CCMA head quits following suspect lease agreement

The Commission for Conciliation, Mediation and Arbitration (CCMA) director, Nerine Kahn, has stepped down from her influential position following allegations of maladministration in the agency.

The CCMA announced her resignation on November 27, saying she was leaving the organisation to pursue other opportunities in the labour market. But the Mail & Guardian has established she was forced to resign after a preliminary investigation revealed irregularities regarding a R66-million lease agreement the CCMA entered into with Aquasky, the owners of Aquasky Towers, for its Durban office.

The CCMA chairperson, Daniel Dube, said the board has commissioned SekelaXabiso forensic and auditing to investigate the irregularities pertaining to the Durban lease deal. The lease contract was awarded by the CCMA national office, at which Kahn is the accounting officer.

CCMA sources said this week Kahn tendered her resignation after she was confronted by the CCMA board members during a heated meeting three weeks ago regarding an extra R10-million paid to Aquasky, over and above the R66-million contract signed earlier. It is not clear what the R10-million was for. Kahn successfully negotiated a settlement, which will see her leave the organisation before her contract expires in 2016, according to CCMA sources.

Dube said the CCMA board has asked SekeleXabiso to investigate the Durban lease in its entirety. “We need to understand what processes were followed.” Dube said the board put questions to Kahn after it received a preliminary report on alleged irregularities regarding the Durban lease, but he refused to provide details, saying the matter was confidential.

“What I can confirm to you is that we have asked an external auditing firm to investigate the matter. They [SekelaXabiso] started [with the investigations] three weeks ago. We spoke to her [Kahn] after we received the preliminary report. For now, I can’t say what [it is that] she told us about the matter.”

Dube confirmed that the board had agreed to give Kahn, who has spent more than 10 years at the helm of the CCMA, a financial settlement equivalent to three months’ salary for her to leave the organisation in December, months before her contract would have come to an end.

“We gave her the settlement because she would like to pursue other activities. She will remain in touch [with the CCMA] whenever she is needed for any type of assistance, be it the matter we are currently dealing with [the Durban lease deal]. She remains committed to assisting the organisation in other matters,” said Dube.

The M&G reported early in November that the CCMA had allegedly ignored recommendations contained in a forensic report that found evidence of maladministration at the CCMA. The agency has been sitting on the report, which advised that disciplinary action be taken against its most senior officials, including Kahn.

The report was compiled by Gobodo Forensic & Investigative Accounting, which said disciplinary action should be taken against Kahn for failing to act against employees implicated in irregularities in the procurement of services and the appointment of staff. She was aware of the wrongdoings, according to the report, which was submitted to the CCMA in December last year.

A representative of Aquasky, who identified himself only as Kevin, said the company was not aware of any investigation regarding the lease. He also said he was not aware of any irregularities concerning the lease.

Kahn confirmed she and other CCMA officials responsible for the approval of the lease deal had been interviewed by investigators but refused to provide detailed answers about the allegations – particularly the extra R10 million that was allegedly paid by the CCMA. She said it was not true that she was leaving because of irregularities about the Durban lease.

“My second term ends in March 2016 when I will have been with the CCMA for two five-year terms. I have decided not to make myself available for another term and wish to explore some other opportunities available to me in the labour market. The CCMA’s governing body and myself have made this decision together in close consultation.

“I similarly took three months’ leave when renewing my previous five-year term, so this agreement is not unusual. My decision to leave the CCMA does not hinge around the Durban lease. In fact, the CCMA board is still considering the report and has not discussed it as yet, so there is no correlation to any speculation that I am leaving early.

“Appropriate disciplinary action has been taken across the organisation within those findings that are agreed. The rest of the report continues to be addressed,” said Kahn.

Additional comment by Nerine Kahn, regarding disciplinary action, was added on January 23 2016.

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