12/12/2016 04:16 GMT | Updated 12/12/2016 04:26 GMT

Lucky Montana Blasts The AG, Prasa, Asks Speaker To Can Annual Report

He's been dismissed by Prasa and lashed by the public protector, but Lucky Montana maintains his innocence.

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JOHANNESBURG, SOUTH AFRICA � JULY 30: Former Passenger Rail Agency of South Africa (PRASA) chief executive, Lucky Montana leaves the Hilbrow police station on July 30, 2015 in Johannesburg, South Africa. Montana laid fraud charges against two executives and a board member of the parastatal, as well as two directors of a private security company. (Photo by Gallo Images / The Times / Moeletsi Mabe)

Disgraced former group chief executive of the Passenger Rail Agency of South Africa (Prasa), Lucky Montana, has launched a broadside at his former employers and the Auditor-General (AG), accusing them of fraud and misleading Parliament.

Montana asks Baleka Mbete, speaker of Parliament, in a letter of 21 pages to set Prasa's "fraudulent annual report" aside and institute an investigation because Prasa and the AG "colluded" to intentionally "mislead" the legislature. The AG gave Prasa an unqualified audit for the 2015/'16 financial year.

"Parliament should find it unacceptable that almost R12-billion of the R13-billion in irregular expenditure is due to the failure of the Prasa board and management to provide auditors with the required information and supporting documents. This is clearly scandalous and vexatious. The auditors have abdicated their constitutional responsibilities," Montana writes.

It is the latest salvo in an ongoing battle between the old and new leadership at the parastatal

Prasa refused to comment, while the AG has committed to do so. We will update this article when we receive comment.

Montana, who was dismissed as Prasa boss in July 2015, claims:

  • Historical and old transactions, already audited by the AG, is being backdated and declared irregular in order to pursue "a proxy war";
  • The AG's auditors did not demand supporting documents before declaring certain transactions irregular and wasteful;
  • Supporting documents – which are available and disprove the AG's findings – were withheld for contracts between Prasa and firms for the general overhaul of rolling stock, Siyangena Technologies, Siemens, Siyaya Energy, SA Fence and Gate, Swifambo Rail Leasing, Siyaya Engineers, Blackstar Communications as well as a number of others.

Montana's letter –- also sent to Kimi Makwetu, the AG, Dipuo Peters, minister of transport, and Themba Godi, chairperson of Parliament's Standing Committee on Public Accounts (Scopa) –- was sent two weeks after Prasa's board and management appeared before Parliament's Standing Committee on Appropriations.

It is the latest salvo in an ongoing battle between the old and new leadership at the parastatal. Montana was fired in July 2015 amid reports on Prasa's R3.5-bn tender for new diesel locomotives that allegedly did not conform to SA rail line standards.

The Hawks are investigating 39 cases of alleged maladministration after a report by the public protector (PP) found numerous instances where tenders and contracts were awarded without proper procedure being followed. The PP also recommended disciplinary action be taken against Montana.

The AG gave Prasa an unqualified audit for the 2015/'16 financial year, even though more than R13-billion in spending was found to be fruitless and wasteful.

Collins Letsoalo, acting group chief executive, and Popo Molefe, chairman of the board, told MP's on the 19th of October there were "serious" deviations from standard procurement and supply chain management norms under Montana's leadership. They said Prasa has initiated a turnaround strategy to rectify numerous adverse audit findings by the AG, adding some contracts "were simply unlawful" and that process and procedure wasn't always adhered to.

The AG gave Prasa an unqualified audit for the 2015/'16 financial year, even though more than R13-billion in spending was found to be fruitless and wasteful.

Montana dismisses the AG's findings, saying there is enough documentation available to disprove wrongdoing and that is was purposely not given to the AG. He contends that Prasa's internal audits were accepted by the AG without being interrogated and that the AG was supposed to do its own audit.

Montana gives a detailed breakdown of a number of contracts, these include:

Contracts entered into for the general overhaul of rolling stock

The contracts were entered into lawfully, condoned by the board and audited and verified by the AG: "The result of the current outcome is that years dating as far back as 2005/'06 will need to be adjusted. Auditors are effectively repudiating their own work for over a decade."

Siyangena Technologies

The AG claims it was "unable to determine whether the procurement process followed was fair, equitable, transparent, competitive and cost-effective and compliant with prescripts . . ." Montana says the appointment of Siyangena to provide services was made after a closed but competitive bidding process and approived by the board. "Again, the board and the company secretary failed to submit the relevant documents to the auditors so that adverse findings could be made."

Swifambo Rail Leasing

Even though the AG found the contract "invalid from inception", citing various irregularities, Montana contends it was above board. Swifambo was awarded the contract to deliver 70 new locomotives to Prasa. These vehicles were later found to be unsuitable for local conditions. Montana argues the board approved the contract and signed off on the 2014/'15 annual report, which contained all the detail.

Prasa told Scopa on 30 November –- the same day Montana sent his letter to Mbete -– numerous legal proceedings were ongoing and that efforts to recover expenditure are underway.

Luzuko Jacobs, spokesperson for Parliament, confirmed the receipt of Montana's letter. "We are waiting for the speaker to decide how to deal with it."

Godi, from the African People's Convention (APC), said Montana has the right to air any issue as he sees fit. "Scopa will wait for direction from the speaker."