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Gupta Associate Allegedly Involved in Bilking the Transnet IT Deal

Published September 21, 2023
9 months ago

T-Systems, a South-African IT company, appears to have benefited substantially after Salim Essa, a known associate of the controversial Gupta family, allegedly became a backchannel “negotiator” for the German multinational. By May 2018, when the contract extension expires, the firm’s earnings from the Transnet dealings is set to total almost R4-billion due to a dubious increase in the contract value from R1.7-billion to R3-billion.



Former financial officer for Transnet, Anoj Singh, who is under scrutiny for his connections to the Guptas, was also implicated in Transnet’s decision to extend the T-systems' contract, instead of opening it for tender. It is alleged that the decisions to extend the contract, omitting the tender process, resulted in nearly R1.3-billion extra revenue for T-Systems and has led to an ongoing dispute over the contract.


Whilst the issue of the contract dispute is in progress, T-Systems will continue to garner additional revenue, possibly as much as R900-million according to the company's records. However, T-Systems strongly deny any undue influence exerted by Salim Essa on the company's handling of the data services contract with Transnet.


As per the sources familiar with T-Systems and the parastatal, Essa attended meetings with Transnet staff in 2013 and 2014 on behalf of T-Systems, around the same period when Transnet was contemplating putting the data services contract up for tender. Moreover, Transnet was at the time, assessing a tender for network services, which saw another IT firm, Neotel, entangled in kickbacks scandal.



All sources, from both Transnet and the local IT sector, indicate that Essa was acting as a negotiator for T-Systems during the process. The extension of the existing contract allegedly happened under orders from Singh despite standard procedure dictating the initiation of a new tender process. There was no clear justification provided for this course of action and the decision seems to have bypassed standard processes within Transnet.


The saga has undercurrents of association with the Guptas, with T-Systems local empowerment partners overlapping with companies previously involved with the notorious family. Despite the connections, T-Systems claims ignorance of any improper proceedings and maintains the involvement of the Guptas as unproven hearsay.


With numerous controversial figures refusing to clarify their stances, the issue becomes murkier. Legal teams from both the treasury and Transnet have recommended the tender be awarded to Gijima after two separate investigations, however, a final decision is still pending in the high court of Johannesburg.


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