Victims of the VBS Mutual Bank (VBS) scandal who lost their life savings say it is ironic that Economic Freedom Fighters (EFF) members are demanding the return of “stolen” land while failing to pay back the money they allegedly received unlawfully from the bank.
An unlawfully appointed municipal manager in Limpopo, who “irregularly” deposited R50-million into VBS Mutual Bank, continued to advertise lucrative tenders despite a high court order against him.
A municipal trade union fears that Morris Maluleke — who was found by a Limpopo high court last month to have been unlawfully appointed as the dysfunctional Mogalakwena local municipality’s manager — will “loot” the embattled local government after advertising 14 tenders after the 13 September judgment.
The high court in Polokwane set aside Maluleke’s appointment because the panel that recommended his appointment was “unlawful and improperly constituted”.
One of the tenders Maluleke advertised was for the supply and delivery of municipal vehicles on full maintenance lease for 36 months. The advert appeared on 27 September, with the closing date being 1 November.
In a briefing to parliament in March last year, the Special Investigating Unit flagged what it called the illegal award of a tender for a fleet of municipal vehicles valued at more than R190-million during 2018 in the Madibeng local municipality in North West, while Maluleke was its chief financial officer.
In court papers filed last week seeking to interdict the suspension of 24 workers at Mogalakwena municipality, the South African Municipal Workers’ Union (Samwu) raised its concerns about Maluleke’s previous involvement in alleged illegal fleet management contracts.
Samwu’s senior national legal officer Tebogo Tlatsi said Maluleke did not have “a clean record in managing municipalities”.
“He does not stay more than three months at a municipality. Once appointed in a municipality, he enters [into] unnecessary fleet management contracts at higher than normal rates, binding municipalities into long-term unnecessary and fruitless expenditure,” Tlatsi stated in the affidavit.
Sources in Mogalakwena municipality echoed Tlatsi’s contention, saying that Maluleke had suspended the 24 municipal employees, including all 12 shop stewards belonging to Samwu, in order to ram through the fleet contract, as well as the 13 other tenders unimpeded.
The Mail & Guardian has seen a document authored by Maluleke, in which he selected five members of the bid specifications committee and five people to be part of the bid evaluation committee for the fleet management tender.
The selection document was signed by Maluleke and is dated 27 September, the same day on which he suspended the 24 members.
One source who asked to remain anonymous said the timing of the suspensions was intentional so that Maluleke could enter into another “illegal fleet management contract”.
“Currently, Maluleke has appointed junior officials to sit on the bid specifications, bid evaluations and bid adjudication committees. These officials do not qualify as most of them are not managers,” the source said.
“The reason for the appointment of junior officials to these committees is Maluleke is racing against time to complete the fleet management contract before he leaves Mogalakwena.”
Tlatsi stated in the interdict affidavit that Maluleke had no right to suspend the 24 municipal employees because the workers “were not given an opportunity to make written representations regarding why they should not be dismissed”.
“The second respondent [Maluleke] did not have the authority to issue notices of intention to suspend because his appointment as a municipal manager had been set aside by the [high] court. The first respondent [Mogalakwena] only filed an appeal [to the high court ruling] on 29 September 2022,” Tlatsi asserted.
VBS investment
In 2018, Maluleke deposited R50-million into VBS while he was chief financial officer of Madibeng, but only R20-million of that money was recovered following the collapse of the mutual bank. It is a contravention of the Municipal Finance Management Act for municipalities to deposit money into mutual banks. Maluleke resigned from Madibeng at the end of 2018 before an investigation into him could be completed.
It has now emerged that the Mogalakwena council appointed him as the municipal manager despite warnings from the national cooperative governance department that Maluleke was involved in the VBS scandal.
The warning was delivered to the Mogalakwena municipality in a letter signed by Mbulelo Sigaba, the cooperative governance department’s acting director general for institutional development. Sigaba’s letter, which the M&G has seen, is dated 24 April 2022.
“Although Mr Maluleke does not appear in the record of dismissed staff, the municipality’s attention is drawn to the fact that, while acting as chief financial officer and municipal manager, respectively, at Madibeng local municipality, the municipality was allegedly implicated in the VBS Mutual Bank investment,” Sigaba wrote.
Speaking on behalf of Maluleke and the municipality, Mogalakwena spokesperson Malesela Selokela said the municipality filed its notice to appeal within 14 days of the 13 September ruling, and that all decisions implemented and signed after the judgment were legal, pending the outcome of the appeal.
“There is no cloud hanging over Mr Maluleka because all processes were followed prior to his appointment by council. Mr Maluleka was cleared by his previous employer Madibeng local municipality that he was never implicated in the VBS saga,” Selokela said, without elaborating on how exactly Maluleke was cleared.
“Mr Maluleka has never appointed a fleet contract while in Madibeng municipality neither invested a mere cent of Madibeng to VBS.”
On Maluleke’s appointments in Mogalakwena tender committees, Selokela said: “The accounting officer [Maluleka] has a right to appoint any official to sit [on] the bid specification and evaluation committee. Section 79 and 106 of the Municipal Finance Management Act empower the accounting officers to delegate powers or duties to an official to assist the accounting officer in ensuring the achievement of the aims of a specific provision of the [Act].”
Democratic Alliance MP Cilliers Brink said in September 2019 that the cooperative governance and traditional affairs department should publish a watchlist of municipal managers and chief financial officers who were implicated in the VBS scandal.
Brink’s call was in response to Maluleke’s then appointment as the municipal manager for the Waterberg district municipality in Limpopo.
“Municipal managers and [chief financial officers] who have already jumped ship must be held to account by the municipal councils where they now work. It cannot be that they are rewarded for putting entire municipalities at risk,” Brink said.
“This will discourage municipal councils from appointing senior officials who have resigned from another municipality in order to buck disciplinary consequences.”
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