Sunday, January 3, 2010

Fresh crisis rocks SABC

New board members vow to challenge imposition of CEO

Published by: Charles Molele, Sunday Times, Johannesburg, 2 January 2009

The SABC has been rocked by a new row with members of the newly appointed board protesting the imposition of a CEO on them by the outgoing board.

At the heart of the dispute is the appointment by the outgoing interim board of former chief operations officer Solly Mokoetle as the new boss of the public broadcaster.

Mokoetle replaces Gab Mampone, who had been acting CEO since Dali Mpofu was suspended 19 months ago - and then given a R12-million payout last year.

Angry members of the newly appointed SABC board have told the Sunday Times that they will challenge the appointment of Mokoetle, who as COO left the SABC in a huff following a damning audit report compiled by Gobodo Forensic and Investigative Accounting in 2005.

The report found that he had badly failed in his corporate governance duties.

Board members said Mokoetle's appointment, which has been approved by the Minister of Communications, Siphiwe Nyanda, had the potential to plunge the SABC into "total chaos" and subject it to the same dysfunctional relationship that existed between the board and management during Mpofu's time.

"This means we won't be able to appoint our own CEO, as boards usually do ... The appointment was very unfortunate and a flagrant disregard of due process," said one member.

The new board members said they intended to act on the Gobodo report and would urgently summon Mokoetle to a meeting to discuss it.

The appointment has also been condemned by the ANC Youth League and the Television Industry Emergency Coalition , which represents actors and production companies.

The Gobodo report, which has been kept under wraps until now, found that the SABC commissioning department- which reported directly to Mokoetle - had paid about R56-million to companies involved in "collusive tendering". Collusive tendering, according to Gobodo, was "a secret agreement between perceived competitors, or between a tenderer and an official who participates in the awarding process" with the intention to defraud the entity that called for the tender.

The Gobodo investigation identified companies responsible for collusive tendering, through links such as cross shareholdings or common directorships.

The report also found that a list of companies had received preferential treatment in the awarding of productions by corrupt SABC employees.

The Gobodo investigation could not pronounce on suspected kickbacks as it was not mandated to investigate "finances of suspected individuals, especially the suspected flow of funds between tenderers and employees". It noted that this aspect could be properly probed by the "appropriate investigating authorities".

The Gobodo report recommended, among other things, "that appropriate disciplinary action be considered against those employees of the SABC ... identified in the executive summary of our report.

"Based on the fact that the actions of individuals, prima facie, constitute possible tendering or unlawful conduct, we recommend that the SABC considers making our report available to appropriate investigating authorities, like the Commercial Crimes Unit of the SAPS or the Scorpions."

The report pointed out that the Operational Executive Committee of January 22 2001 had recorded that Mokoetle "be accountable for all the governance issues relating to purchasing of programmes".

"The minutes further record that the COO should issue a document in which Exco members and all SABC's staff declare their interests in any service or transaction or related matter, that could affect the SABC." Mokoetle failed to do as instructed. The report also noted several instances where Mokoetle was among the officials who approved the commissioning of TV production companies said to be involved in collusive tendering.

The Gobodo report found that commissioned production companies were owned by friends of senior employees of the SABC's commissioning department, who awarded tenders without following established procedures.

After the report was handed to the SABC board and the group executive, Mokoetle was escorted out of the SABC building by security guards. He later joined the stop-start Telkom Media television station, where he worked as chief content officer.

Neither the Eddie Funde-led board nor the next board, led by Kanyi Mkonza, acted on the report. A member of the incoming board has called this "a dereliction of duty on their part".

One of the new board members said they were "concerned that the interim board went ahead with the appointment despite knowledge of adverse information against the incumbent".

"This raises the issue of validity and legality of Mokoetle's appointment. It is not a procedural issue in terms of labour law but it is a substantive issue," the board member said.

The board member said together with the previous boards, the interim board had breached the Companies Act, the Broadcasting Act and King II Report on Corporate Governance by appointing a "compromised candidate".

Outgoing chairman Irene Charnley defended her interim board's action.

"There is nothing in the Broadcasting Act's article 11 and 19 saying we could not appoint," said Charnley.

Lumka & Associates, the recruitment agency which interviewed Mokoetle and other candidates for the position, said it was not aware of the Gobodo report and its recommendations.

Together with the new board, Mokoetle will have to come up with strategies to turn around the fortunes of the broadcaster, which reported a R910-million loss in the 2008-2009 financial year. The government has approved a R1.47-billion loan guarantee against which the SABC can borrow in the markets.

ANC Youth League spokesman Floyd Shivambu slammed the interim board's actions. "We believe the interim board acted irresponsibly," he said. "We would have loved to see the new board appointing the CEO because he will be accountable to them and both are supposed to work together for the next five years."

The Television Industry Emergency Coalition echoed these sentiments.

"We consider it very unfortunate," said the organisation's Desiree Markgraaf. "What pushed them to rush and appoint? The new board is going to run the SABC together with the new CEO for five years. Surely they are the ones who should have made the appointment?"

Mokoetle's lawyer, Bongani Dlodlo, said his client denied any wrongdoing during his tenure at the SABC "whether arising from the Gobodo forensic report or any other allegations thereof". Dlodlo said no governance transgressions could be levelled against Mokoetle, and his fitness to lead the SABC was not in doubt. "Our client has nothing to hide," he said.