North West premier Supra Mahumapelo. Photo: Itumeleng English

Johannesburg - Senior North West managers are facing the possibility of being subjected to lifestyle audits if recommendations of a damning forensic report are anything to go by.

The report has fingered several management executives and board members of the Northwest Transport Investments (NTI) Group in acts of brazen corruption involving millions of rand.

The investigation was commissioned by North West Premier Supra Mahumapelo late last year in terms of the Public Management Act after the top brass of the entity levelled serious allegations and counter-accusations of corruption, nepotism and wasteful expenditure against each other.

The report has recommended that criminal and civil steps be taken against those implicated in fraud and corruption as well as dereliction of duties. It also asks for lifestyle audits to be conducted on some of those fingered as there was prima facie evidence that they had a relationship with some of the service- providers.

The NTI is solely owned by the North West provincial government through its subsidiary, Northwest Star, which has been the primary source of transport in the province since its inception during the days of Bophuthatswana.

With the growth of the company, transport services were also extended to thousands of commuters in areas of Limpopo, Mpumalanga and Gauteng provinces. There were also talks between the North West and Gauteng provincial governments last year after the latter had shown an interest in acquiring the estimated R6 billion company, which annually transports more than 30 million passengers.

Mahumapelo had to intervene last year when feathers flew after the NTI’s then-suspended acting chief executive Kgabo Mapotse blew the whistle on acting board chairman Themba Gwabeni.

However, Gwabeni denied any wrongdoing and instead retaliated with counter-allegations against Mapotse.

The report, a copy of which The Sunday Independent has seen, was recently presented by forensic firm C.15 Protection and Cleaning Services to the NTI board of directors and the premier’s office.

The initial scope of the probe was for alleged misconduct and unlawful activities against the chief financial officer and the employee relations manager, when the firm was appointed in September last year. A preliminary report was presented to the board in October while the final one was completed on December 15.

The report, which is now being studied by Mahumapelo, exposes significant irregularities in the appointment of key personnel, the awarding of contracts without due processes being followed and the disregarding of board decisions.

In one instance, the report highlights the case of the suspension of a contract between NTI and Blue Apple Tree Brand Consultancy and Design, in which the investigation discovered that the chief financial officer disregarded a board decision to pay the company R834 744 for services rendered.

Blue Apple subsequently took the NTI to court and had to pay an additional R2.2m in interest and legal fees. This money excluded the legal fees that the NTI had to pay its own attorneys.

The investigators were unable to obtain the file for the payment of attorneys representing the NTI Group. They concluded that it was a case of clear dereliction of duties by the chief financial officer (CFO) under the Public Finance Management Act (PFMA).

Provincial government spokesman Brian Setswambung confirmed the receipt of the report by the Premier’s office.

NTI Group chief executive Radinaledi Mosiane said he was aware of the report but had not yet met with the forensic firm’s management.

Some of the other findings are:

* The appointment letter of a service provider, Josselin Trading and Projects Close Corporation, was signed by the CFO on June 25, 2015, while the motivation to appoint the very company was dated June 29, 2015. Normal procedure is that the motivation to appoint a service- provider is based on the strength of the adjudication process’s recommendations. In this case, the motivation letter preceded the appointment letter.

This was a clear indication that tender procedures were violated and a principle of fairness never applied. Josselin Trading CC was paid R200 000 in July and August 2015, as a result of the CFO violating procurement policy and disregarding the board’s directive.

* In the case of the appointment of MSMM and MSMM JV as service-provider and all payments made to this vendor, the investigation discovered the evaluation committee never sat to evaluate the companies which had applied for this tender and no reason was given by the CFO.

The MSMMC and MSMM JV was appointed outside the tender process by the instruction of the then-chairman of the board, Gwabeni. At least R1.2m was paid to this company from January to May 2015.

* In the case of claims and disbursements for travel and accommodation for directors since 2013, the investigation uncovered that in most of his cases, Gwabeni, did not complete the prescribed forms. Instead, he would send an e-mail asking the CFO’s office to process his payments. Forms submitted on his behalf by the CFO’s office were not verified by the company secretary and were approved by the CFO.

These particular forms are designed in a way that they should be verified by the company secretary before approval. The total sum of money paid to Gwabeni for the period from January 2014 to date was R134 445.

* In the case of the appointment of Lindiwe Mthunzi, the investigation learned that her appointment letter was handed to Ruben Essakow, the acting human resources manager at the time, by Rantao, acting chief executive to process the application. Essakow then gave Mthunzi the application for employment forms to complete, seeing that Mthunzi did not apply for the position, but was appointed as a consultant. The normal expectation is that since Mthunzi was appointed from the MEC’s office, the salary and benefits should be paid from the province’s budget and not the NTI.

The report recommends that the CFO, Rantao, be charged with gross misconduct, dereliction of duties; that Milanzi, the labour relations manager, should repay R516 402 that was paid for legal services in a labour dispute, while the matter was handled by an internal employee; that then-acting chairman of the board, Gwabeni, be charged under Section 50 of the PFMA as well as the Companies Act for breaching his fiduciary responsibilities and by committing the NTI to long-term contracts while aware he did not have powers to do so; that officials implicated in the legal fees cases be charged with fraud and the money recovered; and that lifestyle audits be recommended on all implicated officials.

The Sunday Independent