A corruption-busting chief financial executive who was allegedly victimised, instructed to accept a demotion and then fired has finally scored a two-year legal battle.
Former Mpumalanga Economic Growth Agency (Mega) chief financial officer Velile Mqhum, who was fired on March 26 2015 after a disciplinary hearing conducted in his absence found him guilty on a range of charges relating to contravention of the Public Finance Management Act, will walk away with more than a R2 million payout after an out-of-court settlement was reached.
Mqhum alleged the charges were trumped up by then Mega chief executive Boyce Mkhize following their fallout, which he said was about Mkhize interfering with supply chain management and trying to force him to pay a service provider R500 000 in advance.
Mega fired Mqhum about eight months after Mkhize had been given a R4.4 million golden handshake and left the institution when a new board took over.
Allegedly, the outcome of the disciplinary tribunal was not implemented and Mqhum was reinstated after Mkhize left.
Mega lawyers have opted to settle the matter out of court.
City Press has seen the settlement agreement, which will be made an order of the labour court and will see Mqhum getting about R2.3 million, including interest to cover the income he lost when he was dismissed two years before his five-year contract expired.
Signed on August 27, the settlement specifies that Mega will pay Mqhum R1 931 217.88 and R314 627.58 interest.
Mqhum alleged that after Mkhize’s departure the board of Mega reinstated him, but after working for seven months the charges Mkhize had initiated were revived. He was then fired.
Mqhum’s lawyer, Johan Lombard, said: “Over two years Mega presented nothing to contradict what my client was saying and they capitulated.”
“The career of a human being who gave all his life to public service has been destroyed,” Lombard said.
Mpumalanga Finance and Economic Development MEC Eric Kholwane said he was waiting for a full report on the case and would take a decision afterwards.
“It is then that we will see what we need to do,” Kholwane said.
Mqhum believes that the charges were reinstated eight months later because he asked the internal audit committee to investigate transactions that took place while Mkhize had put him on suspension.
Also, Mqhum alleged some of the board members wanted him to accept demotion as finance manager, but he refused and that triggered victimisation once again. He was dismissed a day before the Commission for Conciliation, Mediation and Arbitration was due to hear his case of unfair demotion.
The audit committee report found that Mega hired service providers not registered on the database and which had not submitted documents such as tax clearance and BEE certificates.
The committee also found that:
. At least 76 of 439 companies on the database had the same directors, 108 companies used the same fax number, 42 companies had the same mobile phone number and 181 used the same landline;
. Mega incurred about R25.8 million of irregular expenditure;
. Three service providers were paid R3.3 million after their contracts expired;
. A number of service providers, including a marketing company, were given advance payments to the value of R900 000 before they did any work;
. Two companies were overpaid by R5.6 million, way above the 10% allowed for variation when a project costs more than initially planned; and
. Irregular expenditure to Treasury was understated by R4.4 million.
Mkhize said he had nothing to do with the matter.
“Please do not drag my name into this … I was not involved in the reinstatement of Mqhum, neither was I involved in his dismissal. The settlement issue in the labour court had nothing to do with me,” he said.
Kholwane said Mkhize’s settlement agreement had a condition that if it was later found he had transgressed, criminal charges would be pursued.
“The settlement was explicit … The fact that he left did nothing to absolve him,” Kholwane said.
Mega chief executive Xola Sithole said the decision to reinstate Mqhum was taken on compassionate grounds.
“The condition for Mr Mqhum’s reinstatement was that he accepts demotion to a lower position, but keeping his salary unchanged. On his return, Mr Mqhum was no longer prepared to sign a new contract with the condition as discussed above. Since his refusal to sign the contract, it meant that those charges that were pressed against him still remained, hence the decision to go ahead with his dismissal,” Sithole said.
He said the board was deliberating the settlement.
“The board will determine whether any further action is necessary at this point,” said Sithole.
Mega board chairperson Davies Mculu said that he would need to review at board minutes before commenting.
Mqhum alleged that Mculu played an active role in trying to demote him and reviving the charges.
“You will understand that this matter happened a while ago. There was no instruction from the board to dismiss Mqhum. That decision was made by a disciplinary tribunal. But, like I said, I would like to have the benefit of the board’s minutes to give a full account of what transpired,” Mculu said.