Durban - A communications company owned by a Durban ICC board member has scored contracts worth millions to stage events for the eThekwini Municipality at the conference centre, despite the city’s own audit committee’s warning that it was a conflict of interest.
Ikhono Communications is owned by Zodwa Msimang, the wife of Don Mkhwanazi,the late businessman and ANC benefactor and friend of President Jacob Zuma. It has obtained contracts for at least five major events at the Durban ICC this year alone.
On Tuesday municipal manager S’bu Sithole said the matter had to be dealt with by the ICC’s board first and then referred to the municipality if a conflict arose.
Msimang sits on the board of the ICC, which is a municipal entity, but it has its own management team and board of directors.
Ikhono organised the Durban Maritime Summit in February, the Transnet’s Women’s Day Celebration event in August and the 52nd International Society of City and Regional Planners summit last month. It is also organising next month’s Essence Festival and the annual Business Fair.
Most of the events were co-organised by the municipality.
The contracts appeared to have been awarded despite an audit committee report to the executive committee in November last year which raised the conflict of interest.
At the time Sithole said it was up to the ICC board to define conflict of interest. On Tuesday night he reiterated that, saying that if hard evidence was presented it should be investigated. “All board members should declare their interests and it is the board’s duty to regulate this process.”
The matter was also raised in the ICC’s 2014/15 annual report.
In the report, the Durban ICC notes that the entity’s directors “did not have any declared interest in contracts entered into by the entity, with the exception of ZP Msimang”.
The annual report stated that “Msimang brings events to the entity through her close corporation Ikhono Communications CC, of which she is the sole member”.
Ikhono was paid R519 789 in 2015 and R1 178 612 in 2014.
The company also collected commission of R40 028 for services rendered in 2014.
The ICC did not respond to questions about the conflict. ICC board chairwoman Manto Madlala referred queries to the entity’s chief executive, Lindiwe Rakharebe, and she could not be reached for comment.
The entity’s marketing and sales manager, Scott Langley, said the appointment of board members was handled by the shareholder, which is the municipality.
Sithole said in an e-mailed response on Tuesday that all board members should declare their interests and it was the board’s duty to regulate this process.
“The board should further advise the council whenever it encounters a conflict of interest. Allegations of conflict of interest must be substantiated with hard evidence so that they can be investigated “
Approached for comment, Msimang said she did not understand what the conflict was, saying she was “not Ikhono Communications”.
When The Mercury reminded her that she was listed as the company’s sole director, she retorted: “So what does that mean?”
Defending herself, she said another board member was the director of a hotel which was the Durban ICC’s “direct competition”.
“I don’t understand what you guys are on about; I don’t know what the audit committee’s issue is. But anyway, this is simple; we don’t appoint ourselves on boards, we are appointed by the shareholder - eThekwini. They have seen Zodwa’s skill, and not those of Ikhono Communications (referring to her appointment to the board),” she said.
She referred further questions to the municipality as she said: “Asking me about why I’m there is kind of unfair.”
A senior city official,who asked not to be identified for fear of reprisal, said the city should act on the recommendation, and not the Durban ICC board.
“The audit committee reports to the city, which is responsible for the Durban ICC board as it reports to it (the city),” the official said.
IFP councillor Mdu Nkosi accused the ANC of “doing as they please”.
“It is important for the city to act on the audit committee’s findings and advice. Failing which, there will be a mess in the city.
“The problem with the ANC is that they seek to protect their comrades more than they do taxpayers in the city; they don’t care. This tarnishes the entire municipality,” he said.
DA eThekwini caucus leader Zwakele Mncwango said the party had raised the matter when Msimang had been appointed to the board.
He added that Sithole should account for and act on the audit committee’s recommendations.
“He promised to act on the matter. There are two options: either for Msimang to stop doing business with the city, or she resigns from the board - it’s simple.”
He said he would write to the auditor-general to find out if the city had been acting on the audit committee’s recommendations.@Sihle_MG