Africa-Press – South-Africa. The Nelson Mandela Bay Municipality has accepted legal recommendations to dissolve the board of the Mandela Bay Development Agency (MBDA) following the contentious appointment of its new CEO.
The MBDA, an entity that receives its mandate from the municipality, has been embroiled in controversy after placing Anele Qaba at its helm.
His appointment came just four months after he received a R3 million settlement following an investigation into alleged financial misconduct when he was the metro’s executive director for Economic Development, Agriculture and Tourism.
The appointment led to National Treasury withholding more than R700 million in equitable share grant funding that was due to the municipality in July, resulting in projects coming to a standstill.
Finance Minister Enoch Godongwana instructed the council to provide him with a resolution of commitment the R3 million settlement would be recovered as it amounted to “fruitless and wasteful expenditure”.
Qaba’s appointment was handled as a green item – meaning it was discussed behind closed doors – on the agenda of a council meeting on Tuesday.
However, on Wednesday, council speaker Eugene Johnson said they had adopted the legal recommendations, which News24 has perused, by advocate Olav Ronaasen SC.
He found Qaba’s appointment was fundamentally flawed, irregular, and unlawful and advised the municipality to review it in terms of legality, alternatively in terms of the Promotion of Administrative Justice Act.
Ronaasen said the correct shortlisting process was not followed, adding Qaba did not make the initial shortlist.
He said there was no consultation with the municipality when Qaba was appointed and although the board had the authority to make the appointment, the remuneration package of the CEO was determined by the municipality.
Ronaasen added the parent municipality of an entity such as the MBDA might recall or remove the directors of the entity if their performance was unsatisfactory.
“Clearly, with regard to the recruitment of the CEO, the performance of the board was wholly unsatisfactory and constitutes sufficient ground for the removal of its members.
“The inescapable conclusion is that the board manipulated the selection process to favour Mr Qaba. It accordingly failed in its fiduciary responsibilities to the entity and to the municipality as its sole shareholder.
“My advice is that the municipality proceed to remove the board and advise the minister of its intention in this regard.”
On Wednesday, the MBDA board had its lawyers draft a letter, seen by News24, to Mayor Gary van Niekerk.
Louis Radley from Peyper Attorneys said the appointment of the MBDA CEO was a power expressly granted to the board.
He added while parent municipalities could determine the salary of a municipal entity’s CEO, it did not give them the power to veto the appointment of a CEO.
“We note that the council of the municipality seems to have adopted some or all of the recommendations contained in the opinion of Ronaasen SC.
“We would strongly suggest that any resolution of council in this regard be reconsidered as a matter of urgency,” the letter read.
MBDA board chairperson Glenda Perumal said she believed the legal opinion provided to the City was flawed and was, in its view, anchored on misinformation, dishonesty or mischievous acts.
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