Following a series of articles The Citizen published on allegations of malfeasance and maladministration against the board and executive management of Magalies Water by whistleblowers, yet more claims of fraud and violation of Treasury regulations have been received.
Magalies Water, an entity of the department of water and sanitation, provides bulk water and secondary services directly to municipalities, mines and other industries in North West, Limpopo and Gauteng.
On Tuesday, 27 March, supplementary questions were forwarded to the legal representative hired by the Rustenburg-based state-owned entity, Bertie Grobbelaar of Van Velden Duffy Attorneys. He was requested to provide responses by 29 March.
The questions were based on an allegation that most of the unlawful recruitment and procurement decisions were taken based on a deviation from finance policy. When general managers responsible for corporate services and finance, respectively, declined the decisions, the acting CEO at the time allegedly overruled them.
It was also alleged that Sandile Psychology Mkhize – now a CEO with an inflated salary in alleged contravention of both board resolutions and a ministerial circular on the remuneration of water entities’ chief executives – simply ignored Treasury’s instruction to follow the Public Finance Management Act’s prescripts after initially agreeing with the two senior managers on the need to obtain approval from National Treasury before implementing a deviation.
The questions posed to the entity’s lawyers sought to establish if indeed the company secretary was hired without the requisite experience and qualifications and was then subsequently shifted to another position without following HR policy.
Grobbelaar was also asked to get his client to provide comment on whether the GM of Finance and the GM of Corporate Services had initially declined the request for deviation before being overruled.
The entity was further asked whether the Auditor-General recommended that the high salary paid to the former company secretary in his different capacity should be rescinded, as it was against organisational policy.
Grobbelaar was asked whether the information that the said general managers had subsequently resigned was true and whether this had opened the floodgates for yet more maladministration and unlawful procurement.
Grobbelaar chose not to respond to The Citizen by the given deadline. Instead, on the date The Citizen was awaiting the entity’s response, Mkhize sent an internal staff communique to “ALL THE MAGALIES WATER EMPLOYEES” with the subject “FROM THE CE’S DESK: THE HANDLING OF NEGATIVE PUBLICITY.”
Mkhize told employees that his entity had achieved positive performance as “documented by the Auditor General over the past five years” as well as that “top management” had “adopted a multi-pronged approach to deal with these unfortunate latest developments around our organisation”.