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Fate of Mega CEO in doubt as board quits

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The future of the Mpumalanga Economic Growth Agency (Mega) CEO, Xola Sithole, is uncertain despite an en masse resignation of board members who were trying to push him out of the job illegally.

The board of directors unlawfully suspended Sithole on February 4 on unspecified charges and persuaded him to take a golden handshake to cover the 10 months remaining on his employment contract.

When Mpumalanga finance and economic development MEC, Eric Kholwane, questioned the board about suspending Sithole, without obtaining his approval two weeks ago, board chairperson Davis Mculu resigned.

Kholwane said the board’s action constituted improper conduct.

Six board members had since resigned, forcing Kholwane to begin processes of appointing interim directors to serve until the end of May when the term of this board would have expired.

Kholwane said that Sithole’s future would be decided once Premier Refilwe Mtshweni returned from her official visit in Russia.

“Seven of the nine members of the board resigned. I went to cabinet to relieve the two remaining board members because they could not perform their duties,” Kholwane said.

“A perception has been created that we’re removing the board to protect the CEO … we don’t want to be seen to be protecting people. When the premier returns we will discuss whether the probe against the CEO [Sithole] continues,” he said.

Mculu had alleged in his resignation letter to Kholwane that the board had detected massive corruption against Sithole and had suspended him to conduct a forensic investigation.

Mculu said Sithole was suspected of having looted the Government Nutrition Programme that was meant to feed poor schoolchildren and patients in hospitals.

The Mpumalanga government decided to take away the programme from the departments of education and health to benefit small businesses and cooperatives, which is Mega’s responsibility.

The school feeding scheme benefits 577 000 pupils from 189 villages and is worth about R1.2 billion a year.

The Mpumalanga cabinet moved the nutrition programme to Mega following massive tender corruption and court challenges by disgruntled companies over unfair bidding processes in the education department.

Mculu said emerging farmers and suppliers of the Government Nutrition Programme could not be paid as a result and some farms had collapsed because about R3 million was being siphoned every month.

Sithole said it was unfortunate Mculu had chosen his exit time to make “untested” allegations against him.

“I have always been a supporter of adherence to the highest standards of good corporate governance. Under my leadership, Mega has cooperated with the Auditor-General’s office in a transparent manner aimed at resolving long-standing legacy issues,” said Sithole.

“I would happily make myself available to answer any questions in a lawful forum. Innuendo is not helpful for anyone, least of all at such a critical stage in the life of this important institution,” he said.

On the flip side, sources within Mega told City Press that Sithole was targeted because he did not approve of irregular transactions.

The sources said Sithole lost favour and was being victimised for:

. Refusing to give a R5 million loan to SA Go Fibre – a company owned by Mega secretary Petunia Morgan’s son. The company did not meet lending criteria and Morgan allegedly worked with her son to pursue litigation against Mega for declining SA Go Fibre’s Promotion of Access to Information Act application to find out how its loan application was declined;

. Questioning the allocation of R3 million and R8 million to Raizcorp and Dalamba Victorious Trading Enterprise, respectively, without procurement processes being followed; and

. Questioning the allocation of R10 million for Township Economy Revitalisation to an entity called Spazamart – also without adherence to procurement procedures.

Kholwane had, however, said these transactions were above board.

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