Durban - A new forensic report has recommended that Water and Sanitation Minister Senzo Mchunu should consider laying criminal charges against three outgoing board members of the Richards Bay-based Mhlathuze Water which is one of the entities of his department.
The report which is dated 25 April 2023 was compiled after an investigation into the conduct of board members and it was undertaken by Integrity Forensic Solutions (IFS), a Durban-based forensic company.
NEWS: A new damning 136 pages long report about the operations of the Umhlathuze water board and the conduct of some board members have surfaced. The report was compiled in April this year for Minister Senzo Mchunu and it paints a picture of how some officials and board members
— Sihle Mavuso (@ZANewsFlash) June 22, 2023
The investigation was conducted after suspicions that some members of the executive in the water entity were still beholden to former chief executive, Mthokozisi Duze and others who have since been criminally charged are out on bail.
It was suspected that beyond Duze and former chief financial officer, Babongile Mnyandu, the company was at risk.
UPDATE: Here are some of the contents of the 136 pages long report into the conduct of some Mhlathuze water board members. One of the recommendations is that criminal charges be laid against three body members who allegedly engaged in unethical conduct. @IOL pic.twitter.com/jPiiYsFO5J
— Sihle Mavuso (@ZANewsFlash) June 23, 2023
It is worth noting that the term of the current board is coming to an end at the end of the month and Mhlathuze Water will be disbanded, with all its assets and staff being swallowed by a new water entity called Umngeni-Uthukela Water.
Again, only one of the three-fingered board members appears to be serving on another board of a KwaZulu-Natal-based public entity, meaning, only him will be affected by the recommendation that the three board members be removed from all boards where they serve.
However, IOL can reveal without naming anyone that one of the board members allegedly received free legal services from Mhlanga Inc, the Durban law firm whose multi-million tender got Duze and Mnyandu arrested.
The board member had a company that was being sued for a Transnet tender and Mhlanga’s law firm helped him as its attorney of record for nine months.
The report said his conduct “bears the elements of fraud and corruption.”
During the investigation, IFS questioned him about that and his non-disclosure to the board that he was conflicted
According to notes in the final report presented to Mchunu, he conceded that Mhlanga Inc helped him and he never declared any interest when issues involving the law firm came before the board.
When IOL asked the board member about these allegations he said: "I have recently received the unlawful so-called forensic report and I will be dealing with it in due course through my attorneys.
"As for the matter, the court must be allowed space to deal with the matter unhindered by media publications."
It is not clear how the other board members benefitted from Duze or any other part as the report did not state.
What is only stated was that their conduct when the issue of suspending Duze by the board, was found wanting.
One of the board members, according to the report, is alleged to have cornered staff of the AG to change an audit report that implicated Duze and Mnyandu in the wrongdoing regarding the Mhlanga tender.
The board member also allegedly leaked board discussions to Duze “in real time” and prior to that, she was in touch with the latter to discuss strategies regarding the matter when it comes before the board.
In one line of the report, it was noted that the three board members “did not only try to assist Duze and Mhlanga to evade accountability, but they did so in a clandestine and calculated manner.
“They made direct and tacit misrepresentations to the board in attempts to induce the board to act in a manner that would be to the benefit of Duze and Mhlanga evading accountability.”’
It was then recommended that Mchunu prefer criminal charges against them and place them on suspension.
That is on top of declaring them delinquent directors in line with the provisions of the Companies Act.
The spokesperson of Umhlathuze Water, Siyabonga Maphumulo, declined to comment on the matter.
Also not commenting were two of the three implicated board members.
Duze said he has not seen the report and asked for it from IOL.
"Ever since these so-called reports on my investigation and that of board members emerged I have never had sight of them. My lawyers have asked for these countless times.
It’s interesting to note the contents of the report as you outline them, however, they remain issues to be ventilated in a trial," Duze said.
Minister confirmed to IOL that he has implemented the recommendation to open a criminal case as his department has already done so.
"The case was opened," Mchunu said.
Regarding declaring them delinquent directors, he said that was a process that should not be rushed.
"We haven't (acted) on that because you don't do those things rush, rush, you must remember they (the board members) need to be heard as well. You can't just say now that you have a report you just do it that away.
"You need to hear them out, their side so that it is a fair and just process... it must be an outcome of a process," Mchunu said.
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