
Explosive report into Prasa contracts
CAPE TOWN - A draft forensic report by law firm Webber Wentzel into Prasa reveals disturbing corruption at Passenger Rail.
It shows how the state owned entity has been bleeding money on sub standard contracts,
some of which were unnecessary and others that were never completed.
WATCH | Open Secrets wants Hawks to finalise PRASA investigation findings
A News24 article has detailed how Prasa was overcharged, defrauded, and exploited,
with findings that some contractors over-inflated prices by 2000% .
The report has also found that some trains are being repaired only to be left at depots.
These repairs have already cost the entity R2.5 billion rand.
Following the explosive report, ActionSA has written to the Transport Minister demanding accountability.

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles

IOL News
8 hours ago
- IOL News
Court allows #UniteBehind to join Prasa Zondo corruption review proceedings
Prasa's former chief executive Lucky Montana is one of five former Prasa board members who will ask the court to review and set aside State capture findings against the entity. Image: File The organisation #UniteBehind has been granted permission by the court to join the proceedings in which five former board members of the Passenger Rail Agency of South Africa (Prasa) are challenging findings of corruption against them by the Zondo Commission of Inquiry into State Capture. In ruling in favour of #UniteBehind, the Gauteng High Court, Johannesburg said the commuter activist organisation had demonstrated a direct and substantial interest in the review application of the five former board members. Acting Judge Xenophon Stylianou added that given the importance of the subject matter of the review application, it would be in the public interest and the interests of justice that #UniteBehind be granted leave to intervene as a respondent. The ex-board members want the court to review and set aside the findings and recommendations concerning Prasa as detailed in Part 5 Volume II of the Final Report of the State Capture Commission. They are former Prasa chairperson Sfiso Buthelezi, Dr Bridgete Gasa-Toboti, the former chairperson of the board's Finance, Capital Investment and Procurement (FCIP) Committee, Mmatebogo Nkoenyane, who served on the FCIP Committee, Nkosinathi Khena, who served on the audit and risk management committee (ARM), and Lucky Montana, former Prasa group chief executive. The group will at a later stage argue that the report is reviewable on numerous grounds, including what they deem the selective application of the commission's rules and regulations, "factual inaccuracies and disregard of the evidence". In its intervention application to be joined as a respondent, #UniteBehind, through Zackie Achmat, a well-known South African political activist, explained that their input in the matter is in the public interest. The five ex-board members meanwhile denied that the organisation has a direct and substantial interest in the review application. #UniteBehind said its intention to join the main proceedings is to demonstrate to the review court that the relief sought in the review application is neither just nor equitable, that certain factual allegations made by the ex-board members in the review application are incorrect, and that the findings of the Commission's report are correct and should withstand review. It explained that its members use trains as a form of transport and that it has a direct interest in the effective and efficient management of Prasa and commuter rail. #UniteBehind cited a long-running track record in campaigns against Prasa in support of its case. This includes a campaign to end corruption, maladministration, and malfeasance at Prasa under the name of #FixOurTrains, and it also assisted the Commission at the time by providing it with evidence. In ruling in favour of #UniteBehind, the judge found that the objective of the organisation is to hold Prasa accountable to its constitutional and legislative mandates. Its interest in accountability and fighting corruption is specifically focused on rail commuters and Prasa through campaigns such as #FixOurTrains. #UniteBehind published 'PRASALeaks,' which sought to highlight findings from two reports (one by Treasury and another by Werksmans) which #UniteBehind said showed widespread corruption at Prasa.


The Citizen
a day ago
- The Citizen
Buy now, panic later? Why payment system might be too good to be true
Is 'buy now, pay later' empowering consumers, or quietly indebting them? 'Buy now, pay later' payment options have strutted onto South Africa's financial runway with the swagger of innovation, offering interest-free instalments, bypassing traditional credit checks and boasting sleek user interfaces that make old-school lay-bys look prehistoric. For consumers, it feels like a dream: swipe today, split it tomorrow. For platforms, it is fintech gold. But beneath the surface of this frictionless façade lies a regulatory grey zone thick with risk, ambiguity and potential litigation, Lerato Lamola and Anél De Meyer, partners at Webber Wentzel, warn. 'Buy now, pay later' services allow consumers to buy things immediately and pay for them in instalments over a set period, usually without interest if payments are made on time. However, as usage of the 'buy now, pay later' option increases, concerns around consumer debt, regulatory arbitrage and financial exclusion also grow. Lamola and De Meyer say the central question in South Africa is whether 'buy now, pay later' products fall within the jurisdiction of the National Credit Act or the Financial Advisory and Intermediary Services Act (FAIS Act). ALSO READ: Credit and the law: Here are the rights you must know about How credit is regulated in SA The National Credit Regulator (NCR) is responsible for enforcing compliance with the National Credit Act, while the Financial Sector Conduct Authority (FSCA) is responsible for compliance with the FAIS Act. The consumer credit environment in South Africa is governed by the National Credit Act, which regulates all credit providers and mandates affordability assessments along with other consumer protection mechanisms. 'Buy now, pay later' providers often argue that they are not credit providers, as their terms and conditions do not constitute a credit agreement, Lamola and De Meyer say. 'They say this is because they charge no interest and operate within a very short payment cycle of four to six weeks. As a result, many 'buy now, pay later' firms claim exemption from the obligations they would have under the National Credit Act.' ALSO READ: Buy now, pay later a convenient way to buy if you qualify Buy now, pay later falls into regulatory void According to the Intergovernmental Fintech Working Group (IFWG), 'buy now, pay later' options currently fall into a regulatory void. The NCR has taken limited action against providers, while the FSCA must still issue clear guidance. Therefore, Lamola and De Meyer say, consumers face reduced transparency, while there are no guaranteed recourse mechanisms and inconsistent contract terms. The legal classification of 'buy now, pay later' determines the scope of regulatory obligations, Lamola and De Meyer say. 'If buy now, pay later is credit, the National Credit Act mandates affordability checks, registration with the NCR and extensive disclosures. 'However, most buy now, pay later operators avoid these obligations by structuring their offerings as payment solutions or deferred billing.' They point out that the FAIS Act regulates financial advice and intermediary services. 'Buy now, pay later providers rarely claim to offer financial advice and as such, FAIS oversight is generally not invoked. This ambiguity causes a jurisdictional conflict between the NCR and FSCA, with little resolution.' ALSO READ: Buy now, pay later good news for small businesses Do consumers know enough about it? In addition, they say, South Africans are often unaware of potential late fees, the implications of missed payments, or the lack of legal recourse, especially when providers collapse or change terms unilaterally. Lamola and De Meyer point out that while legal classification remains unresolved, enforcement action against 'buy now, pay later' providers in South Africa has been minimal. 'In practice, the NCR's enforcement has focused largely on traditional credit providers, while the FSCA's mandate remains unclear in the absence of explicit statutory triggers.' They warn that this lack of supervisory clarity raises risks of selective compliance, where only larger players seek legal advice or act pre-emptively, while smaller or offshore providers bypass South African oversight altogether. 'In addition, without designated supervisory frameworks, enforcement becomes reactive, often occurring only after consumers are harmed.' ALSO READ: Beware: debt is often no more than a click away COFI Bill could address 'buy now, pay later' regulatory gaps However, they say the Conduct of Financial Institutions Bill (COFI Bill) is envisaged to address these regulatory gaps. 'A modern regulatory regime must therefore address not only classification and jurisdiction, but also enforcement mechanisms, investigative powers and coordinated oversight, possibly through inter-agency memoranda of understanding or joint supervisory task teams. 'Without this, regulatory gaps become systemic vulnerabilities.' Lamola and De Meyer say South Africa's current dual-regulator model is ill-equipped for the digital fragmentation of modern finance. 'The lack of a clear buy now, pay later regulatory framework stands in contrast with jurisdictions where regulators have already expanded definitions of credit to include buy now, pay later explicitly. 'We hope that the COFI Bill will reconcile its institutional gaps and avoid regulatory arbitrage by expanding statutory definitions and enforcing consistency.' They say it is unclear whether a platform offering 'buy now, pay later' options at checkout could be deemed to be providing or facilitating credit under the National Credit Act. 'Retailers and marketplaces must consider whether they are indirectly exposing themselves to liability or reputational risk, especially if their partners engage in misleading conduct, impose unlawful fees, or collapse without notice.' ALSO READ: How to build a strong credit score to unlock financial freedom Verification and affordability assessments important De Meyer and Lamola say one major challenge for effective 'buy now, pay later' regulation in South Africa lies in consumer verification and affordability assessments. 'Without a robust credit history or consistent income documentation, many consumers who use these services remain invisible to traditional risk models. 'This opens the door to over-indebtedness, particularly among the underbanked. Future Buy Now Pay Later regulation must therefore account for the reality of fragmented digital footprints and low formal credit participation. 'Buy now, pay later redefined consumer finance by promising simplicity and speed, but the country risks repeating mistakes seen in unregulated microcredit booms if it fails to address its regulatory gaps. 'Global trends show that regulation can evolve in tandem with technology. By embracing reform and cross-sector collaboration, South Africa can lead in creating a safe, competitive digital finance ecosystem.' NOW READ: Why you should use credit responsibly

IOL News
5 days ago
- IOL News
DA slams Joburg council's approval of R2. 5 billion loan
The City of Johannesburg council in Braamfontein has approved a R2.5 billion loan from the African Development Bank. Image: Nhlanhla Phillips / Independent Newspapers The City of Johannesburg council has approved a R2.5 billion loan from the African Development Bank (AfDB) for capital expenditure projects. The R2.5bn loan is amortising, unsecured, and payable over 15 years, and its indicative total cost will be about R4.94bn and quarterly repayments of just above R81.8 million. 'The total front-end fee of 1.15% of the total loan amount is due to the AfDB before loan signature. This equates to about R28.75m for a loan of R2.5bn,' read documents presented in council on Wednesday. The council also gave the green light to the city's top officials to negotiate and effect changes on the debt agreement should they be required to protect the city's interests as well as execute on the final terms of the long-term loan to be provided by the AfDB. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ However, DA shadow finance MMC Chris Santana said the party does not believe the city is in a position to take on more loans. 'It's with regret that I find the City of Johannesburg consistently trying to get long-term funding, in essence, trying to fund short-term funding. We are currently in a position where we do not have a funded budget,' he said. According to Santana, the collection rate is still behind the budgeted collection rate of 89%. He said it currently stands at 85% and that the repayments due per quarter on all loans will be almost over R400 million based on three loans. 'We are already sitting with a cash crisis and a cash crunch. We don't need this loan; the only reason I think we need this loan is to settle the short-term loan of R2.8bn from the DBSA (Development Bank of Southern Africa) that's coming up at the end of this month, June 30. 'We are stealing from Peter to pay Paul at this point,' Santana explained. He accused the municipality of sending back free money to the National Treasury. 'If we are sending back free money, why must we go loan money?' he asked.