City of Ekurhuleni

Ekurhuleni Press Releases

THE CITY OF EKURHULENI RESPONDS TO ALLEGATIONS OF LOOTING IN AN ARTICLE PUBLISHED BY THE STAR NEWSPAPER

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 On Wednesday, 6 February 2019, The Star Newspaper published an article entitled, 'R112m looting scandal haunts Ekurhuleni'. In the article, the City's suspended Chief Financial Officer (CFO), Gugu Malaza, alleged that a R112m looting frenzy took place across the City's 112 wards. The City expresses utter dissatisfaction at the The Star's failure to provide the City with the opportunity to respond to the above allegation.

The two questions that were sent to the City did not request the City to respond to the allegations presented by Ms Malaza. Had the City been given the platform to respond, it would have explained that the purported forensic report was unauthorised and commissioned unlawfully.

The report commissioned by the suspended CFO is in contravention of the provisions of municipal legislation. Forensic investigations, in terms of the CoE governance structure, are performed under the authority of the City's Internal Audit Department. In this case, the CFO commissioned the investigation in an irregular manner. The City has no record of a forensic investigation that has been carried out to look into the affairs of the Lungile Mtshali Project.

Furthermore, it is important to note that Meodi Chartered Accountants were only appointed to perform work relating to Annual Financial Statements of the City. The scope of work did not include forensic work. Any payments made to the company for work done outside of its approved scope would have to be paid back to the City's coffers.

The City reiterates that the charges that have been levelled against Ms Malaza are justified and it will continue with the disciplinary process according to the relevant legislation.

The allegation that she was dismissed for "unearthing a slew of bogus invoices and non-existent or shoddily done projects in a R112 million looting frenzy across the City's 112 wards" is devoid of truth. The City has verified the excellent work that was done in the City's wards and all is above board. In this regard, the City invites the media to visit each ward in which the Lungile Mtshali project was commissioned.

Regarding the question of why the City waited 19 months to take action against the CFO, it wishes to state the following: The CFO was appointed in May 2017. She failed to disclose that she was the subject of a disciplinary process by her previous employer which had resulted in her dismissal. In July 2018, following an internal investigation by the City on the appointment of the CFO, the CFO was requested to clarify the allegations that she had not disclosed that she was facing a disciplinary process during her recruitment in the City. However, she only responded in October 2018 after numerous attempts to get her to respond.

ISSUED BY

Phakamile Mbengashe
Acting Spokesperson to the Executive Mayor
082 850 6084

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