Former NHLS CEO ordered to pay R22 million for loss incurred

17 September 2024 by Guest

The National Health Laboratory Service (NHLS) says it welcomes the judgment against its former CEO, Joyce Mogale, and her co-applicant, the estate of the late former Chief Financial Officer, Sikhumbuzo Zulu, who died before the court proceedings started.

This is after the Labour Court dismissed an unfair dismissal claim against the former officials and ordered Mogale to pay R22 million to the NHLS for losses it incurred because of her conduct.

“The judgment is a victory for governance and recoups losses which the NHLS has suffered as a result of the conduct of its most senior employees,” the NHLS said in a statement.

According to the entity, Judge Connie Prinsloo of the Labour Court found the pair’s dismissal to be fair.

“She used these words to describe their conduct, ‘displayed severe negligence and incompetence … dismally failed to carry out explicit Board resolutions and … blatantly disregarded the limitations contained in the delegation of authority’.”

In her ruling delivered on Friday, 13 September 2024, the Judge stated that the pair had breached the lawful, reasonable, and fair instructions of their employer.

She also mentioned that they failed to exercise due diligence and care, and referred to Mogale’s conduct as “astonishing”.

“Judge Prinsloo further stated that Mogale was unable to acknowledge her role in creating her misery – she was constantly shifting the blame, even onto the media.”

According to the NHLS, the Board became aware of irregularities in 2017, and Mogale and Zulu were subsequently suspended and dismissed in 2019 after a disciplinary hearing.

The dismissal of Mogale and Zulu, affirmed by Judge Prinsloo, were based on three separate irregular commercial contracts at the NHLS.

These include the Afrirent vehicle leasing irregularity, in which the former CEO approved a contract for R72 million without a Board and way above the limit of her authority.

She increased the contract even further to R79 million without any due process.

“She signed a Service Level Agreement with an unwarranted penalty clause which ballooned the cost even further. The Afrirent irregularities led to a judgement that Mogale must pay back R22 million to the NHLS,” the entity explained.

In the Blue Future contract information technology (IT) equipment irregularity, the NHLS Board authorised a procurement of R25 million.

However, Mogale, without a competitive tender, summarily procured R83 million and mostly for goods that had nothing to do with the tender.

In the DV8 wide area network irregularity, the NHLS stated that a R63.5 million addendum was signed to the contract without going through the tendering process and without specifying the goods to be purchased, leaving room for potential malfeasance.

“In sum, Judge Prinsloo found that Mogale’s conduct violated the Public Finance Management Act, the NHLS Supply Chain Management Policy and her contract of employment,” the entity explained.

The Chairperson of the Board, Prof Eric Buch, said that at the time of their suspension, the NHLS debt to its suppliers exceeded R800 million, which surpassed its cash balance.

Since then, Buch said, a diligent effort has steadily turned the NHLS around.

The organisation stated that it now has significant reserves, and its staff have received reasonable annual increases, while annual tariff increases have remained below 5%.

“This judgement is salient as it provides further evidence of the probity and diligence of the Board and its efforts to hold those responsible to account, however long it takes,” Buch added.

Meanwhile, Mogale, former Head of Supply Chain Management Graham Motsepe, Manager of Contracts and Tender Compliance Mthunzi Mthimkulu, Legal Manager Sibusiso Mthenjane and the owner of Blue Future Kapai Pierre Petersen are all on trial in the specialised commercial crimes court in Palm Ridge.

Petersen has already been found guilty of fraud in his tender submission to the NHLS and is awaiting sentencing.

Buch said he was still optimistic that those responsible will also be charged on the Afrirent and DV8 matters. – SAnews.gov.za

Gabisile
Tue, 09/17/2024 – 12:27

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