City manager’s secret debt

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Copy of nt sithole (40524132) INLSA Durban City Manager Sbu Sithole. Photo: SIBUSISO NDLOVU

 

Durban’s municipal manager, Sibusiso Sithole, totted up almost R2 million in bad debt, defaulting on his income tax and forcing his creditors to go to court.

While managing the city’s budget of over R30 billion, Sithole failed to manage his own finances. His creditors have secured five default judgments against him between 2010 and 2012.

He now faces dismissal for failing to declare his bad debt before his appointment, and defaulting on personal income tax of over R200 000 during his tenure at city hall.

Opposition parties and civic bodies have called for his removal from office, as well as a public protector probe into his financial affairs.

Sithole said in response that “most” of his debt had been settled.

A Sunday Tribune investigation has revealed that:

l The first judgment was granted in April 2010 for R2 645 in the Durban Magistrate’s Court to Cressington Body Corporate for unpaid levies. Cressington is a block of flats in Russell Street.

l The second judgment, two months later, was again granted to the body corporate for R3 071, again for unpaid levies.

l On the eve of his appointment as city manager, First Rand Bank secured a default judgment of R1.3m, when Sithole defaulted on a mortgage bond.

l In 2012, while in his current position, First National Bank won a default order against him for R368 000 for another unpaid mortgage bond.

l In July 2012, the SA Revenue Service secured a default judgement for income tax to the tune of R200 000.

Sithole was appointed in 2011, and hailed as a new broom to sweep clean Durban’s affairs. He was subjected to the city’s external labour vetting process, run by controversial businessman Paris Dlamini.

Dlamini’s Ekhuseni Consulting gave no indication of Sithole’s default judgments, available by using a public documents search.

The city manager has a portfolio of six properties: a home in Ronan Street in La Lucia, a property in St George’s Street in Cape Town, a flat in central Durban, a property in Umlazi, as well as residences in Monteseel and Hillier Road in Umbilo.

Paul Hoffman, chairman of the Public Service Accountability Monitor, said Sithole did not live up to the values of public service in the constitution.

“If he does not have a reasonable explanation that accounts for each and every judgment, he should resign,” he said.

“If he does not resign, the city should investigate the propriety of keeping him in a position of great responsibility. If the city does not take steps against him, it should be reported to the public protector for maladministration for harbouring an income tax defaulter,” he added.

The DA’s Durban caucus leader, Zwakele Mncwango, said the judgments called into question Sithole’s ability to manage the city’s finances.

“These amount to almost R2m. It is a serious indictment. It blights his ability to manage the affairs of a city as complex as eThekwini. For a man who earns more than a R2m a year, he should have his own affairs in order,” he said.

Mncwango said Sithole had failed to declare these judgments, and this alone was grounds for dismissal.

“In blunt terms, Sithole must go and the DA will pursue every avenue to see he is shown the door. I will write to mayor James Nxumalo and request he table the matter before the executive committee.”

IFP caucus leader Mdu Nkosi called for an investigation. “I will ask the executive committee to investigate. This man is in the highest office. He is supposed to be beyond reproach.”

Full statement

In response, municipal spokesman Thabo Mofokeng said: “The matters raised about the city manager are personal and private, and do not in any way relate to his ability to perform his duties as the accounting officer of eThekwini Municipality.

“Mr Sithole acknowledges that at a certain stage he did experience cash-flow difficulties prior to his employ, and these must be understood in the correct context. It must be noted that by the time of his employment by the city in January 2012, most of these issues had already been resolved.

“The cash-flow challenges emanated from a period when Mr Sithole was employed as an administrator at Ukhahlamba Municipality in 2010 and had gone for a period of four months without pay.

“He had to use his own resources to fund his travel and accommodation costs, which led to his falling behind with bond and levy payments for his two rented properties.

“This coincided with the fact that he experienced problem tenants who had not kept up with rental payments, which at one stage left him with a debt of R30 000 in unpaid electricity.

“However, these matters were sorted out with his creditors as soon as he received payments from his employers. Where necessary, payment arrangements were made to settle outstanding debts.

“The matter related to Sars emanated from the 2003 lump-sum payment from his pension fund and there was a dispute related to his tax assessments. Arrangements were made with Sars to pay the outstanding amounts and as far as he is concerned there are no outstanding payments to the taxman.

“All these issues do not reflect on Mr Sithole’s ability to run the municipality. Like any consumer who may at a particular stage run into difficulty, he has taken the necessary steps to remedy the situation. It is also worth noting that these matters relate to the period prior to his current employment and have no effect on the municipality.

“It is, however, worrying that there seems to be a concerted campaign of character assassination… (to taint) the good name of the city manager, which could be viewed as an attempt to derail his focus on leading the municipality towards achieving a clean audit and further improve our service delivery record.”

Sunday Tribune


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