Accidental recording sinks development corporation exec
● She was supposed to uplift the poor, not her pals.
But Pamela Bosman tried to divert contracts worth millions to her romantic partner and didn’t declare private business dealings with clients of the Eastern Cape Development Corporation, according to evidence submitted to court.
The businesswoman and former chief financial officer of the KwaZulu-Natal education department has now been removed from the development corporation board, a decision upheld this week by the High Court in East London.
Bosman, 44, also sits on boards of the South African Nuclear Energy Corporation and the KwaZulu-Natal Sharks Board. It is unclear how this week’s ruling will affect those positions.
In 2012 she appeared in court in Pietermaritzburg charged with corruption relating to a tender to supply books and stationery to schools in KwaZulu-Natal, but the charges were withdrawn.
Her downfall at the provincial government’s development corporation was largely as a result of an accidental boardroom recording of corrupt dealings, a transcript of which was submitted as evidence to court.
Bosman had challenged her removal last year as chair of the corporation’s audit, risk and compliance committee, a position that gave her substantial power.
However, the transcript and a raft of other submissions brought harsh words from Judge John Smith, who ruled that the development corporation had established “on a balance of probabilities that [Bosman] is guilty of conduct that constitutes flagrant and serious breaches of her fiduciary duties as a director”.
It appears Bosman and a senior staff member were unaware that a recording device was still switched on when they remained behind in a boardroom after a meeting. The transcript reveals they discussed how to deceive the company into awarding construction contracts to Bosman’s partner, who did not have the necessary industry grading to qualify for tenders in excess of R2million.
“The transcript evidences a conspiracy by the applicant [and her partner] to unlawfully and dishonestly seek to disrupt and avoid tender processes with the avowed intention of ensuring that the applicant’s romantic partner [name deleted] was granted a subcontract and therefore benefited materially from both projects,” ECDC CEO Ndzondelelo Dlulane said in his responding affidavit.
“It also amounts to a corrupt relationship and therefore to corruption, and [the development corporation] intends to refer the matter to the applicable authorities for further investigation.”
Bosman, who runs her own chartered accountancy firm in East London and is a director of 10 other companies, also failed to disclose her business relationship with a Port Elizabeth firm, FTC Engineering (trading as Tide Marine), which landed a R19-million development corporation loan to build a plough tug for Transnet.
Bosman’s firm, Lumoka, was listed as a supplier to Tide Marine and she therefore had “a direct and personal interest in the loan granted [to Tide Marine]”, Dlulane said.
Tide Marine MD Fabian Crocker said this week the company had informal discussions with Bosman, but there had been no contracted service. He said the company had not received the full loan and had secured alternative finance.
Bosman did not respond to Sunday Times queries. But in her founding affidavit she claimed Dlulane was guilty of irregular decisions and dereliction of duty. As chairman of the audit committee, she had questioned irregularities related to the development corporation’s audit report, she said.
“The only basis for my removal [as committee chair] was as a result of my unwillingness to accept an audit report prepared by the auditor-general, which report is patently false,” Bosman said.
Commenting on the court ruling, ECDC chairman Nhlanganiso Dladla said: “We are relieved that the dispute was independently and objectively concluded in a court of law, and we are satisfied with the outcome.
“The whole saga was costly, though, to the organisation — financially, in its diverting of the energy of board and executives, and in the risk it posed to important institutional relationships such as with the auditor-general, together with the broader threat it posed to the public image of the organisation.”
Dladla said Bosman had been a voting member of the finance and investment committee, which made recommendations on commercial and investment decisions. The development corporation was “in the process of following up on a number of transactions with the independent assistance of the Eastern Cape provincial treasury forensics unit”.
Paul Hoffman, a former state advocate who heads watchdog group Accountability Now, said public enterprises were still labouring under the yoke of the ANC’s cadre deployment policy. “Until such time as the ANC gets serious about the values and principles that are constitutionally prescribed for the public administration and state-owned corporations, we are going to be in second gear, if not in reverse, in South Africa.”