Dodgy deals? Prasa CFO to pay back R8.2m!

5 months ago written by

It’s not often we have really good news to report. Today we have. Former Passenger Rail Agency of SA (Prasa) chief financial officer Fenton Gastin has been ordered to pay back over R8.2-million he received in terms of invalidated contracts signed by the agency’s now disgraced CEO, Lucky Montana.

BusinessLive reports the Pretoria High Court ruled that two contracts entered into with Gastin by Montana “in a deliberate attempt to defraud” Prasa were invalid and that he must refund his former employer. The question remains if he still has the money, tough.

The rest of the story is hidden behind BusinessLive’s paywall but TimesLive reports that the first contract was Gastin’s hiring as CFO and the second was a day-to-day contract given to him by Montana after he had been fired.

The papers filed at court claim that if the contracts Montana signed were allowed to continue in effect Gastin would score more than R19-million over five years – even if he did not do a day’s work. (That sounds like a Guptonian lifestyle… – Ed.)

Gastin’s attorney, Victor Nkhwashu, told The Times that he had not seen the judgment but was adamant that he had sent notice that his client intended to oppose Prasa’s application. Although the court papers mention that investigators could not find records of the decision by Montana to award the contracts, as CEO of Prasa he had signed them.

Gastin, court papers charge, was promoted to group CFO in April 2012 by Montana after serving as Prasa’s group chief risk officer for two years. No board approval could be found supporting this appointment on a package of R3-million a year.

In terms of the April contract it was decided he would be paid a total of six months’ salary as a severance package – despite his having signed a five-year fixed-term contract with Prasa.

Prasa group chief strategy officer, Sipho Sithole, in an affidavit which formed part of Prasa’s application to the court reads: “I submit that payment of this compensation was a deliberate ploy by Mr Montana and the respondent [Gastin] to pay the respondent monies that were not legally due to him.”

Fourteen months into his tenure as group CFO, Gastin was axed. Prasa’s human resources head at the time, Leba Mashao, told Gastin by letter that the decision to terminate his contract at the end of September 2013 was due to the company’s operational requirements and that trust between Gastin and Prasa had “irrevocably broken down”.

Gastin was then paid R3.3-million, more than his annual salary, for the 12-month remainder of his contract – despite being due only six months of pay.

TimeLive says in effect Gastin was appointed acting group CFO at R2,400 an hour or R264,000 a month from the day he was apparently fired… Go figure!

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