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EXCLUSIVE: Ithala expels finance executive over R2.2m theft

Former Ithala Development Finance Corporation and business finance executive Bonginkosi Shangase has been accused of dishonesty and gross misconduct by IDFC, and alleged to have claimed board fees to the value of R2.2 million. Picture: File

Former Ithala Development Finance Corporation and business finance executive Bonginkosi Shangase has been accused of dishonesty and gross misconduct by IDFC, and alleged to have claimed board fees to the value of R2.2 million. Picture: File

Published Jun 14, 2023


Durban — The Ithala Development Finance Corporation (IDFC) has accused business finance executive Bonginkosi Shangase of gross misconduct and dishonesty by allegedly misappropriating and claiming board fees to the value of R2.2 million over a period of 15 years.

In an affidavit sent to Shangase, the IDFC said, “You are guilty of gross dishonesty, gross negligence and or acting in conflict with your employment at the IDFC, while employed as a business finance executive upon the IDFC’s administration and governance”.

Chief executive and Trustee Patt Chilwa sent Shangase an expulsion letter, which read, “Shangase has been in the service of NCI as external audit and risk chairperson of the NCI board for almost 15 years.

“During the said period, the following alleged irregularities are highlighted:

• Claimed board fees to the value of approximately R2.2m over 15 years.

• Unlawfully amended and implemented NCI board charter without approval of the trustees.

• Been actively involved in the management of NCI’s business affairs and has lately misled the NCI’s chairperson to be involved in criminal and fraudulent transactions in the NCI’s bank account with Absa Bank – attempted to withdraw R75 000.

“Shangase’s continuous irregular involvement in the financial affairs of the National Construction Incubator Trust, with the latest correspondence dated May 29, 2023, is against corporate governance on the side of the NCI, and deemed to be a gross violation of the bank and government legislations while moonlighting under NCI,” Chilwa said.

The affidavit further read, “Please take notice that your employer, Ithala Development Finance Corporation (IDFC), a wholly owned entity of the KwaZulu-Natal Provincial Government, hereby institutes disciplinary proceedings against you on allegations of serious misconduct as detailed below:

“You are employed by the IDFC as business finance executive, and you are a registered chartered accountant with the SA Institute of Chartered Accountants, thus you knew, or alternatively should have known that manipulation and or withholding information was wrong and had adverse consequences upon IDFC’s administration and governance.

“In your position, you are requested among others, to adhere to the following policies and statutes:

• The Constitution of the Republic of South Africa, Act 1996 (of the Constitution).

• The Auditing Profession Act 26 of 2005.

• The Public Finance Management Act no 1 of 1999 (as amended) (the PFMA).

• Treasury regulations.

• Treasury Practice Notes.

• The KwaZulu-Natal Ithala Development Finance Corporation Act, 2013 (Act no 5 of 2013).

• The KwaZulu-Natal Ithala Development Corporation Act, 1999 (Act no 2 of 1999).

• The Companies Act, 2008 (Act 71 of 2008.;

• The National Small Business Amendment Act, 2003 (Act no.26 of 2003).

• The IDFC’s Internal Policies and Procedure.

“Note further that these allegations are supported by evidence contained in the documents attached and served to you marked ‘the Employer’s Bundle’.

“Take further notice that, should you be found guilty of the aforegoing allegation, it is the intention of the IDFC to seek your dismissal from your employment, as well as report your conduct to the SA Institute of Chartered Accountants.

“You are the immediate supervisor of Mr Dudula Maoela, the divisional manager Legal Contracting and Recoveries. After receipt of a report requiring you to institute disciplinary proceedings against Mr Dudula Maoela (Mr Maoela), you committed the following acts of misconduct:

Count 1:

“On February 4, 2019, you received a memorandum of opinion from Mr M Nsibande, a senior partner with the legal firm Strauss Daly, wherein, among others, you were advised to institute disciplinary proceedings against Mr Maoela. Mr Nsibande of Strauss Daly issued the memorandum and draft charges. However, you failed or refused to issue charges against Mr Maoela.

Count 2: “On February 8, 2019, you caused and attended a consultation meeting with Mr Dumisani Gwamanda and Mr Nsibande, wherein the findings, recommendations of the investigation report issued by Mr Leo Saunders of the Integrate Forensic Services (IFS) as well as the draft charges prepared by Mr Nsibande were discussed.

“During the said consultation, you misrepresented to Mr Nsibande that IDFC owned 30% of PSQ, whereas, it owned 100% of PSQ. Your statement was incorrect and misleading. As a consequence, Mr Nsibande altered his opinion to the effect that consequently, in the purported disposal of 100% of PSQ the provisions of the PFMA and its regulations would not be applicable, as PSQ was never an asset wholly owned by a consultant.

Count 3:

“On February 12, 2019, you reported to the Board that you were implementing the Strauss Daly memorandum of opinion and draft charges. You misled the board to understand that you were executing your responsibility as the immediate supervisor of Mr Maoela. Whereas, you failed to level charges against Mr Maoela.

By doing so, you acted in breach of your employment contract, in that:

• You had a duty to act in the best interests of the IDFC. You owed the IDFC a duty of care and to act reasonably as a business finance executive and a registered Chartered Accountant in charge of discipline over your supervisees.

• When you were in a consultation meeting with Mr Nsibande, you had a duty to disclose all material information that you were aware of, as a member of the Board of PSQ. Instead, you selectively, and or manipulated the information at your disposal so that Mr Maoela was not charged or called upon to account for the conduct identified through the IFS report.

“Mr Nsibande attended further consultation and prepared a further memorandum of opinion, you caused the IDFC to incur fruitless and wasteful expenditure, which compromised the transparency, efficiency and effectiveness of the IDFC’s funds and administration.”

IDFC’s communications officer Sitandiwe Dimba said that she was in no position to speak on behalf of Shangase since he was at home on suspension.

All attempts to get comment from Shangase failed. His phone rang unanswered, SMS and WhatsApp messages sent to him were not replied to, neither an email.

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