Maanda Manyatshe, chief executive officer of cellphone company MTN, resigned on Monday to clear his name after being accused of pushing through a deal worth R100-million without a tender process while he was CEO of the South African Post Office.
MTN CEO Phuthuma Nhleko said he supported and respected Manyatshe’s decision to resign and that “his management of the operation has been exemplary”.
However, Business Report said Manyatshe did not resign voluntary, but was pushed out of the top job.
The paper quoted a source as saying that Manyatshe felt he had been let down when asked by the board to tender his resignation.
Manyatshe said he had taken the decision in order to “protect and uphold MTN’s reputation and image, as well as afford myself the opportunity to focus on and consider the legal matter in my private capacity”.
The cellphone company’s shares climbed 3,1% on the JSE on Monday.
Manyatshe’s successor at the parastatal, Khutso Mampeule, has laid a criminal complaint against Manyatshe and two other former Post Office executives and the company that got the deal, Vision Design House.
Business Day said Manyatshe’s lawyers were drawing up papers to sue the Post Office and Mampeule for R100-million, which would include his losses for his work at MTN.
The contract — to refurbish Post Office branches countrywide — was initiated in 2003 under Manyatshe’s leadership. It was finally cancelled by Mampeule in October last year, amid allegations that Post Office tender regulations had been flouted, board decisions ignored and costs to the Post Office massively and fraudulently inflated by Vision Design.
After Mampeule terminated the contract, Vision Design sued the Post Office in the Pretoria High Court for about R5-million it claimed was still owed. The matter has since been referred to private arbitration. The arbitrator will also weigh a counter claim by the Post Office for millions in allegedly fraudulent “secret profits” made by Vision Design.
The CEO of Vision Design is Mandla Msimang. A former consultant to Vision Design claims that Msimang tried to mobilise political pressure to have the matter resolved in Vision Design’s favour.
Mampeule’s allegations are contained in a 55-page affidavit filed in the high court in response to Vision Design’s civil claim, and in a similar affidavit he made to the police commercial branch in Pretoria asking that Vision Design, Manyatshe and the two former executives be investigated.
Mampeule, who took over at the Post Office in June last year, said in the affidavit to the police that his board had “instructed” him to lay the criminal complaint. In neither affidavit does he accuse Manyatshe of personally benefiting from Vision Design’s alleged fraud.
Vision Design was paid nearly R100-million to refurbish the retail space at 68 Post Office and Post Bank branches around the country between 2003 and the contract termination last year — about R1,47-million a branch.
Based on this figure, and had the refurbishment been rolled out to 1Â 500 branches as planned, the cost to the Post Office would have been more than R2-billion.
Mampeule’s affidavits allege that the appointment and payment of Vision Design were irregular and that the company had fraudulently inflated its bills to the Post Office.
He puts the “secret profits” as “at least” R8-million, but said the figure may be much higher as Post Office investigators have been able to obtain supporting documentation relating to the refurbishment of a limited number of branches only.
The allegedly undue profits were in addition to a 12,5% commission that Vision Design charged as project manager.