/ 25 January 2019

‘Minister caused HDA board crisis’

Former Housing Development Agency board chairperson Mavuso Msimang says his warnings to Human Settlements Minister Nomaindia Mfeketo were repeatedly ignored.
ANC stalwart Mavuso Msimang. (Delwyn Verasamy/M&G)

Former Housing Development Agency (HDA) board chairperson Mavuso Msimang has broken his silence on the scandal-ridden state entity, saying Human Settlements Minister Nomaindia Mfeketo caused the crisis about the board’s tenure by ignoring their reminders to timeously appoint new members.

Msimang also believes the minister acted unlawfully by replacing the board with an administrator instead of allowing it to follow up on the investigations it had initiated into allegations of sexual harassment and financial irregularities.

In December, Mfeketo placed the HDA under administration after the board had suspended several executives and senior managers, including chief executive officer (CEO) Pascal Moloi, pending an investigation into the allegations of financial irregularities.

Several executives were also suspended over alleged sexual misconduct stemming from allegations that some were having workplace affairs with their junior employees.

External investigators appointed by the board recommended that executives Mandla George, Mncedisi Mnisi and Lungisa Mapuma be charged for sexual harassment. The investigators also recommended that Moloi be charged for failing to act on complaints of sexual harassment from staff members.

The agency was also ordered to return R2.3-billion in funds it had received from provinces to the treasury, but it was only able to hand over R1.5-billion because the balance had been allocated to contracts that, according to the auditor general, had been awarded irregularly.

Msimang, an ANC stalwart and a vocal anti-corruption campaigner, said he was concerned that an impression had been created that the agency’s board had failed to investigate serious allegations of sexual harassment and financial irregularities.

The board, he said, had initiated the investigations once it became aware of the allegations and had suspended Moloi and his colleagues to ensure that the complainants could safely give evidence.

But the board was then replaced with the administrator, Nosipho Damasane, on the grounds that its term had expired.

Msimang said the board’s term had been extended irregularly because Mfeketo had ignored their reminders about the expiry of its term. Mfeketo had agreed to go to court to condone a further extension, but then changed her mind and appointed Damasane instead.

“You have these persons being investigated [for sexual harassment] and then the minister dismisses the board. My perspective is that a person who reads that would get the impression that the board had failed,” said Msimang.

The board had seven members, four of whom had already reached their maximum two-year term, meaning that Mfeketo had to appoint four new board members before November last year, which she did not do.

“We wrote [to Mfeketo] in April [last year] to say the term of this board [four members] comes to an end in November — this is to help you and remind you to hire a new board. We were no longer eligible to continue … We heard nothing,’’ he said. “A month before November, we wrote again saying that we are a little bit worried … as the time was drawing nearer. Then she extended the entire board indefinitely.”

He said it was during that time that information was leaked to the board that there were executives who were allegedly sexually harassing their female colleagues.

“I was given an anonymous letter, which cast some really nasty aspersions on the board as if we knew about it [the allegations of sexual harassment] and did nothing. I called a staff meeting and I told Pascal that these are very serious allegations and that true or not these things require investigation,” he said.

“I am known for raising my voice against corruption and so sexual harassment is equal or worse and I can’t let it go. I saw Pascal wanted to kind of dismiss this because he kind of believed that this was being agitated by someone who wasn’t getting along with the executives [accused of sexual harassment].”

He said the board then recommended that a specialist organisation should be appointed to investigate the allegations because the HDA had no capacity to do this.

Around the same time, Msimang received an email alleging financial irregularities at the agency, which the board then also decided should be investigated.

“The person gave us examples after examples of what he described as corruption. He gave dates, times and [information] that there is a project management office that is being set up and is being run by an individual and payments that are being made is something like R13-million a year,” he said.

“We then decided to suspend four people for sexual harassment and others for financial irregularities so we can investigate. That is when the CEO raised the issue that the board’s extension was irregular.”

Msimang said they had advised Mfeketo to approach the courts to regularise the irregular extension of the board as there were no persons to replace them. Instead, he received a letter thanking him for his service and reminding him that his term was up.

Msimang said, in terms of section 31 of the HDA Act, the minister could only appoint an administrator after its board had attempted to intervene in irregularities and failed. Mfeketo had not followed this procedure.

“The minister was told that the administrator is only appointed if the board has failed. Thozamile Botha [one of the board members who was appointed acting chief executive for a few days] raised the issue that it was a concern that an administrator was being appointed and that there were still some board members left,” said Msimang.

The appointment of the administrator appears to have sparked the resignation from the HDA of company secretary Elizabeth Africa.

She confirmed her resignation this week, but said she was leaving because she had received a more favourable offer elsewhere.

The minister has taken steps in terms of the HDA Act and a process of appointing a new board started in June 2018. The appointment of the administrator complies with the required legislation including Section 31 of the HDA Act.

Minister spokesperson Xolani Xundu said Mfeketo had taken steps in line with the HDA Act and had begun a process of appointing a new board in June last year.

“The minister has to be compliant with the process, and due diligence process has taken longer than anticipated.’’

He said Mfeketo did not want to approach the courts about the irregular extension of the board and chose to appoint an administrator.

“The minister did not want to embark on an expensive process, as she believed that a more prudent and effective way to address the issues facing the HDA was to appoint an administrator. The ministry of human settlements is dedicating its energies and resources to supporting the administrator who is gradually turning the organisation around and will ensure that by the time she exits, she hands over to a properly constituted Board,” said Xundu.