Axed student financial aid chief cries foul

Legal action launched this week against the state’s National Student Financial Aid Scheme (NSFAS) looks set to interrogate an allegedly communist-inspired “political agenda” behind Blade Nzimande’s recent moves to beef up the controversial organisation.

Nzimande, the higher education and training minister, is the second respondent and the NSFAS the first in a R15-million suit brought by Ashley Seymour, dismissed as the scheme’s chief executive in April after little more than a year in office.

Seymour’s application asks the Labour Court in Cape Town to find his dismissal unlawful and claims R10-million in damages for potential income lost when the NSFAS terminated his five-year contract.
It claims a further R5-million in punitive damages because the NSFAS board was “reckless”, “wanton” and “reprehensible” in its moves against Seymour, his founding affidavit claims.

The affidavit identifies NSFAS board chairman Zamayedwa Sogayise and board member Collette Caine—both appointed when Nzimande installed a new board in January—as the prime movers against him, backed in their “orchestrated campaign” by Gwebs Qonde, Nzimande’s acting director general.

It is “common knowledge” that Qonde is a member of the South African Communist Party, Sogayise is understood to be “a prominent member” of the SACP in Cape Town, and Caine is “rumoured” to belong to the party as well, the affidavit says.

The court action comes in a year when the NSFAS faces unprecedented stress on two fronts.

First, President Jacob Zuma ramped up the pressure in January when he announced that two new moves towards free education would be implemented this year. Recipients of the NSFAS loans who completed their university degrees this year would have their loans converted to non-repayable bursaries and students at further education and training colleges who qualified for financial aid would study for free.

Second, the NSFAS—the agency that must handle the funds to enable both Zuma’s initiatives—has been sweating to recover from the blow of a disclaimer from the auditor general for the 2009/2010 financial year. This put into “serious doubt — the state’s ability to manage the multibillion-rand funding assistance to students” that Zuma had announced, the Mail & Guardian reported in January this year.

Seymour, a qualified chartered accountant, was appointed towards the end of the financial year for which the auditor general issued a disclaimer, his affidavit says. Until then, he had “spent most of [his] professional life in the private sector”.

He was an investment banker at Standard Corporate and Investment Bank before joining the NSFAS, served as deputy chairman for the past decade of the South African Institute of Chartered Accountants (Western Cape), as non-executive director on the boards of several private and public-sector companies, and as chairman of the audit committees of a number of organisations, his affidavit notes. “I am thus totally au fait with the regulatory environment that the NSFAS operates in,” he says in his court papers.

The scheme’s audited 2009 financials showed net assets of R6.6-billion, total revenue of R2.5-billion and annual awards of R3.1-billion, Seymour’s affidavit says.

Yet, when he joined the NSFAS in February 2010, “there was not a single chartered accountant in an organisation that has financial management as the key focus area”. Instead, the NSFAS was “characterised by deep structural and systemic deficiencies [and] gross mismanagement, compounded by years of neglect in multiple respects”.

The “internal planning” for the auditor general’s 2009/2010 audit, which led to the disclaimer, was “wholly inadequate”, Seymour says. The planning, already in process for three months when he arrived, displayed “glaringly inadequate technical know-how” concerning “basic, fundamental accounting knowledge” and “technical financial reporting standards”.

With the backing of the then board Seymour started implementing a turnaround plan that included hiring three “experienced chartered accountants”, who joined the NSFAS towards the end of last year. But all three left after less than six months, following Nzimande’s appointment of a new board this year, Seymour says.

Sogayise and Caine became “operationally involved within the organisation” and there was “a dramatic change in the workplace” involving the “creation of a hostile and intolerable work environment”, Seymour says. “It became apparent that [there was] a witch hunt against me.”

Seymour details a sequence of events involving his year-long probation period, the board’s moves to secure his agreement to resign, his suspension in February and his dismissal in April. All these infringed the NSFAS’s human resources policies and were unlawful, he argues.

“The dismissal of employees, especially senior managers in circumstances similar to mine, has become more and more the norm in this country, especially where political agendas are a major factor, as they were in my case,” Seymour says. “I submit that it is in the interest of society that courts begin to award punitive damages to deter such behaviour.”

Attorneys for the dismissed CEO served papers on the NSFAS and Nzimande on Wednesday. The M&G emailed a summary of specific claims in the papers to Sogayise and Caine and the former responded by saying that “the board is unable to comment on any matter before the court”.

David Macfarlane

David Macfarlane

David Macfarlane is currently the Mail & Guardian's education editor. He obtained an honours degree in English literature, a fairly unpopular choice among those who'd advised him to study something that would give him a real career and a pension plan. David joined the M&G in the late 1990s. There, the publication's youth – which was nearly everyone except him – also tried to further his education. Since April 2010, he's participated in the largest expansion of education coverage the M&G Media has ever undertaken. He says he's "soon" going on "real annual leave", which will entail "switching off this smart phone the M&G youth told me I needed".   Read more from David Macfarlane

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