Transnet defends 'legitimate' sale

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State-owned transport utility Transnet is determined to defend its sale of R5 billion worth of MTN shares, which is subject to a legal battle, says CEO Maria Ramos.

Ramos, speaking at a press conference this morning detailing the changes to the parastatal's pension fund, said that as far as she was concerned, the sale was legitimate.

The issue relates to legal action instituted by Sandile Zungu, former chairman of state arms manufacturer Denel, who is claiming R2.2 billion for the non-delivery of the MTN shares, which he says were promised to him.

In April 2004, Umthinzi Telecoms Consortium - headed by Zungu - was chosen as the preferred bidder for the shares. The deal failed when Ramos took over the reins at Transnet in 2005, and negotiations between the two parties ground to a halt.

"We will see them in court... it is a free country," Ramos said this morning.

In his legal documentation, Zungu lists the South African government, namely the Department of Public Enterprises, under which Transnet falls, as the first respondent, and Transnet as the second respondent.

Transnet spokesman John Dludlu says Transnet has filed papers saying it will defend its case, and the process is under rediscovery, whereby the legal representatives of the parties discuss the various documents that will be used in the case. No trial date has been set yet.

The sale of the 82 million MTN shares, of which six million were directly owned by Transnet, and the remainder by its pension fund, was completed early this year, in a book-building exercise that meant the shares were sold on the open market.

Ramos says Transnet sold the shares at a premium. The money from the MTN shares, along with the R3.1 billion received from the sale of the premium property at the Victoria & Alfred Waterfront, in Cape Town, were major contributors to the turnaround of the pension fund. The fund now has a value of R22 billion after having being in the red to the tune of R17 billion five years ago.

Dludlu says Transnet may say more at the release of its annual results on 26 June.

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