Ithala boss to fight suspension

2010-09-01 00:00

ALTHOUGH Ithala Bank boss Sipho Shabalala beat the Ithala Board’s request to provide reasons by 4 pm yesterday as to why he should not be suspended, indications are that he did not provide the reasons as requested, since he regarded the board’s request as logically flawed and a contradiction of terms

Yesterday, Shabalala’s spokesperson, Vuyo Mkhize, confirmed that a letter was sent to the board pertaining to its request.

Mkhize however said the content of the letter sent to the board is currently “still privileged between an employer and employee”.

“We cannot reveal the content of our response until it had been read by the employer,” is all Mkhize was prepared to say to The Witness yesterday afternoon.

Bheko Madlala, the spokesperson for Ithala’s political boss, the Economic Development and Tourism MEC Mike Mabuyakhulu, said although Shabalala met yesterday’s deadline, he failed to provide reasons why he should not be suspended.

“We have been advised by the board of Ithala that Mr Shabalala has not made any representations. Therefore the MEC concurs with the decision of the board to suspend him.”

Ithala Board last week announced its recommendation to place Shabalala on precautionary suspension from his position as Ithala Bank Group Chief Executive. On the same day, the board sent Shabalala a letter requesting him to provide reasons — by 4pm yesterday — as to why he should not be suspended.

Shabalala stated that to be asked to provide reasons why he should not be suspended while his suspension had already been publicised “would not only be a perversion of logic, it would be a contradiction”.

In what is expected to create a stand-off between Shabalala, the Ithala Board and Mabuyakhulu, he went on to say he is set to challenge the view that there is any basis for his suspension.

Experts are divided whether Shabalala has a legal leg to stand on.

Some say that before the public announcement the Ithala Board should have written to him giving the reason for his suspension. None believe it was necessary to give Shabalala an opportunity to say why he should not be suspended.

Legal opinion agree that employers may suspend employees without asking the employees to provide reasons why they should not be suspended.

Other legal experts believe that the matter is sufficiently in the public domain for the Minister to make the announcement — especially in the case of Ithala Bank, which could suffer a crisis of confidence.

Depositors may withdraw their money and others may not want to invest in the bank.

Asking Shabalala to cite why he should not be suspended is seen as a cautionary step to follows the rules of natural justice.

Many see the current standoff as grandstanding on the part of Shabalala, who faces severe legal challenges after his assets were seized after an investigation into tender fraud at the KZN Health Department.

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