Peters defends Letsoalo amid Prasa strife

Minister of Transport Dipuo Peters.
Minister of Transport Dipuo Peters.

Cape Town - The Prasa board's bickering with former acting CEO Collins Letsoalo could have been avoided, Minister of Transport Dipuo Peters said following the sudden dissolution of the board.

Peters said in a statement on Wednesday that she has been carefully observing the state of affairs that ultimately resulted in concerning levels of governance in Prasa.

READ: Prasa board dissolved with immediate effect

"The recent public spats between the Board and the former Acting Group CEO, Mr Collins Letsoalo, was also unfortunate and could have been avoided."

Letsoalo, who was appointed in July 2016, was fired by the board following allegations that he hiked his own salary from R1.7m to R5.9m a year.

However, Letsoalo rejected this, saying he would have never accepted his appointment had he been offered the same salary in his former position as Road Traffic Management Corporation CEO.

READ: I am entitled to R5.9m - acting Prasa CEO

The minister subsequently requested formal representations from the parties involved which were received on Friday last week.

"In considering prudently what would be in the best interest of Prasa and the public, and in accordance with Section 24(1) of the Legal Succession to the South African Transport Services Act, Act 9 of 1989, Minister Peters resolved to dissolve the Board of Prasa with immediate effect."

Peters is of the view that disbanding the board would help restore good corporate governance and ensure continued service delivery to the South African public by Prasa.

The term of office of this removed board was supposed to expire in July 2017 and the advertisement calling for nomination for the new board was published and has since closed.

The minister intends to appoint an interim board that will oversee the affairs of the entity until July 2017 when the appointment of the new anticipated board will be finalised.

READ: Prasa board ostracised me, says Letsoalo

The DA’s spokesperson on transport Manny de Freitas said Peters should still be held accountabile for the mess that Prasa is in.
 
Prasa is currently under investigation for over a billion rand in the current financial year in irregular payments.

The announcement of the dissolution of the board came at the same time that the portfolio committee on transport decided to launch an inquiry into the gross mismanagement at the entity.

“Although the DA welcomes the decision by the PC to launch an inquiry into the governance challenges at Prasa, the DA is suspicious of the timing of the dissolution of the board,” De Freitas added.

"This would not be the first time that Minister Peters has asserted her power unilaterally over state-owned enterprises, and we believe that this move is an attempt by the Minister to escape accountability.

"The presentations made to Parliament in the past two days has made it abundantly clear that the Minister is not innocent in the disastrous state of affairs at Prasa. The mess at Prasa needs to be resolved and that the Minister accounts for her role the crisis."

READ: 'I am a fighter', says Molefe

Meanwhile axed Prasa board chairperson Popo Molefe intends on challenging the decision taken by Peters. He also claimed that Peters decision to fire the board is likely an attempt to protect Letsoalo.

"We will challenge it to ensure that we defend our rights as directors, our integrity and reputation," said.

A senior government source told News24 it was "an absolute disaster" to dissolve the Prasa board. "The board, especially Popo Molefe, have been instrumental in exposing the mass corruption there despite all efforts to stop them."

One of Molefe's last acts as Prasa chairperson was to send a scathing letter to Hawks boss Berning Ntlemeza over his unit's alleged failure to probe suspect tenders worth billions of rand, reported News24.

READ THE FULL STORY: Molefe slammed Hawks boss over Prasa probe

Following former Prasa CEO Lucky Montana's axing in July 2015, the Prasa board laid criminal complaints relating to tenders worth more than R7bn awarded during his tenure.

The most significant of these were contracts worth R4bn awarded to local technology firm, Siyangena Technologies, and a R3.5bn tender for the acquisition of locomotives found to be unsuitable for South Africa's rail network.

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