in Corporate and Commercial Law at the University of London, and a member of the Institute of Advanced Legal Studies, London. She is a published author in the field of international comparative law, with a focus on corporate compliance and legal sector transformation.
