De Lille said the remaining three members could not form a quorum and that the board was no longer functional. Photo: (David Harrison/M&G)
Tourism minister Patricia de Lille has axed the board of South African Tourism over the R1 billion Tottenham Hotspur sponsorship debacle and allegations of sexual harassment and poor corporate governance at the entity.
The minister had given the board’s members until Tuesday to give reasons she should not dissolve it over “serious allegations” against its members, but they failed to do so.
On Wednesday, De Lille said that not only had board members failed to respond to her letter placing them on terms, but eight of the 11, including chairperson Thozamile Botha, had resigned since 7 April.
De Lille said her letter “outlined a number of serious concerns”, including the Tottenham deal; the composition of the board and the skills, competence and qualifications of its members and “certain serious allegations” raised by acting chairperson, Themba Khumalo.
De Lille said the remaining three members could not form a quorum and that the board was no longer functional.
“In all the circumstances, I believe that good cause exists to dissolve the board and I shall do so officially through the government gazette on Friday 21 April 2023,” De Lille said.
De Lille said that she would also gazette a three person team to act while a new board was appointed.
The Mail & Guardian can reveal that De Lille decided to move on the board, which falls under her ministry and is responsible for marketing the country abroad, after Khumalo submitted a memorandum asking her to “terminate” it to avoid further damage to its image over a sexual harassment scandal.
The contents of the memorandum — which was also sent to De Lille’s predecessor, Lindiwe Sisulu, on her last day in office — and the furore over the Tottenham deal are understood to have convinced De Lille to dissolve the board and appoint a new one.
The sleeve sponsorship deal with Tottenham came to light in February and sparked the resignation of three board members, Enver Duminy, Ravi Nadasen and Rosemary Anderson, in opposition to attempts to force it through.
Despite statements by Khumalo that no agencies were involved in the deal, it was later revealed that an agency linked to acting chief financial officer Johan van der Walt stood to profit from the Tottenham sponsorship.
Van der Walt subsequently resigned and the deal was shelved after opposition in parliament and from the presidency. Khumalo remains the acting chief executive and is among those who applied for the full-time post last month.
After Sisulu was axed from the cabinet last month, De Lille took over the tourism portfolio.
On 16 March, Khumalo sent the new minister a memorandum outlining allegations of sexual harassment and board dysfunction and asked her to dissolve the board immediately to avoid further scandal.
On 6 April, De Lille wrote to the board and asked them to provide her with reasons she should not dissolve the board on 18 April.
Several sources at SA Tourism said on Tuesday that they were expecting the minister to act in the course of the next day or so.
Last week, Botha, board member Mduduzi Zakhe and two other members resigned.
In the memorandum to De Lille, which the M&G has seen, Khumalo said a “deeply disturbing” pattern of sexual harassment by two board members — who he did not name — had developed at SA Tourism and needed to be brought to De Lille’s concern.
Khumalo said he had sent the same memorandum to Sisulu and was duty bound to do the same with De Lille.
“As a country, as an entity within the public sector representing the nation’s endeavours and goals, as an individual charged with leading this organisation in my professional and personal capacity, with exceptionally clear organisational, professional, and personal values, we cannot ever accept a situation where sexual harassment is the norm,” Khumalo said.
Two male board members had been accused of sexual harassment — one of them mulitiple times — by staff members at SA Tourism, he said.
“These allegations have been brought to my attention and I must report this to the minister of tourism as our shareholder,” Khumalo said. “I can no longer allow any female employee of the organisation to be alone with any of the male board members both at our offices, nor during periods of travel involving these board members.”
He said SA Tourism had a duty to protect its female employees now and in the future. Two of the employees who had made allegations against them were young women who had “direct and frequent interaction with the board given that it forms part of their core daily responsibilities”.
“The trauma of these experiences are therefore constant and repeated lived experiences as they need to engage with these board members continuously. Yet, they are expected to behave as normal during these interactions and remain professional,” Khumalo said.
He warned that interventions needed to be made urgently to protect the tourism body from further damage.
“If ever these sexual harassment allegations were to be made public, before the appropriate interventions are made, there would be no recovering from it for the organisation,” he said. “We would face total collapse and our corporate reputation would be irrefutably and irreparably damaged.”
Khumalo said he would “humbly recommend” that the entire board be terminated to allow the minister to reconfigure it, rather than just the two members accused of sexual harassment, because this “could result in exposure due to the reasons for their termination”.
He also expressed “grave concern” about the high number of board meetings and the associated cost.
The board, which was legally compelled to hold four meetings a year, had met 37 times from 1 April 2022 to 2 March 2023 at a cost of R2.7 million, Khumalo said. A total of 11 board meetings were held from 1 September 2022 to 27 October 2022, while another 10 were held during January and February this year.
“In the current fiscal, the number of board meetings exceeds the annual requirement by more than 500%. In the current fiscal, the allocated budget for board costs is R2 850 000, which has been depleted as at 2 March 2023,” Khumalo said.
A lack of continuity in the board, which has had four chairpersons since last September, had worsened the situation, as had the failure of the board to “assume accountability for and take full ownership of prior board decisions”.
Khumalo told De Lille that in the Tottenham deal the board had left management to take the rap when it had backed the deal, albeit on the recommendation of management.
“There is no accountability assumed by the board as the entity’s oversight body for any of the decisions it takes. This has been evident in a number of public platforms. The management of SA Tourism is therefore left to defend board decisions entirely on its own, without the support of the board on matters it has taken decisions on,” he said in the memorandum
“Overall, the relationship between the board and management is exceptionally strained. There is undue pressure on the organisation to meet the relentless demands of the board on short notice.”
Several sources at SA Tourism, who asked not to be named for fear of retaliation, said Khumalo’s attack on the board came as a result of members raising questions about his qualifications as acting chief executive and his consolidation of power in the CEO’s office.
“Khumalo has used the chaos in the board to consolidate budgets under his office. Marketing is under Khumalo as he is still chief marketing officer at SAT, all of the overseas hub heads [who market South Africa from embassies abroad] now report to him and he now controls the budget for the hubs, and the tourism discretionary fund,” one source said.
“He is knifing them [the board] in the back and trying to get close to De Lille and survive but Khumalo was the architect of the entire Tottenham deal.”
A second source said they were concerned about the lack of screening in the appointment of executive staff and board members and that current leaders of SA Tourism had not undergone the requisite vetting procedures.
“There is a lot that has gone wrong here in terms of appointments, with the board and with the executive,” the source said.”This institution has a very important role in marketing the country, but there is chaos here.”
De Lille’s spokesperson, Zara Nicholson, said that concerns around Khumalo “were under the ambit of the board to deal with.”