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Prasa terminates contracts of three executives ’who knowingly overstayed five-year limit’

File picture: African News Agency (ANA)

File picture: African News Agency (ANA)

Published Jan 30, 2021


Cape Town – A review of executives’ contracts has led to the Passenger Rail Agency of South Africa (Prasa) terminating the employment of three executives.

All executives at Prasa are employed for a period not exceeding five years, with no expectation for extension of the employment contract, said the Prasa board of control’s Leonard Ramatlakane in a statement on Saturday.

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However, it transpired upon analysis of employment contracts of executives that some of them ought to have left Prasa years ago, he said. It’s believed that they had capitalised on the instability of the board to extend their employment unlawfully.

Legal proceedings will also be instituted against two of the executives for financial losses incurred by Prasa due to their alleged unlawful actions.

Ramatlakane noted that the Auditor-General had pointed out in a report that ’’there was no culture of consequence management at Prasa’’.

Last year, Prasa obtained the worst audit opinion for 2019/20 for the second year in a row due to material misstatements in its financial statements. The entity also emerged as the biggest contributor to fruitless and wasteful expenditure to the tune of R48.3 million within the transport portfolio.

Ramatlakane said: ’’The board also observed that the executives have been aware at all material times that their employment contracts were for five-year period and not more.

’’However, it appears the executives capitalised on the instability at the board level, culminating in their extended and unlawful stay at Prasa.’’

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The following executives’ contracts were terminated with immediate effect on Friday, he said:

* Martha Ngoye, Group Executive: Legal, Risk and Compliance, who was initially employed in 2012 as CEO of Intersite, one of PRASA’s subsidiaries. Effective from 1 September, 2015, she was transferred to her current position.

Ordinarily, Ngoye’s stay at PRASA ought to have terminated on 31 August, 2020. Prasa also resolved to institute legal proceedings against Ngoye for allegedly unlawfully approving payment of R58 million to SA Fence & Gate when she had no authority to do so.

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* Nkosinathi Khena, Chief Operations Officer, allegedly reinstated the SA Fence and Gate’s contract knowing of the company’s breach (SA Fence & Gate), which was also brought to his attention by National Treasury in a letter dated 21 April 2016. An amount of R25m was paid to the said company without requisite authority and/or approval.

Khena was at the time Acting-Group Chief Executive Officer and his unlawful conduct caused Prasa to incur financial loss. Further, Khena reinstated Ngoye, who at the time was lawfully suspended by Lucky Montana (Group CEO at the time) for unlawful approval of R58m to SA Fence & Gate.

Prasa will institute legal proceedings against Khena for financial loss Prasa suffered due to unlawful conduct. Khena has been on suspension and his employment contract was terminated.

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Khena’s role in allegedly unlawfully appointing the Werksman firm of attorneys will also receive priority.

* Pearl Munthali, Chief Executive Officer of Prasa Foundation,the has been on suspension for alleged misconduct. Upon perusal of records, it transpired that Munthali's contract ought to have been terminated upon the expiry of a five-year term.

’’Consistent with the recommendations from the Auditor-General, the board will ensure that systems are put in place at Prasa and the core business of running passenger rail is restored,’’ Ramatlakane said.

’’The Auditor-General in its report on Prasa noted that there was no culture of consequence management. The board has assured the AG and Minister of Transport that consequence management would be one of the priorities implemented to clean up Prasa.

’’The Acting Group Chief Executive Officer, Thandeka Mabija, will appoint firms of attorneys to specifically deal with consequence management at Prasa. This process will proceed without delay and should be concluded expeditiously.’’


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