Communications minister Solly Malatsi’s department is initiating several actions to give full effect to the recommendations of an investigation report on alleged misconduct by the CEO of the .ZA Domain Name Authority (ZADNA).
This, after the entity was again confronted with allegations of misconduct and governance failures by its chief executive.
It’s understood ZADNA’s current CEO Molehe Wesi was placed on precautionary suspension, following allegations of transgressions against him.
ZADNA is an entity of the Department of Communications and Digital Technologies, and manages and regulates the .za namespace, which includes co.za, net.za, org.za and web.za.
Racking up expenses
The report, seen by ITWeb, was commissioned to uncover claims of unethical leadership through the introduction of non-disclosure or confidentiality agreements against staff, contravention of the travel and subsistence policy, as well as credit card expenditures.
As per the investigation report, no formal policy breaches were identified.
However, it identified concerning policy gaps, weak oversight and poor cost discipline within the entity that led to excessive use of company resources.
The report identified significant use of the ZADNA credit card during the 2024/2025 financial year, with comparison of monthly use to the previous 2023/2024 financial year.
Some of the spend is attributed to “expensive” restaurants, entertainment, alcohol, overseas travel and luxury vehicle rentals.
| Category type | Number of transactions | Total transaction value |
|---|---|---|
| Accommodation | 4 | R12 527.75 |
| Advertisement | 72 | R54 148.87 |
| Car rental | 4 | R35 250.60 |
| Entertainment | 115 | R280 677,25 |
| Membership fees | 1 | R34 800.00 |
| Other | 16 | R17 205.75 |
| Software | 3 | R46 688.86 |
| Travel | 36 | R498 730.76 |
| Uber transport | 101 | R26 373.19 |
| Total | 352 | R1 006 403.03 |
The report points out that as the above categories of expenditure are allowed in terms of credit card usage, the extent of expenditure within certain categories was further interrogated.
“While the need for entertainment may have been prevalent, the expensive nature of certain restaurants frequented could have been avoided had the CEO diligently considered the declined cash position of ZADNA. The credit card section of the procurement policy does not specify the nature of entertainment allowed, nor does it specify the type of facilities at which entertainment can be undertaken.
“The support documentation to the expenses submitted is inadequate considering that the credit card requisition forms, indicating the reason and individuals entertained, have not been used during 2024/2025.”
In response to the investigation’s request for the purpose of certain entertainment, the names of those entertained and the benefit to ZADNA, the report notes Wesi was unable to consistently identify who was entertained or quantify the business benefit.
“In terms of the Electronic Communications and Transactions Act, the chief executive officer is the accounting officer of ZADNA and must ensure that proper records of all financial transactions, assets and liabilities for the authority are kept. In this regard, he has been negligent in not ensuring accurate recordkeeping and justification for entertainment.
“Expenditure on the rental of luxury vehicles has been confirmed for the use of the CEO during the 2024/2025 financial year. The total car hire expenditure during the 2024/2025 financial year applicable to the CEO was R195 772.63, which could have been significantly lower had a lower class of vehicle been selected.”
The report notes the CEO advised he had not personally requested the costly class of vehicles but had used what was booked for him.
Minister cracks the whip
As the executive authority, Malatsi earmarked his intention to address allegations of flouting governance principles within his department’s entities soon after he took office.
As a result, the minister says he takes allegations of misuse and abuse of resources and other governance matters “extremely serious” no matter the organisation or entity involved. Malatsi adds that he will act without fear or favour to uphold good governance.
“I am determined to crack the whip on governance failures, imprudent use of resources and lack of consequence management across entities to restore good governance, and will continue to hold all the boards accountable for this.
“The boards carry the primary responsibility to enforce discipline, compliance and ethical leadership within their institutions. This is not limited to ZADNA.
“I am strengthening governance across the entire portfolio of the Department of Communications and Digital Technologies, and all boards are expected to be more robust in oversight and strict enforcement.”
Accordingly, Malatsi says he has underscored the importance of executive spending limits and approval thresholds (including credit cards) for travel, accommodation, catering and hospitality. These controls will avoid abuse and ensure public money is not wasted on extravagant frills, he notes.
“I will not hesitate to act against any entity where the values of good governance are not upheld.”
The report’s recommendations include:
- Stringent cost-cutting measures must be considered in appropriate areas of expenditure, with unnecessary spend being avoided and excessive opulent expenditure being eliminated.
- The travel and subsistence policy must be reviewed and implemented as a priority, detailing the levels of expenditure allowed, together with a stringent justification and approval process for all travel.
- The board of directors should institute a process whereby they monitor and approve the travel requirements well in advance of the travel.
- In terms of the ZADNA Code of Conduct, with specific reference to ethics and abiding to values of transparency, excellence, accountability, inclusivity and affordability in all its business operations, it is recommended that disciplinary action be taken against the CEO.
- With the total entertainment cost for the 2024/2025 financial year being R280 677.25, and the supporting documentation for the period April 2024 to December 2025 not made available, it is recommended that R236 505.84 relating to this period be recovered from the CEO.
- For the remaining R44 171.41 spent between January and March 2025, the R11 252 cost of wine consumed will also be recovered from the CEO.
- A separate credit card policy be introduced, with a limit to the monthly expenditure being determined.
ZADNA had not responded to ITWeb’s queries by the time of publication.
Wesi said he cannot exercise his right of reply, nor comment on a report that has not been made available to him.
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