Transnet reports R10 billion in irregular expenses

Transnet SOC Ltd. reported R10 billion ($ 617 million) of irregular spending in the last fiscal year, suggesting that the South African port and rail operator still has work to do to overcome a damaging period of corruption allegations.

Cases in which acquisition agreements were made without following proper compliance “continue to have a prolonged effect on the business,” the Johannesburg-based company said in a statement on Friday.

Bad practices uncovered in the year to March date back to 2011 and bring Transnet’s total of doubtful expenses to 114 billion rand, the group said.

Transnet was among a number of state entities that criminals operating under the presidency of Jacob Zuma used to divert government cash, now the subject of an extensive judicial investigation.

The company has sought to clean up operations under new CEO Portia Derby, separating its procurement and finance functions and overhauling the overall structure.

“The process to accurately identify and report all irregular expenses is largely manual in nature and continues to result in inaccurate reports,” the company said.

Transnet’s annual net income decreased 35% to 3.9 billion rand, the group reported.

“The company has underperformed its potential in recent years, which has limited its financial position,” said Transnet. “This is due, among other things, to insufficient maintenance of outdated infrastructure and slow national and global economic growth.”

Now Read: Secret Information About Weapons Leaving Denel’s Front Door