Millions in salaries for officials with no contracts at struggling state bus firm

2015-11-12 18:36

North West Transport Investments – a struggling state-owned bus company – has for five months paid six senior managers millions of rands in salaries after their employment contracts lapsed. 

This anomaly was recently picked up by the new board after it examined a number of contracts. It emerged that officials drew salaries from the company in the absence of any contractual obligation. 

The company could not immediately establish whether any of the officials had been reporting for duty as normal employees as most were not based at the head office. 

The failure to detect and stop the salaries of those who were not officially employed by the company came at a time when the North West government was on a mission to sell to Gauteng some of its operations that are mainly based around the Tshwane area. 

The company has a history of not making a profit over the years and had reportedly failed to yield any positive results even after a R30-million government bailout early in 2014. 

The company has recently found itself in the news amid internal strife between its former board members and is North West government – led by Premier Supra Mahumapelo – shareholder. 

A new board was recently appointed to take the company through sale of assets to Gauteng and oversee a forensic investigation into a string of allegations including maladministration and corruption. 

It has now emerged that the same company has been paying six high-earning senior managers with an annual package of more than R1 million each full salaries, even though none of their contracts were renewed. 

It is the subject of an ongoing forensic investigation into the beleaguered company. 

A decision to stop the six salaries was taken by the new board just over a week ago. 

Company spokesperson Dulegang Maboi said the irregularity was picked up after the board requested all contracts be availed to them. 

“They picked up that the six contracts hadn’t been renewed and this led to a resolution to terminate with immediate effect in order not to expose the company to financial ruin. The board has resolved to terminate these contracts with immediate effect as a remedial action in order to address the issue of wasteful and fruitless expenditure” she said. 

Maboi said the terminated contracts were those of the acting general manager: executive business development; depot managers of Babelegi, Mabopane and Pretoria West depot; and the senior manager of audits. 

The continued salary payments were blamed on the previous board led by Themba Gwabeni, who had an unpleasant departure and was currently challenging a decision not to have his term of office renewed. 

Gwabeni was also against the selling of provincial government assets to Gauteng, saying he was on track to turn the company into a profitable entity. This was refuted by the government, which said the company had failed over the years even after a R30-million bailout. The provincial administration had also halted a tender that had been advertised by Gwabeni’s board to acquire 540 new buses. 

City Press understood that Gwabeni was also probed for a number of allegations linked to his term of office. 

Gwabeni had previously denied allegations of soliciting bribed from service providers and that he had visited the Cape Town-based factory of a potential bidder in a R1-billion fleet-purchase tender with intentions of influencing the bidding process and suggestions that he intended to solicit a bribe. 

He had previously told City Press that these allegations were aimed at discrediting him and that they were “politically motivated”. 

Meanwhile, Maboi said the investigation into questionable salary payments was expected to reveal all. 

“The company has been paying the above mentioned contracts which have expired and the previous board was aware of these tendencies and they never did anything in order to fix it hence these issues are subject of a forensic investigation instituted by the North West government. Among other issues the probe will cover allegations of misconduct, maladministration and fraud against certain officials and certain former board members.” Maboi said.

“The forensic report will give the shareholder an idea on what transpired with the issue of the expired contracts and guide on what remedial action to be taken if any officials were involved.” 

The North West administration has confirmed its decision to sell all operations based in Gauteng to that provincial administration saying the company was running at a loss and intentions to expand the business in its own province.

Read more on:    supra mahumapelo  |  north west

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