Public Protector finds that all allegations levelled against the SABC Management and board were substantiated
Public Protector Adv. Thuli Madonsela on Monday released her report titled When Governance and Ethics Fail, during a media briefing in Pretoria. The report followed an investigation into allegations relating to various corporate governance failures on the part of the management and board of the South African Broadcasting Corporation (SABC).
The investigation also dealt with allegations that Mr Hlaudi Motsoeneng appointment to the position of Acting Chief Operations Officer (COO) was irregular in that he did not have a matric certificate and the requisite qualifications and that he fraudulently misrepresented facts by alleging to have a matric certificate obtained from Metsimaholo High School.
Further allegations of the purging of staff by Mr Motsoeneng and the former Acting Group Chief executive Officer (GCEO), Mr. Robin Nicholson, the subsequent unprecedented escalation of the SABC’s salary bill under the watch of both the former Acting GCEO and the outgoing GCEO, Ms. Lulama Mokhobo, and general corporate governance failures at the national broadcaster informed the investigation.
In addition, the Public Protector also looked into a whistle-blower’s allegations that the SABC had irregularly appointed a Chief Financial Officer (CFO) whose recruitment had allegedly been initiated and facilitated by a senior official of the Department of Communications on the then Minister, Dina Pule’s instruction.
The Public Protector made the following findings:
(a) Regarding the alleged irregular appointment and salary progression of Mr. Hlaudi Motsoeneng, I find that:
1) The allegation that the appointment of Mr Motsoeneng as the Acting COO was irregular is substantiated. By doing allowing Mr Motsoeneng to act for a period in excess of three (3) months without the requisite Board resolution and exceeding the capped salary allowance, the SABC Board acted in violation of the SABC’s 19.2 Articles of Association which deals with appointments, SABC Policy No HR002/98/A-Acting in Higher Scale and Chapter 5 of the Broadcasting Act, which regulates acting appointments and this constitute improper conduct and maladministration.
2) The former SABC Board’s Chairperson, Dr Ben Ngubane further acted irregularly when he ordered that the qualification requirements for the appointment to the position of COO be altered to remove academic qualifications as previously advertised, which was clearly aimed at tailor making the advert to suit Mr Motsoeneng’s circumstances and this constitutes improper conduct maladministration and abuse or unjustifiable exercise of power.
3) The allegation that Mr. Motsoeneng’s salary progression was irregular is also substantiated in that Mr Motsoeneng received salary appraisals three times in one year as alleged hiking his salary as Executive Manager Stakeholder Relations from R 1.5 million to R2.4 million. His salary progression as the Acting Chief Operations Officer concomitantly rose irregularly from R122 961 to R211 172 (63% increase) in 12 months and was in violation of Part IV of SABC’s Personnel Regulations and SABC Policy No HR002/98/A-Acting in Higher Scale and this constitute improper conduct and maladministration.
4) While I have accepted the argument presented by Mr Motsoeneng, the current GCEO and the chairperson of the current Board that salary increases at the SABC are negotiated without any performance contracts or notch increase parameters, I am unable to rule out bad faith in Mr Motsoeneng in the circumstances that allowed 3 salary increases in one fiscal year resulting in Mr Motsoeneng’s salary being almost doubled. My discomfort with the whole situation is accentuated by the fact that all were triggered by him presenting his salary increase requests to new incumbents who would have legitimately relied on him for guidance on compliance with corporate prescripts and ethics. It cannot be said that he did not abuse power and/or his position to unduly benefit himself although on paper the decisions were made by other people. The approval of Mr Motsoeneng’s salary increments by the GCEO’s and the Chairperson of the Board at the time, Dr Ben Ngubane was, accordingly, irregular as it was in violation of Part IV of SABC’s Personnel Regulations and SABC Policy No HR002/98/A-Acting in Higher Scale and constitutes improper conduct, abuse of power and maladministration.
5) The SABC Human Resources Department failed to keep proper records regarding Mr Motsoeneng’s documentation and other Human resources matters dealt with in this report and this constitutes improper conduct and maladministration.
6) The SABC Board’s failure to exercise its fiduciary obligations in the appointment and appropriate remuneration for the Acting Chief Operations Officer for the SABC was improper and constitutes maladministration.
(b) Regarding Mr Motsoeneng’s alleged fraudulent misrepresentation of his qualifications to the SABC when applying for employment including stating that he had passed matric, I find that:
1) The allegation that Mr Motsoeneng committed fraud by stating in his application form that he had completed matric from Metsimantsho High School, is substantiated. By his own admission, Mr Motsoeneng provided stated in his application form that he had passed standard 10 (matric), filled in made-up symbols in the same application form and promised to supply a matric certificate to confirm his qualifications when he knew he had not completed matric and did not have the promised certificate, was admitted by him during his interview. His blaming of Mrs Swanepoel and the SABC management that stating that they knew he had not passed matric is disconcerting. If anything, this defence exacerbates his situation as it shows lack of remorse and ethical conduct. The conduct is improper and constitutes a dishonest act as envisaged in 6(4)(a)(ii) and (iii) of the Public Protector Act.
2) The allegation that Mr Motsoeneng was appointed to several posts at the SABC despite having no qualifications as required for such posts, including a matric certificate, is substantiated and this constitutes improper conduct and maladministration.
3) Mr Motsoeneng would have never been appointed in 1995 had he not lied about his qualifications and that he repeated that lie in 2003 when he applied for the post of Executive Producer: Current Affairs to which he accordingly should never have been appointed.
4) The SABC management and Human Resources unit failed to exercise the necessary prudence to avoid the misrepresentation and/or to act decisively when the misrepresentation was discovered. This constitutes improper conduct and maladministration.
5) I am also concerned that Mr Motsoeneng’s file disappeared amid denying ever falsifying his qualifications and that at one point he used the absence of evidence to support his contention that there was no evidence of his alleged fraudulent misrepresentation. The circumstantial evidence points to a motive on his part although incontrovertible evidence to allow a definite conclusion that he did in fact cause the disappearance of his employment records, particularly his application forms and CV, could not be found.
(c) Regarding the alleged irregular appointment(s) and salary progression of Ms Sully Motsweni, I find that:
1) The allegation of irregularities in the appointment of Ms Sully Motweni to the position of General Manager: Compliance and Operation and Stakeholder Relations and Provinces on 30 June 2011 to 31 January 2012; Head: Compliance and Operation on 01 February 2012 to date; Acting Group Executive: Risk and Governance on June 2012 to date and subsequent salary increments taking her from R960 500.00 per annum to R1.5 million per annum are substantiated. The HR records show that Ms Sully Motsweni’s appointments and salary progressions were done without following proper procedures and was in violation of sub-section G3 of DAF and Part IV of the Personnel Regulations was irregular and therefore this constitutes abuse of power and maladministration.
(d) Regarding the alleged irregular appointment of Ms Gugu Duda as the Chief Financial Officer (CFO), I find that:
1) The allegation regarding Ms Gugu being irregularly appointed to the position of CFO, through the interference of the Department of Communications, is substantiated.
2) Ms Duda, who was appointed to the position of CFO during February 2012, was not an applicant for the position, which was advertised. Interviews were conducted and a recommendation was made by the SABC board to the Minister of Communications, Ms Pule as the shareholder, to appoint Mr Msulwa Daca. Mr Phiri, from the Department of Communications, and Mr Motsoeneng, from the SABC orchestrated the appointment of Ms Duda long after the recruitment and selection process had been closed. Ms Duda was interviewed on 07 February 2012, without having applied for said position and was after the submission of the Board’s recommendation, of the appointment of a legitimately selected candidate, Mr Daca, submitted to Ms Pule on 31 January 2012, which, recommendation was rejected by her.
3) The conduct of the SABC management, particularly Mr Motsoeneng and the Board in the appointment of Ms Duda as the CFO of the SABC, was in violation of the provisions of section 19.1.1 of the Articles of Association and Broadcasting Act and accordingly unlawful. The appointment was grossly irregular and actions involved constitute improper conduct, maladministration and abuse of power.
4) Although I could not find conclusive evidence that Ms Pule personally ordered that Ms Duda’s CV be handed over to the SABC and that the Board interview her against the law as alleged, there is sufficient evidence that suggests an invisible hand from her direction and that of Mr Mngqibisa, to which we can legitimately attribute this gross irregularity. In any event, if we accept that Ms Pule was not involved as per her denial, it is unclear why she would have speedily approved the appointment as she did on, when the irregularities were obvious. The conduct of Ms Pule as Minister of communications was accordingly improper and constitutes maladministration.
(e) Regarding Mr Motsoeneng’s alleged purging of senior staff members of the SABC resulting in unnecessary financial losses in CCMA, court and other settlements, which amounts to financial mismanagement, I find that:
1) The allegation that Mr Motsoeneng purged senior staff members leading to the avoidable loss of millions of Rand towards salaries in respect of unnecessary and settlements for irregular terminations of contracts is justified in the circumstances SABC human resources records of the circumstances of termination and Mr Motsoeneng’s own account show that he was involved in most of these terminations of abuse of power and systemic governance failure involving irregular termination of employment of several senior employees of the SABC and that the SABC lost millions of Rand due to procedural and substantive injustices confirmed in findings of the CCMA and the courts. Some of these matters were settled out of court with the SABC still paying enormous amounts in settlements.
2) SABC records show that Mr Motsoeneng played the following role in the dismissals:
Mr Motsoeneng directly initiated the termination of the employment of Messrs Bernard Koma, Hosia Jiyane, Sello Thulo, Montlenyane Diphoko and Mesd Mapule Mbalathi and Ntswoaki Ramaphosa who participated in Mr Motsoeneng’s disciplinary hearing held in Bloemfontein.
Advise to the board
(aa) Mr Motsoeneng advised the Board not to renew the employment contracts of Mesd Ntombela-Nzimande and Mampane.
History of conflict
(aa) Mr Motsoeneng had a dispute with Ms Duda before her suspension as well as an altercation with Ntombela-Nzimande, who later alleged with the corroboration of others that Mr Motsoeneng influenced the premature termination of her employment contract.
(bb) Although one or more witnesses pointed a finger at Mr Motsoeneng regarding the termination of the employment of Dr Saul Pelle, Ms Ntsiepe Mosoetsa, Ms Cecilia Phillips, Ms Sundi Sishuba, Ms Lorraine Francois, Ms Nompilo Dlamini, no credible evidence was found to back the allegation.
(cc) Mr Motsoeneng’s actions in respect of the abovementioned suspensions and terminations, where evidence clearly shows his irregular involvement, constitutes improper conduct, abuse of power and maladministration.
The results of certain individual labour disputes with the SABC are canvased below:
(aa) Mr Bernard Koma – Mr Motsoeneng directly initiated the termination of employment of Mr Koma who was the lead witness in his disciplinary hearing. Mr Koma received 12 months’ settlement award at the CCMA with his attorneys on condition that he withdrew his civil case against the SABC after spurious charges had been levelled against him;
(bb) Mr Montlenyane Diphoko – Mr Motsoeneng directly initiated the termination of the employment of Mr Diphoko who had testified against him in his disciplinary hearing. Mr Diphoko was reinstated after CCMA ruling, almost three years after SABC had terminated his contract;
(cc) Mr Hosia Jiyane – Mr Motsoeneng directly initiated the termination of the employment of Mr Diphoko who had testified against him in his disciplinary hearing. Disciplinary proceedings against him dragged for two years before he won the case against the SABC. However, Mr Motsoeneng opposed the finding of not guilty;
(dd) Dr Saul Pelle won his case at the Labour court for reinstatement but SABC refused to reinstate him and offered him 12 months’ settlement payout;
(ee) Ms Ntsiepe Masoetsa – Reinstated after her labour dispute case against the SABC dragged for three years in the Labour court ;
(ff) Ms Cecilia Phillips – Suspended for four months without charges being brought against her by the SABC;
(gg) Mr Sello Thulo – Mr Motsoeneng directly initiated the termination of the employment of Mr Thulo who had testified against him in his disciplinary hearing. Instructed the disciplinary committee to ‘get that man out of the system’;
(hh) Mr Thabiso Lesala – Substantial settlement award offered to him through his attorney at the CCMA and he was asked to withdraw his case as a condition of the settlement;
(ii) Ms Charlotte Mampane – Employment contract was terminated prematurely in March 2012 instead of October 2013 for being redundant. A settlement award was given to her for the remainder of her contract;
(jj) Ms Phumelele Ntombela-Nzimande – Her employment contract was terminated prematurely, and she was awarded settlement payment for the remainder of 13 months of her contract;
(kk) Ms Gugu Duda – Suspended indefinitely since September 2012 to date without expeditious finalisation of the disciplinary proceedings against her;
(ll) Ms Sundi Sishuba – Suspended for two and half years, so far no charges have been brought against her;
(mm) Ms Loraine Francois - Suspended for months but won her case at the CCMA and was reinstated to her post; and
(nn) Ms Nompilo Dlamini – Won her case in the Labour court, the SABC appealed the ruling to the High court, matter due to be heard in April 2014.
3) The allegations of maladministration, including financial mismanagement, at the level of the SABC management are also substantiated. The records show that the majority of these cases were handled without following proper procedure as all 14 suspensions and terminations were successfully challenged in court. Numerous disputes were settled out of court at enormous unnecessary cost to the Corporation.
4) The substantial amounts of money paid to SABC’s employees as settlements during protracted suspensions, terminations and/or long drawn-out labour dispute proceedings and protracted litigations caused unnecessary and avoidable costs to the National Broadcaster, thus resulting in fruitless and wasteful expenditure. The allegation that the avoidable legal fees, settlement awards and acting allowances for persons in suspension, contributed to the National Broadcaster’s unprecedented salary bill escalation by R29 million.
5) The acts and omissions of the SABC management Board in regard to the unnecessary and/ or procedurally irregular suspensions, dismissals and forced resignations amount to fruitless and wasteful expenditure and the conduct accordingly constitutes improper conduct and maladministration.
(f) Whether Mr Motsoeneng irregularly increased the salaries of various staff members, including a shop steward, resulting in a salary bill increase in excess of R29 million and if this amounted to financial mismanagement and accordingly improper conduct and maladministration.
1) The allegation that Mr Motsoeneng irregularly increased the salaries of various staff members is substantiated.
2) Mr Motsoeneng unilaterally increased salaries of, Ms Sully Motsweni, Ms Thobekile Khumalo, a shop steward and certain freelancers without following Part IV of the SABC Personnel Regulations.
3) These irregular and rapid salary progressions contributed to the National Broadcaster’s unprecedented salary bill escalation by R29 million.
4) Mr Motsoeneng’s conduct in this regard was irregular and amounts to improper conduct and maladministration.
(g) Regarding the alleged systemic corporate governance failures at the SABC and the causes thereof, I find that:
1) All the above findings are symptomatic of pathological corporate governance deficiencies at the SABC, including failure by the SABC Board to provide strategic oversight to the National Broadcaster as provided for in the SABC Board Charter and King III Report.
2) The Executive Directors (principally the GCEO, COO and CFO) failed to provide the necessary support, information and guidance to help the Board discharge its fiduciary responsibilities effectively and that, by his own admission Mr Motsoeneng caused the Board to make irregular and unlawful decisions.
3) The Board was dysfunctional and on its watch, allowed Dr Ngubane to effectively perform the function of an Executive Chairperson by authorizing numerous salary increments for Mr Motsoeneng.
4) Mr Motsoeneng has been allowed by successive Boards to operate above the law, undermining the GCEO among others, and causing the staff, particularly in the human resources and financial departments to engage in unlawful conduct.
(h) Regarding the allegation that the Department and Minister of Communications unduly interfered in the affairs of the SABC, giving unlawful orders to the SABC Board and staff, I find that:
1) Former Minister Pule acted improperly in the manner in which she rejected the recommendation made by the Board for the appointment of the CFO and orchestrated the inclusion of Ms Duda’s CV. Her conduct accordingly constitutes a violation of the Executive Ethics Code and amounts to abuse of power.
2) Mr Phiri the Acting DDG of Department of Communication, acted unlawfully in submitting Ms Duda’s CV to Mr Motsoeneng for her inclusion in the subsequent interview by the Board after the selection process had been concluded and recommendations already submitted to the Minister for approval of the CFO’s appointment and his conduct in this regard was improper and constitutes maladministration.
3) Mr. Motsoeneng acted unlawfully in accepting the CV from Mr Phiri and ordering that Ms Duda’s CV be included and she be interviewed after the selection process had been concluded with recommendations for appointment already submitted to the former Minister and his conduct in this regard was improper and constitutes maladministration.
(x) Appropriate remedial action to be taken on the findings of maladministration as envisaged by section 182(1) (c) of the Constitution and section 6(4)(c)(ii) is the following:
(a) Parliament Joint Committee on Ethics and Members’ interests
1) To take note of the findings against the former Minister of Communications, Ms Pule in respect of her conduct with regard to the irregular appointment of Ms Duda as the SABC’s CFO and her improper conduct relating to the issuing of unlawful orders to the SABC Board and staff.
(b) The current Minister of the Department of Communications: Hon. Yunus Carrim
1) To institute disciplinary proceedings against Mr Themba Phiri in respect of his conduct with regard to his role in the irregular appointment of Ms Duda as the SABC CFO.
2) To take urgent steps to fill the long outstanding vacant position of the Chief Operations Officer with a suitably qualified permanent incumbent within 90 days of this report and to establish why GCEO’s cannot function at the SABC and leave prematurely, causing operational and financial strains.
3) To define the role and authority of the COO in relation to the GCEO and ensure that overlaps in authority are identified and eliminated.
4) To expedite finalization of all pending disciplinary proceedings against the suspended CFO, Ms Duda within 60 days of this report.
(c) The SABC Board to ensure that:
1) All monies are recovered which were irregularly spent through unlawful and improper actions from the appropriate persons.
2) Takes appropriate disciplinary action against the following:
(aa) Mr Motsoeneng for his dishonesty relating to the misrepresentation of his qualifications, abuse of power and improper conduct in the appointments and salary increments of Ms Sully Motsweni, and for his role in the purging of senior staff members resulting in numerous labour disputes and settlement awards against the SABC;
(bb) Ms Lulama Mokhobo, the outgoing GCEO for her improper conduct in the approval of the salary increment of Mr Motsoeneng;
(cc) To ensure that any fruitless and wasteful expenditure that had been incurred as a result of irregular salary increments to Mr Motsoeneng, Ms Motsweni, Ms Khumalo and the freelancers, is recovered from the appropriate persons;
(dd) To ensure that in future there is strict and collective responsibility by the SABC Board members through working as a collective and not against each other, in compliance with the relevant legislation, policies and prescripts that govern the National Broadcaster; and
(ee) To issue a public apology to Ms P Ntombela-Nzimande, Ms C Mampane and all its former employees who had suffered prejudice due to the SABC management and Board’s maladministration involving failure to handle the administration of its affairs in accordance with the laws, corporate policies and principles of corporate governance.
(ff) To review all their HR processes pertaining to creation of new posts, appointments and salary scales and progressions.
(gg) The roles and relationship of the SABC Board and COO are defined, particular in relation to the role of a relationship with the GCEO to avoid the paralysis and premature exist of GCEO’s while adhering to established principles of corporate governance.
Meanwhile, the Public Protector has explained that the mention of the Mr Hannes Du Busson in the unedited executive summary distributed on Monday was in relation to an allegation made by the complainants. However the allegation could not be substantiated and no finding was made. The Public Protector apologises for the error and possible unfounded inferences that may imply that there was any wrongdoing found against Mr Du Busson’s person.