MTN head in hot water

2006-09-22 18:05

Johannesburg - Maanda Manyatshe, the managing director of MTN South Africa, has been accused of pushing through a R2bn deal without a tender process while he was head of the SA Post Office, reported the Mail and Guardian (M&G) on Friday.

Khutso Mampeule, Manyatshe's successor, has laid a criminal complaint against Manyatshe, reported the paper.

Manyatshe was chief executive of the post office at the time.

Mampeule has also laid criminal complaints against two other former post office executives as well as Vision Design House, the company that was awarded the contract.

The contract was reportedly worth R100m, but possibly more than R2bn.

It was to refurbish post office branches throughout the country.

The contract had been initiated in 2003, according to the M&G report, when Manyatshe was still the chief executive of the post office.

The report said Mampeule had cancelled the deal in October last year, amid allegations that post office tender regulations had been flouted, board decisions ignored and costs to the post office massively and fraudulently inflated by Vision Design.

Cost about R1.47m a branch

After Mampeule terminated the contract, Vision Design sued the post office in the Pretoria high court. It claimed about R5m was still owed.

The matter has been referred to private arbitration.

The arbitrator will also weigh a counter claim by the post office for millions in allegedly fraudulent "secret profits" made by Vision Design.

Mampeule's allegations are contained in a 55-page affidavit filed in the high court in response to Vision Design's civil claim, and in a similar affidavit he made to the police commercial branch in Pretoria asking that Vision Design, Manyatshe and the two former executives be investigated.

Vision Design was paid nearly R100m to refurbish the retail space at 68 post office and Post Bank branches between 2003 and the contract's termination last year - about R1.47m a branch.

The M&G said that based on this figure, and had the refurbishment been rolled out to 1 500 branches as planned, the cost to the post office would have been more than R2bn.

- SAPA