Former Transnet Executive Herbert Msagala Arrested for Fraud and Corruption

The SIU's investigation, authorized under Proclamation No. 11 of 2018, revealed that Msagala allegedly used the kickbacks to purchase luxury properties and vehicles.

The Special Investigating Unit (SIU) has welcomed the arrest and court appearance of former Transnet Group Capital (TGC) Chief Executive Officer Herbert Msagala, who faces charges of fraud, corruption, theft, and money laundering. Msagala appeared before the Johannesburg Specialised Commercial Crime Court and was granted R60,000 bail.

The arrest stems from an SIU investigation that uncovered Msagala’s illicit benefit of over R26 million in kickbacks from IGS Consulting Engineering, a company awarded contracts totalling over R194 million by TGC. These contracts were for the maintenance and upgrading of high-pressure pipeline infrastructure as part of the New Multi-Product Pipeline project, transporting fuel from Durban to Gauteng.

The SIU's investigation, authorized under Proclamation No. 11 of 2018, revealed that Msagala allegedly used the kickbacks to purchase luxury properties and vehicles. In 2020, the SIU referred criminal charges against Msagala and others to the National Prosecuting Authority (NPA), leading to his arrest. Two other individuals implicated alongside Msagala, as well as IGS Consulting Engineering, face charges, though the individuals have yet to be apprehended.

Msagala’s assets, including 35 luxury vehicles and five properties worth over R18 million, were frozen in July 2020 under a preservation order granted by the Special Tribunal. Despite an appeal attempt, Msagala lost his bid to overturn the order in November 2020, resulting in the forfeiture of his properties and pension benefits to the State.

The criminal case has been postponed to November 19, 2024, to allow further investigation and the tracing of outstanding suspects. The SIU remains committed to supporting the prosecutorial process and ensuring those implicated in corruption are held accountable.

The prosecution of Msagala forms part of South Africa's broader National Anti-Corruption Strategy, a coordinated effort by law enforcement agencies to eradicate corruption across government departments.