Vijay Misra awarded R6.6m

Durban - Vijay Misra, the former chief executive of Ithala Development Corporation who was fired three years ago for his alleged role in granting unsecured loans to the politically connected, has been awarded R6.6 million for unlawful dismissal and been given his job back.

This was the ruling of Commission for Conciliation, Mediation and Arbitration commissioner Lester Sullivan after a protracted legal battle rumoured to have cost the KwaZulu-Natal government-funded “bank” as much as R50m for a forensic audit, a disciplinary inquiry, and legal fees.

Ithala’s attorney, Dunstan Farrell, described the award as “outrageous”, saying he had been instructed to take it on review to the Labour Court. But Bruce MacGregor, acting for Misra, said he believed the award was “well-reasoned and not reviewable”.

“The senior arbitrator was clear he had done no wrong. One of the concerns is taxpayers and depositors are bearing the cost of this never-ending litigation which could take another year, during which his compensation will increase by another R2m.”

He said Misra had also been successful in another matter in the Labour Court in which he had been awarded more than R111 000 for leave pay Ithala had refused to pay.

Misra, a chartered accountant who earned R2m a year on a five-year contract only due to expire in December last year, had been fired after a disciplinary hearing chaired by University of KwaZulu-Natal law professor Brenda Grant in which he had faced 41 counts of misconduct involving loans which had not been paid back.

He had been found guilty on 11 charges relating to three transactions. These included an R85m loan given to the failed Dolphin Whispers development at the Point, in which Nelson Mandela’s grand-daughter Nandi Mandela had been involved, another loan of about R13m to Cedar Falls property belonging to Dr May Mkhize, the wife of then-premier Zweli Mkhize, and a third loan of R5m given to Fatel CC, to train artisans.

During the hearing, Misra – chief operations officer until his appointment as chief executive – denied any wrongdoing. He said he had been bullied by “senior politicians” and the previous chief executive, Sipho Nyembezi.

With regard to the loan to Mhkize’s company, he said when he queried the loan with the chief operations office at the time, Sipho Shelembe told him: “If you persist with your stance, do so at your peril.”

Grant said Misra had never suggested he had acted under duress, or out of fear to improperly secure or approve a loan and in his various positions he had statutory obligations to protect Ithala’s interests.

But commissioner Sullivan ruled yesterday that Grant had been wrong and Misra had been unfairly dismissed.

Regarding the charges relating to Dolphin Whispers – built by controversial contractor Jay Singh – he said only R49m had been advanced and Ithala had had to buy back the shell of the building for R25m. No repayments had been made. Misra claimed it had been Shelembe who had changed the loan from a “mortgage” requiring a bond, to a bridging finance loan which did not.

Sullivan said Misra was a “truly impressive witness”. In contrast, Ithala relied on evidence of people not present at the time and seemed to rely on cross-examination of Misra which lasted about 16 days spread over 15 months.

Regarding the Cedar Falls loan, Misra was accused of not informing the Board Credit Committee that the Management Credit Committee had not approved the loan.

Sullivan said the evidence was Shelembe had agreed to do this, removing that responsibility from Misra. He said the R5m loan to Fatel had been paid out fraudulently. No repayments had been made and it had been written off. He rejected Ithala’s version that Misra had changed the loan from a “working capital” one to bridging facility, saying the documentation did not support this.

Regarding Grant’s finding that Misra had shown contempt towards Ithala employees at the disciplinary inquiry, Sullivan said this was understandable given that he was at risk of losing his job.

Bar one person who still sat on the board, all the others had left, so there was no reason why he could not be reinstated.

While he directed that Misra return to work within three days, he would have to wait it out at home until the review was heard. Ithala would have to put up the R6.6m as security pending the review.

Vijay Misra, said the past three years had been “absolute hell”.

“Words cannot describe what I have been through to get justice. It has been taxing on me and my family.”

He said he had not been able to work full-time, although he had been doing some consulting. “In my mind I was still the chief executive of Ithala and I wanted my job back. It was important to clear my name.”

Misra confirmed that, in his evidence, he had spoken of “loans to politically aligned people”, but he did not want to be drawn further on that.

He said he did not know what really motivated the charges. “I am ready, willing and able to go back to work tomorrow if need be. But when my lawyer wrote to Ithala to ask where and when I should report for duty, they said they were going to take the award on review. That could take another year. I cannot wait that long. I will have to look for something else.”

The Mercury

** CORRECTION: In this article, as published in The Mercury on June 24, 2015, it is incorrectly reported that Vijay Misra was the chief executive of Ithala Development Corporation when, in fact, he was the chief executive of Ithala Limited and it is to this post that he has now been reinstated by the CCMA. The error is regretted. The Mercury welcomes comments and suggestions, or complaints about errors that warrant correction. These can be emailed to mercnews@inl.co.za.