MEDIA RELEASE BY MAANDA MANYATSHE ON 21 SEPTEMBER 2006
On 13 September 2006 M&G dispatched a questionnaire, incorporating allegations and calling for responses to allegations of fraud, corruption and mismanagement within the South African Post Office in relation to the award of a contract. The questionnaire was not dispatched to Mr Manyatshe but into the MTN e-mail system. A copy of the entire questionnaire is set out below and Mr Manyatshe’s responses, in the circumstances, are correspondingly recorded.
Mr Manyatshe is presently the managing director of MTN South Africa. Prior thereto, Mr Manyatshe was the chief executive officer of Sapo.
During his five year tenure as CEO of SAPO:
- Mr Manyatshe was confronted with a loss-making organisation draining state resources of nearly R1-billion per year, and accumulated pension and medical aid deficits of R1,2-billion and R1,8-billion respectively;
- In the course of his duties as CEO, Mr Manyatshe was required, at various times and using accepted Post Office procedures and with the authority of the board, to implement various processes, utilising the so-called ”tender deviation process” -‒ a legitimate procurement policy at SAPO. These included the upgrade of more than 200 post-offices across the country and in respect of which Vision Design was appointed project manager;
- a request had been generated from the group executive: supply-chain management of Sapo by Mr Manyatshe, as the CEO, to approve a tender deviation process. This is a legitimate process within Sapo procurement procedures;
- Sapo’s internal audit division, investigating the tender deviation process in respect of the Vision Design contract, reported that such a deviation was justified. Sapo’s internal audit documentation verifies that the deviation process adhered to Sapo’s procedural requirements. The manager of internal audit reported to supply-chain management, after conducting an investigation into the circumstances, that the deviation process from the tender procedures was justified in respect of this contract and he recommended that a resolution from the board be obtained to support the contract. The board, on considering the matter, validated and ratified the process;
- Mr Manyatshe was commended by the board and has been widely acknowledged for the turn-around achieved in achieving profitability for the first time in Sapo’s 200-year history and achieving a significant improvement in services to the public and Sapo’s corporate and institutional clients;
- Mr Manyatshe is credited with resolving the shortfalls in the pension fund and the medical aid fund. Overall, Sapo was in the healthy position of making a surplus rather than draining funds from the state as it had always done before.
Mr Manyatshe launched an urgent application to the High Court to prevent the publication of what he believed to be defamatory and false allegations made in the questionnaire against him. In the course of the court application, it became apparent that the basis of the questionnaire and the intended article to be published by M&G was an affidavit submitted by Mr Mampuele, the present CEO of Sapo, in court proceedings which the contractor, referred to in the questionnaire, Vision Design House, instituted for payment of outstanding monies.
This affidavit by Mr Mampuele is the sole source of the allegations against Mr Manyatshe in the questionnaire. The allegations in the affidavit have never been tested in court and in fact are contrary to the finding of internal audit and procurement divisions of Sapo.
M&G records in the questionnaire and in the court proceedings that criminal charges have been laid by Sapo against me. Mr Mampuele alleged in the court proceedings that the board authorised the criminal proceedings against me and produced a resolution supposedly in support of this. The resolution is unsigned and makes no reference to or any authorisation given for criminal proceedings to be instituted against me.
On Thursday 21 September 2006, the urgent application was dismissed. Mr Manyatshe’s legal team will be studying the written judgement when it becomes available and his options in respect of the court’s findings of fact and law.
At the time of approaching the court, Mr Manyatshe felt he had a legal basis to prevent publication of the allegations, relying on his right to privacy, dignity and reputation and court precedents upholding these rights. The court, in dismissing Mr Manyatshe’s application and allowing the publication of the intended article by M&G, rejected these rights in favour of the media’s right to freedom of speech, particularly in the circumstances that Mr Manyatshe is a public figure. In the circumstances, Mr Manyatshe believes it is now appropriate to respond to the allegations, to place his version on record and to set the record straight. In responding, Mr Manyatshe will also provide documents validating and verifying his version.
The entire questionnaire, incorporating the 16 separate questions and the responses of Mr Manyatshe, is attached.
Mr Manyatshe and his legal team have documentary evidence to validate and prove all of the allegations and contentions set out herein, unlike the unfounded allegations and accusations made by Mr Mampuele and M&G against him.
Questions — Vision Design House matter
Please respond by 10am, tomorrow, Thursday September 14 2006
You can respond to Sam Sole on 082 418 8944 email [email protected]
Stefaans Brummer on 083 274 7438 email [email protected]
It has come to our attention that charges have been laid with the South African Police Service by the chief executive officer of the SA Post Office, Mr Khutso Mampeule, against four entities. Namely: Miko No 167 t/a Vision Design House, whose principals are Mandla Msimang and Joseph Ynclan, Maanda Manyatshe, former CEO of the Post Office and current CEO of MTN Southern Africa, Geoffry Mabote, former head of retail at the Post Office and Francis Matabane, former head of Transformation at the Post Office.
The allegations set out in the complaint are numerous and lengthy, but boil down to the following:
1 A tender process for the ”New Image” upgrading of Post Office retail outlets was aborted without explanation. Vision Design was not among the 19 bidders. Please explain why this tender was stopped and your role in the process.
Answer 1: The process of initiating the tender process falls outside my immediate area of responsibility and was and I am unaware of any process that was aborted then. The business unit and the tender board would have competency and authority to deal with that, unless it was a specific tender for my office. This was not and there was no instruction from my office for that to happen and I have no comment.
2 Instead Vision Design was approached and appointed, without a tender process, to commence with the refurbishing of certain New Image pilot sites. Mampeule alleges that Manyatshe, Mabote and Matabane drove the appointment.
Please explain how Vision Design came to be approached and appointed and your role in the process.
Answer 2: I never drove the appointment of VDH. A presentation was done to the executive committee (Exco) — I was the chairperson of Exco -‒ and it was recommended to me for approval by the members of the tender board. It was also recommended that it be presented to the board and pursued to implementation. I was then approached by the group executive of the supply chain and motivated a request for a tender deviation process, which I approved according to established procurement policies. My role in their appointment was being member of Exco and member of the board. (See attachment)
3 Vision Design’s BEE credentials were not scrutinised at all, and when later found wanting, the company was granted two opportunities to remedy the situation, notwithstanding a PO policy to blacklist entities that misrepresented their BEE credentials. Please explain how and why this occurred.
Answer 3: VDH BEE credentials, from my three years memory, would not have been recommended by the tender board of their credentials were not up to scratch. This is completely untrue as procurement would have brought that to my attention. I have during the course of this matter, this week, obtained the evaluation score which shows that VDH scored 68% on the BEE scorecard, which is a higher score by any BEE standards of any charter.
4 A series of deviations from normal tender procedures were motivated by Mabote and approved by Manyatshe for the upgrading of a whole series of ”pilot” sites using Vision Design. Please explain how and why this occurred.
Answer 4: The deviation from tender, which is accepted practice in the procurement process, was recommended to me by the procurement department. I was satisfied then and remain satisfied that the process was correctly followed. The procurement division completed the necessary justification process, which included dealing with intellectual property.
The board subsequently ratified the process. If my memory serves me well, the board wanted 280 post offices to be upgraded, I (Maanda Manyatshe) motivated to the board a reduction in the number to some 200 (I think) because of cash-flow and budgetry requirements and a generally business-minded, prudent approach to the matter.
Pilot sites, as part of the roll-out is also part of the Sapo procurement process and only after board approval. The entire process was legitimate.
5 Manyatshe presented the board chair with a draft resolution that attempted to authorise him to proceed to roll out retail upgrade programme using Vision Design as ”project manager” without any tender process. This was rejected.
Please explain how and why this occurred.
Answer 5: Why should I represent the issues already approved at the strategic workshop for another approval? The company secretary must explain what games he is playing here. That is not my paper or presentation. I can only assume that he was concerned that the strategic workshop is not a ”formal board meeting” and a formal ratification was required. The board minutes (Attachment 2) do show that such ratification was obtained.
6 Mampeule alleges that Manyatshe and Mabote were very concerned to have Vision Design execute the ”new image” projects, to the extent that they misrepresented the facts and flouted procedures and engaged in a series of piecemeal approvals to get around tender rules and stay with the limit of Manyatshe’s spending authority. Please comment.
Answer 6: Covered in question 4, I would not like to accuse Mr Mampeule for misrepresentation as he had lost more than 16 senior executives since he came in. I can only assume that his allegations stem from loss of institutional memory and not that he wants to make his name by discrediting me.
7 Mampeule alleges that the PO board was misled in confirming the deviation from tender procedures with regard to appointing Vision Design as project managers for retail upgrading. Please comment.
Answer 7: If the board was misled so was I. But then the board must stand up for being gullible. Exco and the board could not have approved VDH without applying their minds to it. The board members insisted to being invited to the openings of these new look post offices, WHY DID THEY NOT QUERY HOW WERE THIS APPROVED IF THEY WERE UNAWARE OF THEM? THEY ALSO INSTRUCTED SAPO MANAGEMENT TO INVITE THE MINISTER AND THE DEPUTY MINISTER TO THESE EVENTS — WOULD THIS HAPPEN IF THE BOARD WAS IN THE DARK?
I would just like to add that the majority of those in the board claimed ignorance of the contract with New Zealanders (SMP) and wanted me to test the validity of the contract in court, we found this not to be true. (Nkonki Sizwe will attest to this)
I would like to ask Mr Mampeule to do diligent due diligence before assuming fixed position.
8 Mampeule alleges that the board attached two conditions to using Vision Design, namely that each new project needed to be properly motivated in order to assess value for money and each needed to be signed off by the CEO (Manyatshe) and chief financial officer. He alleges that projects proceeded without such signed approval. Please comment.
ANSWER 8: My approval and that of the CFO’s was similarly given to each new project presented to us.
9 Mampeule alleges a contract drawn up by the PO to manage the relationship with Vision Design was comprehensively flouted. Please comment.
ANSWER 9: As CEO, I was not involved in contract management. I was however unaware of any ”flouting” of the contract or any other contract irregularities.
10 In particular, at no time did Vision Design submit proper substantiated proposals in order to enable the PO to assess value for money. On the contrary, Vision Design inflated the costs charged to it by contractors -‒ roughly by 100% — prior to charging its agreed project management commission, which was in any case higher than normal. This amounted to a fraud. Please comment.
ANSWER 10: Proposals were vetted according to procurement processes by the relevant departments. As CEO, I relied on their input in considering and if appropriate, approving projects.
11 Mampeule alleges that during the period June 2004 to May 2005 Mabote, without authority, approved projects at about 50 sites based on quotations that contained ”the scantiest information” with respect to the work to be done. Please comment.
ANSWER 11: I left Sapo in November 2004. At the time I was unaware of any irregular approvals.
12 The post office received complaints about the work produced by Vision Design relating to its high costs and poor quality. Inspections by the PO property division found the work generally substandard and completed at a cost of R10 000 per square metre, 285% more than the cost of early parts of the project handled by the property division. Please comment
ANSWER 12: I am unaware of any such complaints, if they exist or that, in any event, these issues were within my purview of responsibility. There are relevant departments dealing with such issues.
13 By October 2004, when Manyatshe resigned, the Vision Design issue was already under investigation. Was Mr Manyatshe aware of this investigation and did this play any role in his departure?
ANSWER 13: I was the one to institute a query when in October 2004 I requested whether Mr Matabane was a shareholder in VDH as alleged. A Cipro check showed that this allegation was unfounded.
14 Claims have been made that PO head of security, Siviwe Mapisa, initially tried to quash the investigation of the Vision Design contracts, claiming complaints were based on racism. Mapisa also resigned in 2005. Please comment.
ANSWER 14: I was unaware of any other issues at the time that may have warranted investigation. I instructed Mapisa to investigate the allegation regarding Matabane’s alleged involvement in Vision Hire. This was my only issue of concern whilst I was at Sapo. I deny these allegations as far as they may relate to the time I was there.
15 Msimang and Mabote have apparently known each other since 1996, but this was not disclosed at the time Vision Design was appointed. Please comment.
ANSWER 15:I do not know of any prior relationships between Mr Msimang and Mr Mabote nor was it brought to my attention.
16 In general, the Post Office alleges that Mssrs Manyatshe, Mabote, Matabane and Msimang — possibly assisted by Mr Mapisa -‒ acted in concert as part of a deliberate scam to perpetrate a massive fraud.
ANSWER 16: This is a lie and the main allegation that I wanted the court to interdict. There is no evidence that I was involved in any scam or fraud. I did not act in concert with any person for any such purpose. All the processes at Sapo were properly followed as far as I was involved or concerned.
Maanda Manyatshe