Khumbudzo Ntshavheni, the minister of small business development, has filed a civil suit against her former employer, Ba-Phalaborwa Local Municipality in Limpopo, to clear her name and avoid possible prosecution following a damning high court judgment implicating her in an allegedly inflated tender in 2009 when she was municipal manager.
In papers filed on Thursday, Ntshavheni said Ba-Phalaborwa municipal officials had deliberately misled the court in their submission that she had entered into an oral agreement with Makwande Chartered Accountants and Business Advisors to increase the amount of their professional services contract and their scope of work.
“The court was misled into pronouncing a judgment or order [in respect of the alleged oral agreement] which, but for the fraud or misrepresentation, it would not have done,” she said, adding that the municipal officials were aware that the allegations were “untrue and false”.
Judge Gerrit Muller, sitting in the Polokwane High Court, made a ruling on the tender for chartered accountant services on May 27.
He said: “The contract price of R584 000, exclusive of VAT, which was confirmed by the municipal manager in a letter of 7 July 2009, sky-rocketed to R2 268 681.40 on 8 July 2009 in terms of an oral agreement concluded on the day after the contract was awarded.
“It boggles the mind that such an increase, without council approval, could have been negotiated and agreed upon for the same work tendered for.
“The explanation proffered by the respondent, Makwande, as the reason for the conclusion of the oral agreement is incomprehensible, indigestible and is undeserving of acceptance,” Muller ruled.
The finding was among the two key aspects of the judgment that Ntshavheni applied to court this week to have expunged or rescinded after the Ba-Phalaborwa municipality applied to court to set aside the contract with Makwande, which Muller granted.
Another order the minister wanted rescinded was that she allegedly entered into an oral amendment to the contract with Makwande.
On May 21 the municipality and Makwande appeared before court to argue the validity of the 2009 contract for professional services on Generally Recognised Accounting Practice conversion and the preparation of the 2008/09 annual financial statements, valued at R584 000, excluding VAT.
The municipality wanted the contract to be declared void from the beginning.
Makwande wanted it to be declared “unlawful” — which would have enabled the firm to retain the rights that flow from the contract if it is declared unlawful.
However, the court found that Makwande would not suffer any prejudice.
The judge said: “The public generally, and in particular those members of the community of Phalaborwa, who pay rates, taxes and other levies towards their municipality, have a real and a direct interest in the administration of the public purse which the Ba-Phalaborwa municipality and other municipalities throughout the country are privileged to administer.
“Fruitless and unauthorised expenditure touch their pockets and impact severely on much-needed service delivery to which they are entitled and expect.
“When contracts are entered into by the public functionaries under corrupt or illegal circumstances, the public interest dictates that those responsible should be brought to book swiftly and expertly.”
Muller said: “Little, if nothing, has been done in this province, in particular, to prosecute corrupt officials and others who benefit from corrupt activities [and] it is high time that the malfunctioning state machinery grinds into gear before all faith is lost in the criminal justice system.
“The impact of corrupt activities is so devastating and repugnant that the court should do all in its power to ensure that nobody should benefit from these activities, much less those in powerful positions.”
Ntshavheni, who left the municipality in 2010 and was appointed minister last year in May, said in court papers that she could have been called to defend herself during the application because the municipality was fully aware of her whereabouts and could have easily served its review application to her as it was required by law.
More so, Ntshavheni said, because the application had, by and large, alleged impropriety and corruption on her part.
She said the municipality could have, on different occasions, contacted her to either confirm or deny the allegations relating to the alleged oral contract, but “the municipality again deliberately chose not to do so, despite its full knowledge that it had made very serious and prejudicial allegations against [her]”.
She became aware of the “misrepresentation and fraudulent statement that [she had] entered into an oral agreement with the [Makwande]” only after the judgment was delivered, she said.
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