Former Transnet Executive Charged with Multimillion-Rand Fraud and Money Laundering

The Special Investigating Unit (SIU) has marked a significant milestone in its fight against corruption with the arrest of Herbert Msagala, the former Chief Executive Officer of Transnet Group Capital (TGC). Following a meticulous inquiry, Msagala was apprehended and faced the Johannesburg Specialised Commercial Crime Court to answer for charges of fraud, corruption, theft, and money laundering.

Earlier investigations by the SIU under Proclamation No. 11 of 2018 spotlighted dubious contracts worth R194 million awarded by TGC to IGS Consulting Engineering. Central to this case is the pipeline project meant to transport various fuel products between Durban and Gauteng, during which Msagala allegedly received kickbacks exceeding R26 million and funneled these illegal proceeds into personal assets including properties and luxury vehicles.

The Special Investigating Unit (SIU) welcomes the arrest and court appearance of former Transnet Group Capital (TGC) Chief Executive Officer Herbert Msagala. He appeared before the Johannesburg Specialised Commercial Crime Court on fraud, corruption, theft, and money laundering… pic.twitter.com/4PStv6rdt5

— Special Investigating Unit (SIU) (@RSASIU) October 22, 2024

The events leading to the court hearing have unfolded with steadfast legal rigor. In 2020, based on criminal evidence, the SIU made the necessary referrals to the National Prosecuting Authority. Concurrently, two individuals and IGS Consulting Engineering were also charged. The whereabouts of these individuals remain under active investigation by the Directorate for Priority Crime Investigation (Hawks).

Furthermore, the Special Tribunal sanctioned a preservation order in July 2020, resulting in the forfeiture of Msagala’s pension benefits and assets to the State. This order, upheld in a subsequent appeal, saw the seizure of 35 luxury vehicles and five properties, totaling over R18 million in value.

The pursuit of justice does not end here. With the criminal case postponed to November 19, 2024, the SIU reaffirms its commitment to supporting the prosecutorial process and collaborating with law enforcement agencies to uphold the National Anti-Corruption Strategy—an emblematic crusade to cleanse governmental institutions of corruption.

Msagala's bail has been set at R60,000, and as the operation to trace additional suspects persists, the SIU's stern approach is a clear message that corruption at any level within state-owned enterprises will be rigorously contested.