Mhlathuze Water has axed its chief executive officer (CEO) Sibusiso Makhanya, whom it has paid about R8 million since he was suspended on full pay for the past three years.
The water company’s board, appointed in December by Water and Sanitation Minister Gugile Nkwinti, axed Makhanya on Thursday, accusing him of “impropriety, maladministration and tender irregularities”.
Internal documents obtained by City Press show that during the same period, the water utility paid more than R8 million to law firm ENSafrica in fees to defend a series of court battles Makhanya launched to try to get his job back.
The documents also indicate that the battle between Makhanya and Mhlathuze cost taxpayers a further R5 million, paid to Mthokozisi Duze, who was appointed as acting CEO following Makhanya’s suspension. Duze has served in an acting capacity since June 2016.
Mhlathuze’s spokesperson, Siyabonga Maphumulo, declined to comment on the exact nature of Makhanya’s alleged impropriety, maladministration and tender irregularities, but said the allegations emanated from the Auditor-General’s reports and were further probed by independent attorneys Mhlanga Inc.
Maphumulo confirmed that the water company paid more than R8 million in legal fees to fend off Makhanya’s litigation. “While Mhlathuze Water confirms only R8.5 million as costs related to investigations and legal fees, Mhlathuze Water as a respondent had to secure a legal team to defend itself against protracted litigation,” he said.
Maphumulo would neither confirm nor deny that Makhanya was paid R8 million over the past three years and that Duze was paid R5 million.
Of Makhanya’s salary, he said: “We can confirm that since his first day of suspension, Makhanya has been drawing a full salary, with benefits, until January 24, when the new board terminated his contract. Mhlathuze Water could not afford a leadership vacuum. While the suspended CEO was challenging his suspension, Duze assumed the dual role of accounting authority and acting CEO. Mhlathuze Water views this appointment as legitimate and financially prudent as [Duze] added value.”
Mhlathuze’s legal woes are not over yet. On Friday, Makhanya, through his lawyer, asked the board to withdraw his axing or face another urgent court challenge on Tuesday, on the grounds that he was not offered an opportunity to respond to the allegations against him, and that the investigators were appointed without a board resolution.
“Our client’s … right to fair labour practice has been violated,” said his lawyers in a letter on Friday.
President Cyril Ramaphosa recently appointed the Special Investigating Unit to probe corruption at Umgeni Water. Makhanya told City Press that Ramaphosa should also have proclaimed a probe into Mhlathuze, claiming his axing was a “desperate effort” to prevent him returning to work “so that their corruption is not exposed”.
In November 2015, the then Mhlathuze board – led by former chair Dudu Myeni – suspended Makhanya, accusing him of corruption. In June 2016, Makhanya approached the Pietermaritzburg High Court, asking it to declare his suspension illegal. He argued that Myeni’s board had no right to suspend him as it had already served its four-year term and former water and sanitation minister Nomvula Mokonyane had illegally extended it. Makhanya also asked the court to declare Mokonyane’s decision to extend the board’s term as illegal and unconstitutional. He also argued that Myeni, appointed in 2002, had already served her maximum three terms.
In November 2016, Judge Yvonne Mbatha ruled in Makhanya’s favour and set aside his suspension. She also ruled that Mokonyane’s board extension was illegal and that Myeni could not continue serving on Mhlathuze’s board, but suspended all rulings for six months and ordered that Makhanya’s disciplinary hearing proceed.
In her judgment, Mbatha also laid into Makhanya, accusing him of having contributed to the destabilisation of the water utility and of initially “vigilantly and vigorously” advocating the extension of Myeni’s board, only to make a U-turn after falling out with her. “As soon as he falls out with the board, which he had so actively tried to entrench, he sees their actions as unlawful and illegal. [Makhanya] had a hand in this unlawful conduct to a certain extent,” Mbatha said in her judgment.
In his application, Makhanya accused Myeni of capturing and corrupting the water board. In January 2017, City Press reported that Myeni took her board to five-star hotels and donated millions meant for charity to other causes, including Zulu King Goodwill Zwelithini’s wedding and that she spent the water board’s money on luxurious overseas trips to international water conferences, some of which she did not attend.