Siphiwe Nyanda's security company is fighting to clear its name - and that of the former army general turned communications minister - after claims relating to the alleged fraudulent awarding of a tender to the company.
Abalozi Risk Advisory Services has launched an application in the Johannesburg High Court to try to have the company's name - and by extension Nyanda's - cleared after Nyanda and his business partner were said to have been given a tender by Transnet subsidiary Transnet Freight Rail (TFR) dishonestly.
The minister's security firm, known as General Nyanda Security Advisory Services (GNS) at the time it got the contract, was found by a Transnet disciplinary committee to have benefited from the fraudulent awarding of a tender.
The committee's chairman, Nazeer Cassim, wrote in his findings: "The beneficial owners of GNS at the material time were General Siphiwe Nyanda, then a politician and presently a minister in the government, and Sylvester Sithole, then a practising attorney.
"Mr Sithole features in the allegations of wrongdoing in the highly publicised abuse of state funds at the SABC."
Cassim chaired the disciplinary hearing into misconduct involving senior manager of security Dingaan Senamela and the company's manager of contracts and administration, Sipho Khanye.
His findings have left Nyanda furious and Sithole demanding an apology.
Suspended TFR head Siyabonga Gama has also hit back.
Cassim was accused of trying to further his "political and business ambitions".
Nyanda's company was accused by Cassim of milking Transnet for millions without giving value for money or adequate service, which he deemed "wasteful expenditure" to Transnet - and South African taxpayers.
As a result, Senamela and Khanye were dismissed. The two are challenging the dismissals.
Separate law firms acting on behalf of Nyanda and Sithole say the tender was not given wrongfully and unlawfully, and said allegations of a conspiracy concerning the tender were malicious and in bad faith.
They want the court to review and set aside Cassim's findings as they were prejudicial and disparaging to the reputation of Nyanda and Sithole.
In court papers, they said they were "alarmed and disgusted at the manner in which their names were disparaged, defamed and castigated" by Cassim, in a matter that they had "no business whatsoever with".
Gama, who until the controversy was in the running to replace Maria Ramos as Transnet boss, also hit back at Cassim's claims that he had been part of a conspiracy in an unlawful transaction.
"We wish to express our strong condemnation of your obvious political and business role you seem to eloquently play in summarily 'hanging' Gama who did not even appear before you," said his lawyer Themba Langa in a letter to Cassim.
Gama has also complained about Cassim to the Johannesburg Bar Council asking that they investigate charges of misconduct against him, alleging that he (Cassim) had "self-seeking motives to promote his political and business interests", therefore he had sought to implicate him (Gama) without knowledge of all the facts," said Langa.
Lawyers for Sithole have demanded an apology from Cassim for defamatory allegations.
The running thread in all the attacks on Cassim is that he made adverse findings against Nyanda's company, Sithole and Gama, who were not part of the disciplinary hearing chaired by Cassim.
They claim, in separate correspondence, that Cassim never solicited facts or comments from them before he prejudiced them in his ruling.
Cassim, however, has apologised, saying he did not intend to injure Sithole's feelings or dignity.
"I conducted a domestic internal disciplinary inquiry on the facts before me, applying common sense principles and matters in the public domain, I did not refer to or use matters that were not in the public domain."
He said in correspondence seen by The Sunday Independent that he did not wish to debate the contents of Gama's claims but that he sought to be fair in the interests of Transnet and therefore to citizens of the country. "Of course my findings are subject to scrutiny afresh by the CCMA," he said.
Cassim added that he had acted with a clear conscience and had regard to the objective documentary evidence before him, which included procurement policies and actual events.
"I relied on the footprints which emerged from objective facts. I did not have blinkers but viewed business decisions holistically," he said. "Contrary to what you say, I do not have any illusions of political office or political favours," he said.
"You do not have to be a rocket scientist to understand what happened in the transaction under scrutiny unless you do not want to face the reality of the true facts," he said.
In his findings, Cassim wrote that Nyanda's company, which was renamed Abalozi Risk Advisory Services but began trading as General Nyanda Security Advisory Services, was found to have benefited from a lucrative contract improperly given by Transnet Freight Rail in 2007. Nyanda is no longer a director in the company but his family trust has a 45 percent stake in the firm, which, however, no longer has the Transnet contract it made millions out of.
Nyanda's company made as much as R70 million out of the contract, R55m for the duration of the contract, and R1.7m on a month-to-month basis for six months.
According to Cassim's hotly contested findings the contract given to GNS in which Nyanda had been a director along with Sithole, had been tainted with improper behaviour. However, he said he had not made any findings on whether there had been fraud or corruption since his role was to evaluate the conduct of the two employees in relation to the contract.
Nyanda's company has been central to controversy at Transnet in the past year over the manner in which it secured a contract from Transnet.
It was not registered with the Private Security Industry Regulating Authority (PSIRA) when the initial deal was concluded.
The company received its PSIRA certificate six months after it was awarded the Transnet contract.
General Nyanda Security was "highly recommended" and given the contract "on confinement", a process normally followed in emergencies, when there is no time for the normal tendering process because of security concerns around cable theft, on the basis of its expertise, track record and national footprint.
Gama, who is also awaiting the outcome of a disciplinary hearing into allegations of misconduct against him, has maintained that allegations of his role in tender irregularities were aimed at preventing him from becoming head of Transnet following the departure of Maria Ramos in February last year.
Although it was budgeted at R13 million, GNS was given R18 million to provide security services in its first year with the value of the contract doubling in April 2008, while in August 2008 the contract amount was R32 million. The contract ended in November 2008 because the company had not fulfilled its terms of the contract.
In his findings Cassim said while he appreciated that in our new-found democracy the interests of black entrepreneurs must be promoted, he was not prepared to accept that GNS should have been the recipient of a contract which it then it subcontracts while earning a massive profit.
"This is not black empowerment but simply opportunism which cannot be tolerated as it leads to a situation where a government entity, in this case Transnet, pays money for no value received to a black company without the comfort that the black company is in fact being empowered in its skills and knowhow. Self-enrichment, on its own, is not good enough," he wrote.
He said GNS, disguised in whatever legal form, had seized the opportunity to make money, having had no registration status with the regulating authority, no history national or locally of a track record in providing a service for which it was awarded handsome contracts. Furthermore, GNS did not have any employees - based on its status with the South African Revenue Services - to render the services it purported it was eminently qualified to do. Abalozi and Sithole have strongly denied these claims.
South Africa's head of defence from June 1998 to June 2005, Nyanda was appointed a director of GNS on June 29 1998. He resigned from the board on August 13 last year but kept his shares and told Parliament in the 2009 register of members' interests that GNS provided him with a "driver for household and children transportation".