SA Post Office reveals why it charged CEO

Disclosure during failed bid to stop R50m payout

THE South African Post Office, which is fighting tooth and nail to prevent a R50-million payout to Nasasa Cellular, has finally come clean over the reasons for putting its CEO, Chris Hlekane, on ice.

On Friday, the post office lost its bid in the High Court in Pretoria to secure an interim order to freeze the payout pending an application to have the deal with Nasasa reviewed and set aside.

In his affidavit, Simo Lushaba, the post office’s administrator, disclosed the charges on which Hlekane was suspended last year. These have been secret until now.

Hlekane’s lawyer, Graham Moshoana, was surprised by the disclosure. He said Hlekane’s involvement in the settlement brokered with Nasasa was not part of the charges that were presented to him. Hlekane’s disciplinary hearing is scheduled for June.

Lushaba said in September last year, Hlekane approved the settlement with Nasasa without the board’s rubber stamp.

At the time, the board had resolved to suspend him for “unlawful, illegal and unauthorised acts” for which he is facing a disciplinary hearing.

The charges are that he authorised, without board approval, the appointment of more than 600 casual workers, “exposing the board to untold financial exposure”. Also, that he unlawfully exceeded an authorised overdraft by more than R300-million without the concurrence of the minister to which the post office reports.

Lushaba said these acts were “symptomatic of the cavalier manner in which Hlekane operated the business of the applicant towards the end of his tenure”.

The deal with Nasasa Cellular, a business venture between the National Association of Stokvels of South Africa and GloCell, came about in 2004. Nasasa was to sell cellphones and airtime through the post office’s 1 250 branches over five years. The post office would receive a commission and Nasasa guaranteed that it would get an annual collection fee and profit of about R4-million. The agreement was never implemented; instead, the post office concluded agreements with MTN, Vodacom, Cell C and other service providers. In 2007, Nasasa went to court.

Lushaba said the agreement was at no stage referred to the board and there was no transparent bidding process as required by procurement law. Former CEO Maanda Manyatshe, who first signed the deal with Nasasa in 2004, did not have the authority to bind the post office to the deal, he said.

He further said the post office’s former attorneys had suggested a R50-million settle- ment in 2011, and that while the board had authorised the attorneys to begin negotiations, it never ratified the suggestion.

Lushaba, who was appointed to manage the turnaround of the post office, argued that if the Sandton South sheriff paid over the money to Nasasa but the court later overturned the agreement, the post office would have to sue for damages. It might find that Nasasa and other respondents were “nothing more than shell entities”.

The urgent application was to safeguard the interests of the public purse, he said.

Last month, the cashstrapped post office lost another urgent bid to stop the freezing of its bank accounts by Nasasa, funds it needed to pay salaries.

Bernard Hotz, Nasasa’s attorney, said the argument about flouting procurement policy was “an afterthought conjured up by the applicant” and had no merit. “The present application amounts to a flagrant abuse of the processes and procedures of this court by an unscrupulous and dishonourable litigant, which seeks at all costs to avoid the obligations it has taken on.”

This week, Lushaba presented the post office’s corporate plan for the period 2015-16 to 2017-18. The plan includes a R7.4-billion improvement in revenue within three years, growing the portion derived from the government from 33% to 50%-55%, and trimming the corporate structure from 15 to seven executives. The post office would also shed 5 065 jobs.

These acts were symptomatic of Hlekane’s cavalier manner