ANC slams USAASA's 'delinquent directors'

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Suspended USAASA CEO Lumko Mtimde.
Suspended USAASA CEO Lumko Mtimde.

The ANC has labelled the way the Universal Service and Access Agency of SA (USAASA) handled the suspension of CEO Lumko Mtimde as "criminal".

This after USAASA quietly suspended Mtimde pending a disciplinary hearing earlier this year. The suspension relates to allegations of various acts of misconduct, the state-owned entity said.

Following his suspension, Mtimde, who has strong ties with the ANC, took USAASA to the labour court. He also asked public protector Busisiwe Mkhwebane to investigate alleged abuse of power by the board.

The disagreement emanated from the appointment of a company secretary by the USAASA board. Mtimde claimed the appointment was irregular and in contravention of various legislation.

USAASA is a state-owned entity responsible for supporting the roll out of ICT services and ensures connectivity in underserviced areas as well as poor communities.

Improper conduct

Mkhwebane issued a damning report against the board of directors at USAASA following a complaint related to governance, abuse of power and malpractice.

The report says the board violated the law by prohibiting the public protector to conduct investigations based on complaints lodged by Mtimde.

Instead, the board irregularly chose to suspend Mtimde and take disciplinary action against him despite the public protector and the telecommunications and postal services minister ordering that it postpone the matter, says the public protector. Thus, in contempt of a directive from the public protector, it adds.

The public protector says National Treasury and the auditor-general found the board contravened the Public Finance Management Act, Electronic Communications Act and USAASA policies on the appointment of the company secretary.

When directed by the minister of telecommunications and postal services to correct this situation, it failed to do so, says Mkhwebane.

She adds the board subjected Mtimde to occupational detriment following his reporting of a matter regarded as a protected disclosure.

The behaviour of the board rendered the public protector ineffective as it also undermined the objectives of the Protection Disclosure Act, it adds.

And based on these, the public protector states that "accordingly, the conduct of the USAASA board, especially that of the chairperson, Mr [Mawethu] Cawe, constitutes an improper conduct as envisaged in section 182(1) of the Constitution, maladministration and undue delay as envisaged in section 6(5)(a) of the Public Protector Act".

Decisive action

Based on her findings, the public protector has asked the minister of telecommunications and postal services, Siyabonga Cwele, to take decisive and appropriate action against the USAASA board of directors under Cawe for violations that includes failure to heed advice from treasury and the auditor-general in relation to the "unnecessary, reckless and unconscionable" use of public funds.

She also asked the minster to ensure board members are held personally liable for legal costs incurred after they were made aware of the complaint lodged with the public protector, as well as for monies concerned with the disciplinary enquiry against Mtimde.

Cwele must also consider whether it is necessary to secure a declaration that finds all members of the board to be delinquent directors, and facilitate in-depth training for a newly appointed board of directors through consultation with the director of the National School of Government and the minister of public service and administration.

She also asked the minister to disregard the USAASA board's disciplinary enquiry outcomes on Mtimde.

For the USAASA board, the public protector's key remedial actions include lifting Mtimde's suspension within seven days after the report is issued; extending an apology to Mtimde within 15 days for the "irrational and inappropriate manner" in which he was handled; as well as developing a policy to protect staff in similar situations to Mtimde and providing adequate support that will encourage staff to disclose incidents of malfeasance.

For the CEO of USAASA, Mkhwebane says he must consider treasury and the auditor-general's report in relation to the appointment and remuneration of the company secretary. In so doing, recover monies lost due to irregular expenditure from board members, in their individual capacity.

The CEO must also calculate and recover monies spent in regards to the disciplinary enquiry from board members, in their individual capacity, and ensure no employee is victimised or subjected to occupational detriment for reporting corruption or lodging a complaint. The other recommendation is to develop and institutionalise a policy on protection of whistle-blowers.

"I derive no joy in any of this. It obviously negatively affected me and my family. But importantly, it feeds into the troubling narrative about incompetent people getting appointed to run state-owned entities while also creating unfair impressions about my competence and integrity," says Mtimde in reaction to the report.

"But I had to constantly remind myself that in defence of our democracy, it is important to always stand up to wrongdoing, regardless which directions it emanates from. This is how we fix and build our country moving forward."

In a short statement sent to ITWeb this morning, USAASA says: "The Universal Service and Access Agency of South Africa received the public protector's report on the suspension of the chief executive officer, Mr Lumko Mthimde.

"The board of directors is currently studying the report and will be in a position to provide an official statement in due course."

Reckless use of public funds

Meanwhile, the ANC says it is satisfied with the public protector's findings and remedial actions; in particular, it supports the finding that the minister takes decisive and appropriate action against USAASA's board of directors for violations that include failure to heed treasury and the auditor-general in relation to the "unnecessary, reckless and unconscionable" use of public funds.

"We further support that the minister consider whether it is necessary to secure a declaration that finds all members of the board to be delinquent directors. We call on the minister to immediately implement the remedial actions imposed by the public protector and we will monitor the implementation of these," says Jabu Mahlangu, chairperson of the ANC study group on telecommunications and postal services.

"This ruling by the public protector sets good governance precedence against abuse of power by some in the boards of state-owned entities. It is a lesson that those who accept fiduciary responsibilities to serve in boards must learn from. The actions and contraventions of law by USAASA's board are criminal in nature and deserve harsh action, as a lesson to avoid these in future."

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