ICC contracts go to company owned by board member
THE eThekwini Municipality and the International Convention Centre have been slated for awarding lucrative contracts to a communication company owned by a member of the ICC board.
The former chairman of the city’s audit committee, Peter Christianson, cited concerns about the independence of the “conflicted” board of directors. Christianson and the committee’s new chairwoman, Londiwe Mthembu, presented a report to the executive committee this week.
Christianson said: “Although the ICC board has applied its mind to this, the committee is not altogether happy. One understands that those directors are appointed by the city … When you have a current employee of a major group who has major interests in the convention centre being appointed to the ICC board, we believe there is conflict of interest.”
He said the committee was adamant this “was problematic”.
“That (board member) party is going to be party to information to bids being made, costs, prices and all the rest of it.”
The report does not mention the conflicted board member by name, but The Mercury understands it refers to businesswoman Zodwa Msimang, who is also the wife of businessman Don Mkhwanazi, a confidant of President Jacob Zuma.
Mkhwanazi raised funds for the Friends of JZ Trust during Zuma’s corruption trial in 2007.
Documents seen by The Mercury reveal how Msimang continues to rake in millions of rands in municipal contracts. Some of these events are hosted at the ICC.
In 2013, the same year she was appointed to the board, Msimang’s company won a three-year R14 million contract to organise the city’s annual Business Fair Seminar. The same contract was renewed in April this year.
In the report, the committee said it had “noted the responses provided by the current board” on the matter “and resolved that this response does not address the issues initially raised by the committee; hence the relevant member remains conflicted”.
Policy
The committee, in the report, “highlighted the need for the municipality in their capacity as the shareholder, to consider developing a policy on the appointment of board of directors for the municipal entities.
The report says the board “should comply with the requirements of the Companies Act”.
“The directors are required in terms of ‘the code’ as defined by the Companies Act that they disclose their interest and declare their independence.”
Addressing the matter in its annual report, the ICC declared that the entity did not have any declared interest in contracts entered into, “with the exception of (Zodwa) Msimang” and another employee.
“Msimang obtains a varying percentage commission on events she brings to the entity and the entity earns event revenue from her. This is through her company, Ikhono Communications CC, which she owns 100% of. The amount related to Ikhono Communications CC for the current year, since Z Msimang was appointed as director, was R40 028 for commission and R1 178 612 for event revenue,” it states.
DA provincial and eThekwini caucus leader Zwakele Mncwango said his party had raised concern about the matter in 2013 but had been “ignored” by the ANC.
“We take decisions based on politics and now we are sitting with this problem. This could have been avoided,” he said, requesting that the city reverse the appointment.
City manager S’bu Sithole said it was up to the ICC’s board to define conflict of interest.
“If you take Moses Mabhida to the ICC (as proposed), the chairwoman of the ICC is involved in soccer. Do you then say, automatically, that’s conflict of interest?”
Efforts to reach Msimang for comment on the contact details listed on the company’s website yesterday were unsuccessful, but responding to an outcry about her appointment in 2013, she said she did not understand where the conflict of interest came in because she did not sit on any of the municipality’s tender boards.