Johannesburg - Five months after suspending its principal executive officer, government’s pension fund is poised to lay charges against its former spokesman for his alleged role in irregularly inflating a R500 000 media and advertising tender to R21 million.
The former communications manager, Khaya Buthelezi, was fingered along with principal executive officer John Oliphant, board secretariat head Adri van Niekerk and two Government Pension Administration Agency employees Mandla Mashaba and William Ramoroka for the exorbitant tender irregularities in a scathing forensic report released by PricewaterhouseCoopers late last year.
The tender was awarded to Johannesburg advertising firm MotherRussia.
The forensic report, which had been under wraps since its release, states that “corrective action” was to be considered against Ramoroka, Mashaba, Van Niekerk and Oliphant.
“Considering that Mr Buthelezi has resigned from the Government Employee Pension Fund, legal counsel should be sought with respect to the prospects of appropriate recourse against him,” stated the report.
The Sunday Independent has been reliably informed that the board has decided to lay charges against Buthelezi.
Board chairman Arthur Moloto would, however, not confirm this on Saturday.
Buthelezi said: “I’ve never seen the report. It’s no longer my matter. I can’t comment on the veracity of the allegations. I know exactly what happened there (in the advertising tender). Until I see the report itself, I am not prepared to comment.”
Oliphant was suspended in October, less than one month after Buthelezi resigned from the fund.
Van Niekerk was put on special leave in November, while Mashaba and Ramoroka are said to be facing charges.
Mashaba could not be reached for comment and Ramoroka denied that he was facing charges.
Moodley confirmed that the board had formally informed the pension administration agency of Mashaba and Ramoroka’s being implicated in the tender, through its chief executive Goolam Aboobaker.
“I am however not sure where the processes currently are,” said Moodley.
Aboobaker could not respond to questions about the disciplinary processes as he was in a meeting.
Oliphant and Van Niekerk will appear before a next disciplinary committee on March 17, to face at least four charges which include financial misconduct and negligence. Moloto was once again tight- lipped.
The developments come on the back of widespread criticism against the fund for its suspension of Oliphant, who is said to have been highly regarded in the industry and won an international award towards the end of last year for his leadership of the fund.
Some say his suspension is politically motivated and has been linked to a recent R2.5 billion investment by the fund’s Public Investment Corporation into the JSE listing, Camac Energy, whose controlling shareholder Kase Lawal is a donor to President Jacob Zuma’s education trust.
The board has come under fire for failing to wrap up the hearings against Oliphant and Van Niekerk.
But sources close to the investigation, who did not wish to be named as they are not mandated to speak on the matter, said that it was Oliphant and Van Niekerk who were using delaying tactics during the disciplinary hearings. Among these were their asking the chairwoman to recuse herself from the matter; Oliphant’s allegedly falsely stating he wanted to settle the matter; and not having the correct legal representative present.
Contacted on Saturday, Oliphant said: “I honestly can’t comment on any of the issues. When the time is right I will set the record straight.”
Van Niekerk said she was not allowed to speak to the press and referred queries to Moloto and acting principal executive officer Joelene Moodley.
Van Niekerk’s involvement in the tender, according to the report, is based on her having signed off the R531 558 tender as the acting principal executive officer while Oliphant was on leave, without sending the tender to the bid committee for final approval.
According to the fund’s supply chain management policy, any tender between R500 000 and R2m has to go to the bid committee for final approval.
But the 84-page forensic report states that there was no board resolution approving the tender.
The tender was never referred to the bid committee and no explanation was given for why the tender was not referred to the bid committee,the report says.
When the tender costs escalated to R2m, the report says, Buthelezi initially got Oliphant to sign it off as transactions of up to R2m were within his delegations of authority.
However, when the costs skyrocketed to more than R2m, Oliphant requested from the board that his delegation of authorities be extended so that he was able to sign invoices beyond R2m for the GEPF brand roll-out project.
Part of the contention is that Oliphant wanted the Benefits and Administration Committee to give him the go-ahead when the matter should have been dealt with by the Finance and Audit Committee.
Although the matter was scheduled to be discussed in the latter committee, Oliphant allegedly removed the memo from the agenda at the eleventh hour.
According to the report, the three-year advertising plan of just over R530 000 would however exclude production costs and the purchasing of airtime.
The total cost of the project would be in the region of R16m, says the report.
The estimated financial implications included a GEPF TV commercial at R5.6m and media buying for television, radio and print at R11m.
The adjustment was a 276-percent increase on the R531 555 that MotherRussia was contracted on, contravening sections of the supply chain management policy, which requires that requests for increases in contracts should be channelled through the bid committee.
Buthelezi had told a colleague that MotherRussia would manage outsourced services from external service providers.
MotherRussia would charge a 25 percent mark-up as per the service level agreement and on these services from the service providers.
This, according to the report, is despite fund’s supply chain management policy only allowing for a 20 percent variance of the contract price.
Their review of certain sections of the policy “indicated that GEPF, through the bid committee, may order an increase in the quantity of goods or services on condition the quantity or value… does not increase by more than 50 percent,” states the report.
MotherRussia issued six invoices totalling R655 170.46. Three of them, as stated in the report, were for services requested by Buthelezi but out of the scope of the advertising tender.
The deal with MotherRussia was cancelled last year – and according to the report, there was no contract or service level agreement signed.
Despite this, between October 2012 and February last year, R600 000 had been paid to MotherRussia.
Festus Masekwameng from MotherRussia confirmed that the contract had been terminated early last year.
“We have asked for clarity surrounding the decision but we have yet to hear from them,” he said.