Magwaza was suspended on Monday night pending an investigation into his conduct after he wrote a letter to SA Post Office (Sapo) chief executive Mark Barnes in a bid to get the parastatal to distribute grants when the current contract ends next month.
The Star reported on Friday that Magwaza had incurred the wrath of Social Development Minister Bathabile Dlamini after she got hold of his letter to Barnes.
Social Development spokesperson Lumka Oliphant was not willing to confirm the suspension but could only say: “Sassa has an acting chief executive as of this afternoon (yesterday).”
Oliphant also confirmed that National Development Agency chief executive Thamo Mzobe will act in the position in Magwaza’s absence.
Prior to this, Mzobe was the co-operatives unit senior manager in Dlamini’s department.
Magwaza allegedly wrote to Barnes requesting that the struggling parastatal take over the distribution of social grants when the Cash Paymaster Services (CPS) contract expires in March.
The Constitutional Court ruled in 2014 that the contract had been awarded irregularly.
In the letter, which The Star has seen, Magwaza asks Barnes if Sapo would be able to help distribute the social grants from next month.
“Should it be possible, a transitional arrangement could be entered into through an intergovernmental agreement, which would not necessarily require procurement process,” he wrote.
He then allegedly tried to withdraw the letter when Dlamini became aware of it. The letter was allegedly sent after the deadline for the submission of bids. Sapo is a bidder.
Magwaza confirmed sending the letter, but said there was nothing wrong in doing this.
The Star earlier reported that Dlamini and Finance Minister Pravin Gordhan were headed for a collision course after the latter advised that extension of the CPS contract wasn’t a viable option.
Gordhan allegedly wants a new contract awarded to commercial banks and Sapo, but that it should “exclude biometric verification, which would favour CPS and discriminate against other potential bidders”.