End of the line for Prasa’s legal head
● Overpayments and irregular appointments were among the reasons state passenger rail agency Prasa suspended its acting legal head Thato Tsautse — an acting judge who was expected to return to the Pretoria high court this month.
Allegations of a “serious nature” relating to the appointments of law firms and investigators and payments to service providers, all contained in supporting documents submitted to Prasa’s board and auditor-general (AG) Tsakani Maluleke by whistleblowers, were behind this week’s announcement placing Tsautse on precautionary suspension.
Two weeks ago, the Sunday Times reported that the AG’s office was looking into the alleged irregular appointment and overpayment of Sandton law firm Thipa Attorneys, which has to date sent Prasa about R16m in invoices.
The whistleblowers alleged Thipa was irregularly appointed to conduct investigations and review work on the agency’s insurance done by “other Prasa attorneys”.
However, Thipa’s scope was allegedly extended to a forensic investigation of Prasa’s Western Cape property portfolio despite it not having any expertise in forensics or property law.
“Thipa was instructed by Thato [Tsautse] to ‘investigate’ the Western Cape property portfolio. However, their instruction was that they would have [fraud and risk advisory firm] SekelaXabiso as the forensic investigator. The entirety of the investigation was conducted by SekelaXabiso,” reads the whistleblower report.
What raised eyebrows in that investigation were two separate invoices Thipa Attorneys submitted to Prasa.
The first, for R4.03m sent on May 6, was allegedly confirmed and validated by Tsautse’s personal assistant instead of by one of Prasa’s legal advisers as required. Tsautse then approved payment.
This invoice reflected the entire amount as legal fees “as if the investigation was conducted by the firm and not a separate investigator”, the whistleblower report said.
The invoice reflected further discrepancies, including Thipa allocating “seven resources” (personnel) to interview two people, and to attend a meeting with a single property administrator.
A Prasa insider told the Sunday Times: “In the normal course of business due diligence should have been done by the legal manager to validate the claim before the legal head signs and approves payment. It is highly irregular that there is a signature of an executive PA [personal assistant] on that invoice.”
More than a month later, on June 10, Thipa withdrew the invoice after writing to Prasa saying it was submitted without the approval of MD Thabo Thipa.
This caused panic at Prasa because the invoice had already been paid, and Thipa was trying to refund the agency.
Thipa then sent through a second invoice of R3.7m.
“Thipa Attorneys’ portion only amounts to R222,666.67. The rest of the amount is listed as disbursements ... because the work was actually done by SekelaXabiso, although they are never mentioned in the invoices,” the report states, adding that the second invoice could not be paid because Prasa had no money to do so.
The Sunday Times has seen both invoices, which differ on when the work was done. The first says the work was performed between March 14 and April 29, but the second says it took place between March 13 and April 19.
In response to questions, Thipa Attorneys said it was unable to comment.
“The types of information you have requested could materially prejudice this pending and ongoing investigation by Prasa.
“In the interest of the integrity of the Prasa investigation and the privacy of individuals and entities involved, we are unable to comment. Our law firm will co-operate with the investigations of the AG and Prasa whenever required to do so.”
After being sent questions, Tsautse said she would only respond after she was told how the Sunday Times had obtained her contact details. When the newspaper declined to do so, she accused the reporter of violating the Protection of Personal Information Act and promised “a super-exciting legal battle”, but failed to respond to the questions.
Prasa said it would not comment until the investigation is concluded.
Prasa is also investigating allegations of fraud in the appointments of a forensic investigator and another law firm to investigate and verify insurance claims against the agency. The whistleblowers said Tsautse irregularly appointed the investigator and his reports were submitted under the law firm’s name. However, the law firm was allegedly paid for the work and did not pass on the money.
“When a complaint was raised regarding [his] report, being mainly that he was not conducting an investigation but rather reviewing legal documents which the [Prasa] legal advisors were mandated to do ... Thato stepped in and informed [the law firm] that their mandate ... would be terminated,” the report states.
Documents the Sunday Times has seen show that the investigator’s reports were submitted on the law firm’s letterhead, and they submitted invoices on his behalf.
Prasa insiders said Tsautse was brought in as a special legal adviser in the office of then group CEO Zolani Matthews, who Prasa fired last year and who is still fighting for his job after winning his arbitration case.
Tsautse was later asked to act as Prasa’s group legal, compliance and insurance head for a year.
Her term was supposed to end on September 30 and she was supposed to return to the bench, but the whistleblower report states that at a meeting on September 21 she announced she would be staying for another three years.
Judge president Dunstan Mlambo said his office “sought Ms Tsautse’s appointment but we revoked the recommendation ... as she advised my office that she would not take up the acting appointment”.
“She advised that she was not ready to take up the acting stint in term 4. She didn’t inform us of her reasons and we didn’t ask,” he said.
This is not the first time the judiciary has had to deal with a judicial officer who chose to stay at Prasa.
Judge Nana Makhubele is now facing a misconduct investigation by the Judicial Conduct Tribunal on allegations of impropriety while chairing Prasa’s board.
Makhubele refused to start working as a judge in January 2018 in spite of being appointed three months earlier. She has denied any wrongdoing.