Acsa spells out details of irregular spending scandal

The board of Airports Company of South Africa has noted an article in Daily Maverick by Ray Mahlaka (“Airports Company of South Africa counts the cost of former CEO’s financial misconduct”, 10 November 2019). We wish to set the record straight on several assertions and insinuations made.

Three employees implicated in wrongdoing

Mahlaka indicates that three managers have been dismissed from Acsa. The facts are that two of the managers referred to in the article have since been reinstated and a settlement was reached between the company and the third manager – post a protracted disciplinary process.

Disciplinary measures against former CEO

In May 2018, former transport minister Blade Nzimande made a public undertaking to look into allegations of maladministration, corruption and State Capture in the state-owned entities of the Department of Transport. These included allegations levelled at former Acsa CEO Bongani Maseko.

At the time, Nzimande indicated in a statement that “due to the high rate of resignations at the Airports Company South Africa board, the process to appoint a new Chief Executive Officer has been derailed. I, therefore, have extended the contract of the current CEO, Mr Bongani Maseko, for a period not exceeding six (6) months, in order to ensure that there is no vacuum of leadership, especially at the senior management level.”

The minister also indicated that upon filling the board vacancies, and the formation of governance committees, he would instantly direct the board to take forward the findings of the three separate forensic reports produced by advisory groups Deloitte, attorneys Norton Rose Fulbright and Dr VS Ncube Consulting.

The new board appointed in September 2018 did not hesitate to start the process to investigate the various allegations as soon as it began its term of office. The board appointed ENSafrica to assist it in finalising the matters pertaining to the former CEO.

In November 2018, ENSafrica presented a report to the Board Ad Hoc Committee, appointed by the board to deal with the former CEO’s matters. The report had recommendations on concluding the CEO’s matters and it was subsequently submitted to the board.

The board accepted ENSafrica’s advice that no disciplinary action be instituted against Maseko in the light of the imminent expiry of his employment contract on 30 November 2018. ENS recommended that the forensic reports be submitted to the Directorate for Priority Crime Investigation (Hawks) for criminal investigation and the board resolved to proceed with the recommendation and reported the matter to the Hawks. The forensic reports are being handled by the law enforcement agency.

We put it on record that Bongani Maseko was not dismissed from Acsa; his employment contract expired on 30 November 2018.

Acting CFO’s response to shareholders on irregular expenditure

We further bring to your attention that acting CFO Lindani Mukhudwani’s response to shareholders on irregular, fruitless and wasteful expenditure was not confined to the matter related to the former CEO. Her response was related to the overall treatment of irregular, fruitless and wasteful expenditure in the business.

Management of irregular, fruitless and wasteful expenditure

Our supply chain management team is in the process of assessing root causes for all recorded irregular expenditure with the view to preventing occurrences of similar expenditure, condemning recognised irregular expenditure, and allowing management an opportunity to apply consequence management where such irregular expenditure has been incurred by the business. DM

Refentse Shinners is Group Executive: Corporate Affairs at Airports Company South Africa.