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Executive who saved Prasa billions has been fired

South Africa

GROUNDUP

Executive who saved Prasa billions has been fired

The Labour Court in Johannesburg has ruled that three executives who were fired by the Passenger Rail Agency of South Africa (PRASA) are to return to work on 6 April. (Archive photo: Ashraf Hendricks)

Dismissal of three executives on spurious grounds is a setback against the fight against corruption.

First published in GroundUp.

The head of the Passenger Rail Agency of SA’s (Prasa) legal division, Martha Ngoye, who probably saved Prasa billions, has been fired, according to a statement by the chairman of the board of control, Leonard Ramatlakane. Two other executives have also been dismissed, on what look like spurious grounds.

On Saturday 30 January, Ramatlakane announced that three Prasa executives had overstayed the five-year terms of their contracts and had their employment terminated. The three are Ngoye, Nkosinathi Khena and Pearl Munthali. Ngoye was group head of legal, risk, and compliance. The other two were on suspension.

Ramatlakane also announced that “Prasa has also resolved to institute legal proceedings against Ms Ngoye for unlawfully approving payment of R58-million to SA Fence & Gate when she had no authority to do so,” and against Khena for, “financial loss it suffered due to unlawful conduct of Mr Khena”.

Ngoye has been the central figure at the rail agency in its fight against corruption. She has helped Prasa win court victories against Swifambo, Siyangena, and Siyaya. It was Ngoye’s defiance that rebuffed Judge Tintswalo Makhubele’s attempt to improperly settle with Siyaya. Further, Ngoye’s testimony at the State Capture Commission revealed the depths of former CEO Lucky Montana’s corrupt leadership of Prasa.

Without her interventions, Prasawould have lost many billions of rands.

Ramatlakane said that during a review of executive contracts, ”it transpired upon analysis of employment contracts of executives that some of them ought to have left Prasa years ago. All executives at Prasa are employed for a period not exceeding five years with no expectation for extension of the employment contract.”

This policy, unannounced in the press at the time, was seemingly instituted in 2019 during the tenure of former Chair of the Interim Board, Khanyisile Kweyama. That board did not have a quorum at the time, and so any decisions that it made were subject to review. Further, the current board is not quorate either, lacking a representative from the Department of Transport, at least. This means that any decisions that this board makes are subject to review and that Minister of Transport Fikile Mbalula is in contempt of a ruling of the Western Cape high court.

Ramatlakane also said that the executives “have been aware at all material times that their employment contracts were for a five-year period and not more”.

However, he said, “it appears the executives capitalised on the instability at the board level, culminating in their extended and unlawful stay at Prasa. On 29 January 2021, Prasa has terminated the employment contracts of the following executives with immediate effect.”

It is open to question that it is the responsibility of the employee, and not the employer, to ensure that they are not staying on beyond the term of their contract.

He said Ngoye had initially been employed in 2012 as CEO of Intersite, one of Prasa’s subsidiaries. “Effective from 1 September 2015, she was transferred to her current position. Ordinarily, Ms Ngoye’s stay at Prasa ought to have terminated on 31 August 2020.”

After a hearing in September last year, in October, Prasa, led by Ngoye’s legal team, won a resounding victory in the Siyangena matter, in a judgment by a full bench of the North Gauteng high court. Siyangena is appealing the judgment, but the appeal is unlikely to succeed. Given Ngoye’s many successes as head of legal, one might reasonably expect Prasa to want to retain her services. On the contrary, Ramatlakane said, “Prasa has also resolved to institute legal proceedings against Ms Ngoye for unlawfully approving payment of R58-million to SA Fence & Gate when she had no authority to do so.”

GroundUp reported on the SA Fence and Gate issue, in 2018. Ngoye was not one of the key figures involved. In fact, the report from Nexus, commissioned by National Treasury following the Public Protector’s Derailed report makes no mention of Ngoye.

In the Werksmans Attorneys investigation, Ngoye is mentioned in regard to the extension of the contract. But she is peripheral at best — the key player in this story is Palello Lebaka. According to Werksmans’ report, in January 2015, Ngoye was acting as Group CEO while Lucky Montana was on holiday. Ngoye was presented with a recommendation report from Josephat Phungula on behalf of the Bid Advisory Committee (BAC). Lebaka had been fired after his corrupt dealings were uncovered. Nevertheless, according to the BAC, Prasa still required lights that were included in the contract, and they recommended to Ngoye that an outstanding amount of R23-million be paid to complete this transaction.

According to the internal policy of the time, group CEOs of Prasa have the authority to sign off on contracts below the value of R100-million. The extension would have been presented to the board after Ngoye’s signature was attached, and the board would have approved this transaction.

In his affidavit, SA Fence and Gate executive Chris Greyling, alleged (from page 20 of this pdf) that his company’s troubles at Prasa were orchestrated by a competitor — Siyangena.

Turning to the decision to fire Khena, Ramatlakane said when Khena was acting group chief executive, he had reinstated the SA Fence and Gate contract “knowing of the company’s breach” and that this breach was also “brought to his attention by National Treasury in a letter dated 21 April 2016”.

“An amount of R25m was paid to the said company without requisite authority and/or approval,” said Ramatlakane. “Mr Khena was at the time acting-group chief executive officer and his unlawful conduct caused Prasa to incur financial loss.”

However, the record of the Standing Committee on Public Accounts (SCOPA) from February 2016, shows that Khena had little choice in this decision, as the company had won a court order to reinstate the contract.

Further, said Ramatlakane, “Mr Khena reinstated Ms Ngoye, who at the time was lawfully suspended by Mr Lucky Montana (group CEO as the time) for unlawful approval of R58-million to SA Fence and Gate”.

But in fact, Montana was forced to backtrack. As recounted before the State Capture Commission, in May 2015, Ngoye’s subordinate Fani Dingiswayo had refused to sign-off on a Montana-engineered deal worth more than R80-million, with a company called Prodigy. Dingiswayo had discovered irregularities in that deal, and when he challenged Montana, Montana fired Dingiswayo on the spot — illegally.

The next day, when Ngoye went to find out from Montana what had happened, she too was illegally fired by Montana. A week later, after the intervention by the board (chaired at the time by Popo Molefe), Montana was forced to commute the terminations of their contracts into suspensions. Then, after Montana resigned in disgrace from Prasa, Ngoye and Dingiswayo were reinstated by Khena after being cleared of misconduct.

Ramatlakane said Prasa would “institute legal proceedings against Mr Khena for financial loss it suffered due to unlawful conduct of Mr Khena”.

As regards Munthali, the suspended CEO of the Prasa Foundation, who has also been fired, Ramatlakane said she “has been on suspension for alleged misconduct. Upon perusal of records, it transpired that Ms Munthali’s contract ought to have been terminated upon the expiry of a five-year term.”

He does not mention that all charges against Munthali were dropped by Prasa.

GroundUp sent Prasa spokesperson Bane Ndlovu detailed questions, but he had not responded by the time of publication. His response will be added if/when it is received. DM

 

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  • I stopped reading when I got to this sentence, “Ramatlakane also said that the executives “have been aware at all material times that their employment contracts were for a five-year period and not more”.” A previous sentence mentions, “All executives at Prasa are employed for a period not exceeding five years with no expectation for extension of the employment contract.” The mention of “no expectation” simply means it cannot be guaranteed. However, if the officials performed well, there is no reason why they could not be re-contracted. In fact, good governance would assume that you retain good officials.

    This “gambit” has been used at all levels of government and in municipalities, by all parties, to get rid of officials who do not toe the political line. I would love to see an investigation into so-called “contracts expiring” at municipalities over the past 15 to 20 years. The direct and indirect cost implications are staggering. How about it DM?

    The legislative framework at municipalities does not allow politicians to interfere with administration. So the gambit is employed to appoint top management at five year contracts, and then get rid of them if they do not “perform” as politicians would like them to. Alternately, they are charged, many times spuriously, and after a year or so, their contracts are cancelled due to a “breakdown of trust”. Often, the remaining contracts get paid out, so the official cannot claim financial loss, while the rate payer pays for the exercise. Most officials cannot afford to go to court, as they have to use there own funds to fight a legal battle paid for with public money.

    There are 100s of examples. Just go count the number of a city’s management that has been gotten rid of, and question whether statistically so many officials could all have been bad. That’s why so many positions have “acting” managers in charge.

    The sad thing is that his gambit plays to the popular public “belief” that “officials are all corrupt”. The reality is that this country still survives due to many dedicated officials who just bow their heads and do their work, in spite of shenanigans.

    Government has long ago changed the rules, allowing for permanent appointment of managers. Some municipalities still “prefer” to use contract appointments. Ask why. Check who these are and ask them why. It will be interesting to ask the political parties what their policies say.

  • Question is, what qualification does Ramatlane have to run one of our most important – and most broken – SOEs? An investigation would reveal that he has very little experience in running anything. The game of cadre musical chairs continues.

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