Usaasa CEO suspended after breakdown with board - TechCentral

Usaasa CEO suspended after breakdown with board

Lumko Mtimde. Image: GCIS

The suspended CEO of the state-owned Universal Service & Access Agency of South Africa (Usaasa), Lumko Mtimde, has come out guns blazing against his employer in the labour court, accusing the agency’s board and its chairman, Mawethu Cawe, of acting in “retaliation” against him.

This, he claimed, was the result of him reporting what he has described as the “unlawful actions” of the board to national treasury, the auditor-general and the minister of telecommunications & postal services.

Mtimde has accused the board of the long-troubled agency, which was established to improve ICT services in underserviced communities, of acting unlawfully. In legal correspondence seen by TechCentral, Usaasa has denied these allegations.

TechCentral revealed on Thursday that Mtimde had been suspended in mid-March. This only came to light last week when Usaasa briefed members of a parliamentary portfolio committee on the agency’s annual performance plan.

“The suspension relates to allegations of various acts of misconduct,” Usaasa said on Thursday in response to questions from TechCentral. It declined to comment further, saying disciplinary hearings were confidential.

Mtimde took the Usaasa board to the labour court on 24 April on an urgent basis, but the court decided the matter wasn’t urgent. Mtimde said the court would still consider the case “on the normal court roll”. He vowed to fight a cost order against him.

In a letter to Mtimde, asking him to explain why he shouldn’t be suspended, Cawe wrote: “The reason for the disciplinary hearing is based on the information at the disposal of the board suggesting among other (things) that you are in breach of your contract of employment; you have been grossly negligent and incompetent in carrying out your duties; you have deliberately failed to follow reasonable instructions given to you by the board; and you have been grossly dishonest in the manner you have conducted yourself as the accounting officer of Usaasa.”

He was then suspended on 14 March, with Usaasa employees asked in a company e-mail to “desist … contact with the CEO during his period of suspension … (to) preserve the integrity of the disciplinary inquiry and protect potential witnesses from possible undue influence or intimidation”. Cawe promised to convene the disciplinary hearing within 60 days of the suspension (13 May).

‘Unlawful actions’

In court documents filed by Mtimde’s attorneys, the suspended CEO hit out at the Usaasa board and Cawe, accusing them, among other things, of “acting in retaliation” after he, Mtimde, reported what he described as the “unlawful actions” of the board to national treasury and the telecoms minister, Siyabonga Cwele.

Cawe wrote to Mtimde on 23 February informing him of the board’s intention to suspend him pending formal disciplinary proceedings.

The court documents show the list of allegations against Mtimde is lengthy, but some of the more serious ones include that he:

  • Failed to process and disclose to the board a letter prepared by Makhubela Attorneys about terminating contracts with set-top box manufacturers. (Usaasa is responsible for disbursing funds for government-subsidised set-top boxes for poor communities, itself the subject of legal contestation.)
  • Failed to institute a process for the audit of 100 000 set-top boxes and antennas in terms of the contract signed with manufacturers and under a resolution of a board committee, thus “exposing the agency to huge financial risks and damages claims”.
  • Sent a letter, without authorisation, to set-top box manufacturers binding the agency to the payment of the exchange-rate variance without being authorised to do so.
  • Failed to observe protocol by ensuring that communication with the executive authority (government) was approved by the board prior to it being sent.
  • Altered minutes of a meeting and added sections in the governance agreement that were not approved by the board and then failed to alert the board to these “substantive changes”.
  • Deliberately provided false information to government regarding a decision of the board on payments to a service provider responsible for rural broadband roll-out.
  • Went against a resolution of the board by inducing the company secretary to take a lower salary than she was promised. This was “aimed at undermining the authority of the board and second-guessing its decisions”.
  • Was persistently absent from work without authorisation.
  • Failed to resign from the boards of other entities after committing to do so the telecoms minister.
  • Failed to correctly manage a process around a contract with software supplier SAP.
  • Failed to execute various board resolutions.

Mtimde, however, has denied the allegations and, in correspondence to Cawe explaining why he should not be suspended, accused the board of “fighting back revengefully and victimising me for challenging their unlawful actions…”

In his founding affidavit in the labour court, Mtimde said the decision to suspend him was “actuated by malice and absolute bad faith and constitutes abuse of power”. He intimated that there was a serious breakdown in relations between himself, Cawe and other members of the board. He said the board meeting which took the decision to suspend him was itself unlawful.

“I am advised that I qualify for protection in terms of section 3 of the Protected Disclosures Act, having reported the conduct and actions of the board to the national treasury, the auditor-general and the minister both in respect of the appointment of the company secretary and the overall conduct of the board,” he said, adding later: “I submit that it is abundantly clear that I am being punished both for refusing to carry out unlawful instructions and for reporting the unlawful actions of the board.”

He accused the board of violating his “right to dignity” by “humiliating” him “through an unwarranted suspension”, adding that he has “earned a good reputation in the broadcast and IT sectors” and the suspension will “only serve the purpose of damaging (his) reputation”.

The suspension, which he said is “based purely on suggestion and innuendo”, will have “an adverse effect on my standing”. It will be “difficult in future to regain such standing should this suspension in particular be allowed to stand”.

He claimed in the court affidavit that he is “being punished for standing up to governance lapses by the board”.

Mtimde said the allegations against him have either already been investigated or dealt with either through reports submitted or decisions taken by the board or its committees, or are the subject of pending legal and other processes. His affidavit goes to great length to refute many of allegations levelled against him. Most of the allegations “have been dealt with or investigated” or are “simply old”, he said.  — © 2018 NewsCentral Media

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