The chairperson of a major KwaZulu-Natal water utility was reinstated days after being rejected for a third term — and her lightning-fast comeback has been attributed to her close association with President Jacob Zuma and her position as head of the Jacob Zuma Foundation.
A selection panel, including senior water affairs department officials, found that Dudu Myeni, chairperson of the Mhlathuze Water Board since February 2006, should not be reappointed because “she would bring instability back into the board and was at the centre of the current crisis and disharmony” at the utility.
This was an apparent reference to a Special Investigating Unit (SIU) investigation into alleged maladministration, abuse of state resources, unfair dismissal of staff, noncompliance with procurement and tender processes at Mhlathuze between January 2004 and September 2008, and an exodus of senior staff.
Former Mhlathuze chief executive Silas Mbedzi said Myeni had also failed a probity test, which revealed a default judgment against her in respect of an Absa bank loan on a R3.7-million property.
Eleven days after she was not reappointed in January 2010, former water affairs minister Buyelwa Sonjica intervened and reinstated Myeni and other board members, insisting that the appointment of the new board was flawed. She did not elaborate.
Once back in the saddle, Myeni and her fellow board members suspended Mbedzi and subjected him to disciplinary action on several charges, including buying 2010 World Cup hospitality tickets valued at $230 000 without board permission.
Mbedzi said Myeni appeared to have the president’s protection. He told Parliament’s water affairs committee in May last year that she warned him she would not “take [her removal from the board] lying down” and would take the matter “to Mahlamba ndlopfu”, Zuma’s official residence in Pretoria.
But Myeni flatly denied that Zuma had played any role in her reinstatement. She also dismissed Mbedzi’s claim, made to the parliamentary committee, that to head off the SIU investigation she had had face-to-face meetings with Zuma.
Mbedzi alleged that the first encounter was at Luthuli House in November 2008 in the presence of then-president Kgalema Motlanthe, the second at Zuma’s house in Forest Town, Johannesburg, in the same month, and the last at the Jacob Zuma Foundation’s offices in Rosebank, Johannesburg, in April 2009.
Presidency spokesperson Zanele Mngadi would not comment and Motlanthe’s spokesperson, Thabo Masebe, said no written request was made to Motlanthe to quash the SIU probe.
He added: “If the meeting took place, Motlanthe would not have discussed government business or entertained such a request.”
An SIU source said there were difficulties in undertaking the probe, proclaimed by former president Thabo Mbeki in September 2008, because of an “outbreak of shredding paper and deleting computer files” — a claim Mhlathuze has denied.
It is understood that two dockets flowing from the probe are before the KwaZulu-Natal Commercial Crime Court. They relate to alleged contraventions of the Public Finance Management Act by Mhlathuze’s accounting authority and alleged fraud and corruption by a former manager and a service provider. The public protector is also understood to be investigating Mhlathuze.
After reinstating Myeni, Sonjica appointed a task team to probe the alleged flaws in the appointment of the short-lived replacement board. Its report, completed in July 2010, has never been released.
Sonjica, now in business, declined to comment and referred the Mail & Guardian to the department.
In January 2010, a selection panel, including Mbedzi, KwaZulu-Natal water affairs department chief director Vusi Kubheka and Fuad Moerat, deputy director of the department’s water board oversight function, interviewed candidates for a new governance structure after the old Mhlathuze board’s term lapsed.
Mbedzi said candidates were asked to undergo a probity test, which revealed a default judgment against Myeni in February 2009 in respect of R416 460 she owed on a R3.7-million Richards Bay property.
An M&G check also uncovered a R1.7-million judgment, this time in favour of Standard Bank, against her and Nomathemba Memela in June 2008 in respect of a property they co-owned.
‘Centre of disharmony’
In a report to Sonjica, the acting director general of the KwaZulu-Natal water affairs department, Nobubele Ngeleto, explained the decision not to reappoint Myeni. He said the selection panel believed she would “bring instability back to the board” and was the “centre of a current crisis and disharmony”.
In a letter to the minister in December 2009, Mbedzi gave details of the “crisis”, alleging that three members of the internal audit committee had resigned after Myeni “disputed most of the findings that implicated her for having either manipulated the process or benefited irregularly”.
Of 11 board members appointed in 2006, six had quit, citing Myeni’s “poor leadership” and excessive interference, he added.
Mhlathuze had had eight chief executives, including acting chief executives, during the previous four years. “The majority of the infighting had the chairperson as a central figure,” Mbedzi said.
Responding on Myeni’s behalf, current Mhlathuze chief executive Vic Botes said Mbedzi was driven by a personal vendetta against her. He hinted that the former chief executive was unhappy about his suspension and said “any employee, no matter which level, will be disgruntled when he is punished for wrongdoing”.
In fact, Mbedzi had drafted Ngeleto’s report and it was “disingenuous to suggest it is the view of the director general”, Botes said. He added that the “notion that a personal debt judgment invalidates a person for public or corporate office is without foundation. The adverse judgments are a matter of public record and were disclosed by the chairperson.”.
Mbedzi said that, after leaving Mhlathuze, he brought a case in the North Gauteng High Court alleging that he had been wrongly suspended and Myeni’s reinstated board was illegal. The dispute was settled out of court in February this year, with Mbedzi resigning and receiving a R855&nbso;000 payout, equivalent to six months’ salary.
An internal memorandum by former company secretary Keith Harvey in February 2007 sheds additional light on Myeni’s leadership style. In it, Harvey said “it is the perception of many that staff at Mhlathuze water are afraid to speak out” and that the chairperson demanded “unquestioned obedience”.
In mid-2008 an independent business consultant and former Rand Water chief executive, Simo Lushaba, was contracted to Mhlathuze for three months as acting chief executive. In a confidential report, Lushaba cited a “clear lack of separation of duties of oversight by the board and execution by the executive, management and staff”.
Botes said Mhlathuze could not comment on Harvey’s “alleged” remarks and could not find “any such implication alleged to have been made by Dr Lushaba”.
Apart from her role at Mhlathuze, Myeni is a nonexecutive director of South African Airways, chairperson of the South African Association of Water Utilities, vice-chairperson of the African Water Association and chief executive of the KwaZulu-Natal Institute of Local Government.
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