Tender bid scandal at Brand SA

Brand SA CEO Kingsley Makhubela, on special leave, vows to not resign Picture: Leon Sadiki
Brand SA CEO Kingsley Makhubela, on special leave, vows to not resign Picture: Leon Sadiki

Embattled CEO claims he is being targeted with use of fake allegations in a plot to get rid of him after ordering probe of dubious contracts

The organisation tasked with promoting South Africa’s image is now embroiled in scandal involving suspected corruption and trumped-up allegations of sexual harassment.

Brand SA’s chief executive, Kingsley Makhubela, has been on special leave since April, facing one disciplinary hearing after another following his decision to institute a forensic investigation into a multimillion-rand tender for a digital marketing agency.

While Brand SA says it has “followed due process, with all parties being treated fairly and with respect at all times”, Makhubela insists that he is being unfairly targeted in a plot to get rid of him.

Lawyers’ letters City Press obtained indicate he is yet to be formally suspended, and that his attempts to return to work have been stymied.

“I will not resign. The idea is to exhaust me,” he said. “I am speaking out about this because I am probably not the only person this is happening to. I feel aggrieved because the system failed me, and failed to defend me.”

Makhubela – a former ambassador to Portugal and Kenya and a former director-general of the department of tourism – told City Press the trouble started a year ago when bids for a five-year, R45 million digital marketing tender had to be evaluated.

The tender was readvertised after Makhubela identified irregularities in the previous process.

The incumbent company, marketing agency Avatar, was in the running for the new contract and Makhubela claims it was overcharging.

Not up to standard

Documents appear to suggest that in addition to its R689 700 monthly retainer, Avatar charged Brand SA an extra R97 459 in one month for “website hosting” and “excess web traffic” for its three websites, while the web hosting company it used charged significantly less for the service.

Avatar strongly denies this, saying they gave Brand SA value for money across a range of services.

Makhubela appointed an independent company to help guide the bid evaluation committee on the appointment of the new service provider.

A report compiled in February by three representatives of the external firm suggests that Brand SA officials tried to stack the process in Avatar’s favour, even though its bid “was not up to the 70% standard required”.

The report also claims that senior Brand SA managers tried to persuade them to “make changes” to their report about the weakness of the company’s bid, and approached one in the parking lot with a request to include the company on the short list, saying “as black people we need to carry other black people under our wing”.

In addition, concerns of another Brand SA employee who worked with Avatar appeared to have been disregarded.

In a document, the staff member states she did not agree with the bid evaluation committee’s recommendation of Avatar, because of its “inadequate” service and “exorbitant fee structure charged on website hosting”.

The tender process was cancelled, but Makhubela claims when it became known that he wanted to institute a forensic investigation into this and other contracts, he became a target.

He also alleges in another document that Brand SA board chair Khanyisile Kweyama “should be recused from the tender investigation process as she has had a discussion with the company at the heart of this tender manipulation” and had a “conflict of interest”.

Makhubela claims a Brand SA staffer complained that she was called by the company twice for a “tender meeting”, and both times saw Kweyama in the office of the company’s owner, saying “they are trying to intimidate me”.

Kweyama denies any conflict stemming from her acquaintance with Avatar director Zibusiso Mkhwanazi, saying they attend different branches of the same church, and see each other at major church events.

“I have no conflict to declare as I have no relations with Mr Mkhwanazi other than attending the same church at different branches,” she said.

Through his lawyers, Mkhwanazi said “there is no possibility that presents a conflict of interest”.

“The reason why Kweyama was at Avatar’s office was because she and Mkhwanazi are part of the same committee tasked with planning the church’s 50-year jubilee celebrations. She was present in church regalia with other committee members on the occasion, as part of a planning committee, and meetings were held at various locations around Johannesburg, including the Avatar offices which were offered as a venue,” his statement said.

Eating stock

In February, Makhubela claimed Kweyama informed him of rumours she’d heard from an official in the Presidency that he had been “eating stock” – or having sexual relationships with employees.

Shortly thereafter he was told that, based on calls to the whistle-blowers’ hotline, he would be investigated for sexual harassment, having a romantic relationship with another staff member and watching porn on his office computer.

Although an initial forensic investigation cleared him, another was instituted days later, he says.

While the chairperson of his disciplinary hearing in August was deliberating on the outcome, Makhubela received a letter from Brand SA’s lawyers, saying that if he wasn’t found guilty on the sexual harassment charge, he would be disciplined on three further charges.

These included a “grossly inappropriate comment ... of an intimidating and threatening nature” to deputy board chair Babalwa Ngonyama about Kweyama’s recent hijacking in which she was driven around in her car’s boot for three hours.

He is also accused of breaking the conditions of his “special leave” and of conflict of interest for failing to disclose his relationship with his former brother-in-law, who concluded a deal with Brand SA.

Makhubela denies any wrongdoing.

A report on the outcome of his disciplinary hearing found Makhubela not guilty of sexual harassment. It found, among other things, that a phone call he made to the complainant one day at 5.58pm, and a request that she send the diet plan she offered him to his personal email address, did not constitute harassment.

The female staffer also claimed that Makhubela looked at her in an “extremely perverted manner”, which was not upheld by the committee chairperson.

‘No impropriety’

Avatar strongly denies any wrongdoing at Brand SA, saying its contract required them to provide the same services, across six websites, as the company previously enjoyed, and the “scope was not just a basic R2 495 per month hosting”.

“At no point was Avatar ever requested to provide only basic hosting,” the company said.

Avatar’s “hosting service costs are blended together to include the entire scope of services and are calculated based on traffic and usage on a monthly basis” which are sent to Brand SA with traffic usage statistics before invoicing, the amounts of which would vary each month depending on website traffic.

“The principle used in order to determine the amount owing is similar to how mobile networks charge for data usage on their networks,” Avatar said, adding that Brand SA was made aware of the costs.

Avatar said it was also required to perform a range of other tasks including “technical maintenance”, updating Brand SA’s content management system, website security, traffic monitoring, newsletter systems and server management.

The company also insists that it performed well for Brand SA, and sent a letter signed by Makhubela in which he congratulated the agency on winning an industry award, saying “Brand SA is pleased to work with you”.

Avatar’s appointment, it said, was also extended twice, and Brand SA “would not do that if they were not happy with the quality of the service”.

Avatar further denied any impropriety around how it handled the tender process.

In a statement Brand SA’s board said the sexual harassment charges “came about through Brand SA’s whistle-blowing line”.

“We firmly believe in innocence until proven otherwise, but we do, as a responsible board, have the obligation to follow through on any whistle-blowing matters.

“We are not aware of any campaign to ensure that Avatar becomes the preferred bidder for the tender,” it said.

“The procurement staff deny any knowledge of the alleged claims to keep Avatar on and have submitted an affidavit to that effect.”

The board said Makhubela brought the alleged irregularities around the digital marketing tender to the board’s attention and these were investigated by the office of the auditor-general, which produced a report that is now before the board’s audit and risk committee.

“The board would like to reiterate that Makhubela is on suspension while he is undergoing disciplinary action. He has only been cleared of one charge out of four, so he remains suspended until the disciplinary process is completed,” the board said.


Can Brand SA build the country’s image while embroiled in controversy?

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