Axed Shabalala defiant

2010-08-30 00:00

ITHALA boss Sipho Shabalala says he has not been supended, despite an announcement to this effect by by his political boss, Economic Development and Tourism MEC Mike Mabuyakhulu, last Friday.

Shabalala’s denial of the suspension has the potential to create a major stand-off between him on the one side and Mabuyakhulu and the Ithala Bank board on the other.

In a letter sent to Shabalala last Friday about his suspension, the Ithala board requested him to provide reasons by 4 pm tomorrow as to why he should not be suspended.

His spokesperson, Vuyo Mkhize, said yesterday that, simply put, to agree that Shabalala has been asked to give reasons why he should not be suspended, while claiming that he has already been suspended, would not only be a perversion of logic, it would be a contradiction.

Mabuyakhulu’s spokesperson, Bheko Madlala, insisted that Shabalala is suspended, and that the request for him to submit reasons why he should not be suspended “is just a technical legal requirement”.

“As far as we are concerned, Mr Shabalala is suspended. The board [Ithala] met and deliberated on the matter before reaching that decision. He is not compelled to give reasons why he should not be suspended and even if he does give the reasons that does not mean the suspension will be lifted. The board will meet and discuss that,” Madlala said.

Shabalala’s suspension was announced two days after the Assets Forteiture Unit (AFU) confiscated his assets and announced his pending arrest on suspicion of being involved in the R200 million defrauded from the Health Department.

Two former Health officials, Dr Busisiwe Nyembezi (former HOD) and Mdu Ntshangase (former procurement officer), and KZN Legislature caretaker CFO Sipho Buthelezi were arrested last week in connection with the case.

Mkhize insisted that the letter given to Shabalala does not say he was being suspended, but only said he has to make submissions on why he should not be suspended, and that means he is not yet suspended.

“Mr Shabalala is set to challenge the view that there is any basis for the board of Ithala to contemplate suspending him.

“The review of an employee’s employment status by his employer on account of untested allegations carried in the media is simply without precedent in this country, especially where state institutions are concerned,” Mkhize said.

In a press statement announcing the Ithala Board’s decision, Mabuyakhulu stated that, among other things, the board and the provincial government are extremely concerned at the effects the allegations [against Shabalala] might have on the reputation of the Ithala Group and its standing in the public domain.

He said that the rules of fairness would militate against Shababala being subjected to an arbitrary set of rules and standards that are not consistently applied to all citizens.

“The alternative view here is that if, indeed, Mr Shabalala has already been suspended as has been reported in the media, then it would be both unnecessary and pointless for him to make a submission to the board of Ithala arguing why ‘a decision that has already been taken’ should not be taken,” said Mkhize.

Commenting on media reports regarding the estimation of Shabalala’s assets confiscated by AFU at about R35 million, Mkhize said: “The rules of fair and balanced media reporting demand that this be countered with a rider that the balance outstanding on the loans that Shabalala took to purchase these assets, excluding interest and finance costs, is well in excess of R30 million.”

Meanwhile, Premier Dr Zweli Mkhize and his cabinet have welcomed the arrests and suspension.

In a statement yesterday, Mkhize said the provincial government is committed to strengthening all efforts that are aimed at dealing with fraud and corruption effectively. “It is for this reason that we will ensure that all government departments co-operate with law enforcement agencies who are investigating this matter.”

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