Post Office suspends CEO

By Damaria Senne, ITWeb senior journalist

Johannesburg, 20 Nov 2006

The board of the SA Post Office (SAPO) has suspended group CEO Khutso Mampeule with immediate effect and with full pay, pending the outcome of a disciplinary hearing into his alleged misconduct.

Phuti Tsukudu, chairman of the SAPO board, says SAPO has lost confidence in Mampeule.

"He appears to undermine the board's authority and his impartiality has been called into question with regard to the management of the planned forensic audit that the board has commissioned to investigate allegations around improper tender practices," she says.

The suspension is the latest development in an investigation into SAPO tender irregularities over 13 contracts that were issued while former MTN SA boss Maanda Manyaatshe was SAPO CEO. The contracts were subsequently cancelled.

Vision Design House (VDH), one of the companies whose contract was cancelled, subsequently sued SAPO for unlawful termination of the contract and for payment for work that had already been done at a number of post offices. In turn, SAPO made a counterclaim against VDH for what it called hidden profits claimed by VDH when the company was not entitled to them.

While Manyaatshe was not overtly accused of any wrongdoing in the SAPO/VDH matter, his name was linked to the matter due to the fact that the transactions happened during his tenure at SAPO.

Manyaatshe denied any wrongdoing, and subsequently resigned from MTN SA. The resignation would protect MTN's reputation, he said, and afford him the opportunity to consider the legal matter in his private capacity.

Procurement procedures

In Manyaatshe's defence, Bart Henderson, a forensic auditor and CEO of the South African Institute of Corporate Fraud and Management, claims allegations against Manyaatshe were made to mask the fact that SAPO was a troubled organisation that may be unable to fulfil its obligations should VDH win the case.

He also alleges proper procurement procedures were violated at SAPO during Mampuele's tenure and outlines in documents eight instances, which he says his company is able to confirm.

"One instance suggests that a contract to the value in excess of R8 million was acted upon on the strength of one SMS message," he says.

SAPO issued a statement denying all allegations and provided its defence for each alleged incidence of tender deviation.

Tsukudu adds that Mampuele's suspension does not imply he is guilty of misconduct.

This arrangement was effected to ensure the forensic audit and accompanying organisational assessment can be conducted without prejudice and hindrance, she says.

The conclusion should also not be drawn that Mampeule is being targeted under the forensic audit, or the organisational assessment, she says.