Municipality defends CFO appointment amid VBS fraud storm

Moses Kotane local municipality has finally explained why they have appointed a chief financial officer (CFO) who is a suspect in fraud allegations pertaining to the VBS Mutual Bank saga.

Municipality denied disregarding allegations

The municipality denied that it had disregarded the allegations levelled against new CFO Mzwandile Mkhize, who was hired last year amid allegations that he was among three senior officials from the Gauteng-based municipality who illegally invested municipality funds into the Venda Building Society Bank.

The trio were charged with fraud for alleged violation of the Municipal Finance Management Act.

Moses Kotane said it was concerned about the news reports concerning Mkhize’s appointment as it gave the impression that he was appointed in disregard of the allegations against him.

“The municipality wishes to dismiss this false impression as it is far from the truth.

“The appointment of the CFO followed a legitimate process.”

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The municipality said Mkhize was first appointed in 2018 on a five-year fixed contract in a process that involved representatives from different political parties.

He was also vetted by the State Security Agency and his qualifications were verified by the national department of cooperative governance and traditional affairs.

In this process he was not found to be on the register of dismissed employees.

The municipality learned of the VBS allegations against Mkhize in 2021 when he was already employed but his case was still going through court and therefore he had not yet been found guilty of any crime.

The municipality said it could not prohibit him from continuing to work in accordance with the Labour Relations Act.

When he was rehired after his contract expired in September last year, it was after he had obtained a clean audit for the municipality.

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“Additionally, the municipality sought an outside legal opinion before reappointing him in November 2023 regarding his employment restrictions while a criminal prosecution was underway.

“According to the legal opinion, no statute forbids councils from employing individuals who have not yet been proven guilty in a court of law.”

The council confirmed Mkhize’s appointment for a second contract on 1 January 2024.

Only one councillor did not approve his reappointment in an earlier meeting in November last year.

But that councillor’s court challenge against the appointment was dismissed with costs, the municipality said.

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