Transnet’s statement on the reported irregularities TRANSNET SOC LTD JSE Code: TNET TRANSNET’S STATEMENT ON THE REPORTED IRREGULARITIES 12 July 2017 As part of the Transnet’s year-end audit, Transnet’s external auditors submitted a report of reportable irregularities to the Independent Regulatory Boards of Auditors (IRBA), in line with their professional obligations. The reportable irregularities relate to non-compliance and non-adherence to stipulated internal procurement processes and requirements of law in procurement contracts entered into between Transnet and various service providers by a number of senior officials. In terms of the Audit Profession Act, the Board of Transnet had 30 days to make representation to the external auditors of steps taken to mitigate the risks identified, after which the external auditors were then required to report back to IRBA to confirm if: * no reportable irregularities are taking place; or * the suspected reportable irregularities are no longer taking place and that adequate steps have been taken to the prevention or recovery of any loss as a result thereof, if relevant, or * the reportable irregularities are continuing. The irregularities are no longer taking place. The affected senior officials have been suspended, legal action has been taken where appropriate, and disciplinary actions are underway. Furthermore, Transnet is no longer using the affected suppliers and all payments have been put on hold until finalisation of the legal investigation, where monies will be recovered, including interest and legal costs. There have not been any significant movements on the prices of our instruments and the spread on the Transnet SOC Ltd. Bonds are stable. __________________________ B E GOTHA Manager: Treasury Compliance Date: 12 July, 2017 Transnet SOC Ltd Carlton Centre P.O. Box 72501 Registration Number 150 Commissioner Parkview, Johannesburg 1990/000900/30 Street South Africa, 2122 Johannesburg T +27 11 308 3001 2001 F +27 11 308 2638 Directors: LC Mabaso (Chairperson) SI Gama* (Group Chief Executive) Y Forbes GJ Mahlalela PEB Mathekga ZA Nagdee VM Nkonyane BG Stagman www.transnet.net GJ Pita* (Chief Financial Officer) *Executive Group Company Secretary: NE Khumalo Date: 12/07/2017 03:22:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.