Controversy-struck Community Schemes Ombudsman Services (CSOS) has served two of its most senior officials — chief ombud advocate Seeng Letele and chief financial officer Themba Mabuya — with letters of intention to suspend them.
The pair have been given 24 hours to account for a raft of financial irregularities including the unlawful investment of R80-million of the state entity into the beleaguered VBS Mutual Bank.
A statement issued by CSOS on Wednesday said the notice comes amid allegations “they [Letele and Mabuya] were grossly negligent, dishonest and were in dereliction of duty in their investment of surplus funds into VBS Bank and that further, they failed to provide relevant information to the Board relating to other investments.”
“The Board is investigating the allegations with a view to possibly instituting disciplinary proceedings. The Board has given Letele and Mabuya until 23 August 2018 to make representations on the question of their suspension,” the statement continues.
When asked for comment, Letele said the matter was currently still internal and she was discussing it with her attorneys.
CSOS’s board chairperson Reverend Vukile Mehana said: “The Board is interested to receive representations from Letele and Mabuya but should we not receive it in the stipulated time, the Board will proceed to suspend without their submissions.”
The board had been under considerable pressure from its shareholder, the Minister of Human Settlements Nomaindia Mfeketo to suspend the duo for their role in the investments, which were done without necessary permissions from national treasury and the shareholder.
The board only discovered the investment after VBS was placed under curatorship by the South African Reserve Bank soon after the central bank became aware of VBS’s liquidity challenges.
It has now also emerged the two officials were also part of an elaborate ruse to doctor documents filed as part of the board’s explanation to the minister.
Last week, the Mail and Guardian reported how the two executives were asked to explain how CSOS’s R20-million invested in Absa Bank was not invested in the organisation’s name. This was after a CSOS enquiry to the bank regarding the status of the investment — part of R100 million invested irregularly — yielded nothing.
The CSOS board has been divided by Mfeketo’s instruction last month to place the two on suspension.
A legal opinion sought by the board on the matter recommended immediate suspension and the institution of disciplinary action on the grounds the pair invested the monies with the full knowledge that they had no permission to do so.