EXCLUSIVE: Minister fires SITA directors over CEO salary hostilities
In a major shake-up prompted by salary disagreements, communications minister Mondli Gungubele last week removed State Information Technology Agency (SITA) board chairperson Makano Mosidi and several other directors.
Gungubele also terminated the mandate of some board members, including deputy chairperson Dr Stella Bvuma, Zimbini Hill, Matodzi Ratshimbilani, Rendani Ramabulana, Olwethu Zoliswa Ketsekile, and Dr Tshilidzi Ratshitanga.
The friction between the minister and the SITA board, which culminated in last week's shake-up, was triggered by salary hostilities centring on new MD Dr Bongani Andy Mabaso, who was appointed in December.
The dispute was prompted by an adjustment to the MD’s remuneration, which requires the minister's approval.
Documents seen by ITWeb show Mabaso’s remuneration package was bumped up to R4.5 million per year from the previous R3.5 million earned by his predecessor.
Mabaso replaced Luvuyo Keyise, the former SITA executive caretaker.
Disagreements at SITA over Mabaso’s salary package have been ongoing for several months. ITWeb has seen letters between squabbling parties going back at least two months.
The bickering heightened at the end of June, when Gungubele informed board chairperson Mosidi of his intention to remove SITA directors.
Back-and-forth letters indicate that in recent weeks, Gungubele had stepped up efforts to remove the board, which he accuses of "dereliction of duty" and failing in its "fiduciary duty".
Gungubele insists the board’s conduct exposed SITA to financial loss, which it could have avoided.
In a letter to Mosidi, dated 30 June 2023, Gungubele wrote: “I remind you that on the 25th May 2022, the former minister formally acknowledged and granted approval for the MD recruitment process to commence.
“In the same correspondence, you were reminded to comply with the provisions of clause 220.127.116.11 of the SITA memorandum of incorporation (MOI), which states that ‘the board shall present the terms and conditions of appointment to the minister for approval before embarking on the process of recruiting suitable candidates’.”
The minister referred to clause 18.104.22.168 of SITA MOI, which stipulates “the board shall provide the minister with final terms and conditions on which the candidate may be appointed should there be any amendments to the proposed terms and conditions initially provided by paragraph 22.214.171.124”.
He added: “The above clauses emphasise the board’s obligation to report and obtain approval from the minister before appointing a candidate. However, the board failed, refused or neglected to do so.”
Consequently, Gungubele wrote: “You must follow legal prescripts in the decisions you make. In this instance, I believe that you failed to do so.”
The letter continues: “You are therefore requested to furnish me with reasons why I should not take the final decision to remove the board with immediate effect.
"I am mindful of the fiduciary duty that each director holds, and the possibility that some may not have been party to this decision.
"I, therefore, request that the reasons be submitted collectively or individually on or before 7 July 2023.”
New board directors
ITWeb approached the department and SITA on Friday morning for comment on the matter.
Tlali Tlali, SITA head of corporate affairs, told ITWeb the matters that relate, inter alia, to the appointment, performance or reconstitution of the board of directors, fall within the purview of the shareholder department.
Despite acknowledging receipt of ITWeb’s written questions and promising to respond, the department failed to do so and instead announced new directors, including former executive administrator Keyise.
Other new board members are Khathu Sibanda, Dr Lucienne Abraham, Sherylee Moonsamy, Nolitha Pietersen, Kiruben Pillay, Lerato Petlele, Mandla Martin Mnisi, Laura Seme and Renisha Naidoo.
The announcement said the moves follow the “departure and resignation” of some directors.
However, in the correspondence, Mosidi rejected, as false, allegations of "dereliction of duty" and "fiduciary duty" failures levelled against her and the directors.
In a letter seen by ITWeb, Mosidi threatened to interdict the minister.
“At the outset, I must categorically, in my personal, as well as representative capacity as chairperson of the board, reject the conclusion that you have reached, namely that I and the board have breached our fiduciary duties and that we are failing to take any form of accountability,” wrote Mosidi on 20 July.
"The extensive submission made to you in our letter of 7 July 2023, bears testimony that not only did we comply with the MOI in appointing the MD, but that your predecessor in title, the honourable minister Khumbudzo Ntshavheni was duly informed of the adjusted offer that was due to be made to the MD and gave her concurrence.
“In the honourable minister Khumbudzo Ntshavheni’s letter to you dated 10 July 2023, in which I was copied, not only does the minister confirm the concurrence, but she also confirms that to the extent that Cabinet concurrence was required, as opposed to MOI concurrence by her as the responsible minister, she takes responsibility for the absence of such concurrence.”
“I must point out that dismissal as a board member, on the unfounded grounds set out in your letter of 18 July 2023, for incorrect factual and legal considerations impugns my integrity.”
“Unless your letter is withdrawn with immediate effect, I will have no option but to take legal action to clear my name, including but not limited to, obtaining an interim interdict staying the dismissal, pending a review of your decision by a court.”
Former SITA director Ramabulana also wrote to Gugubele, saying: “I would like to categorically disagree with the minister that I (and in the belief we as the board) have breached our fiduciary duties.
“The removal of myself as director of SITA and its reasons which I believe are incorrect have a direct impact on my integrity as a person.
"Therefore, I will be left with no option but that to take legal action to clear the reputational and other damage to my name [this causes].”
Without disclosing her next course of action, Mosidi on Saturday said: "We acknowledge receipt of letters from the minister to terminate us as SITA board members, and we have also noted the media statement announcing the interim board in circulation.
"We remain confident and proud of our performance as a board and believe that we added much value to the organisation."