eThekwini City Manager under fire over R53 million payout due to service provider, call for suspension
eThekwini Municipality City manager Musa Mbhele has come under fire after the Constitutional Court dismissed an appeal by the City over a contractual dispute with a service provider. As a result, the City will have to pay the service provider R53 million.
Image: Supplied / eThekwini Municipality
eThekwini Municipality City Manager Musa Mbhele has come under fire with an opposition party calling for his suspension following a recent court order which requires the City to pay a service provider R53 million.
The Democratic Alliance (DA) in eThekwini has demanded that Mbhele be placed on immediate suspension and referred to the Financial Misconduct Board. This demand comes in the wake of a Constitutional Court decision that dismissed the municipality’s attempt to overturn a prior ruling, which held it liable for R30 million that is owed to a service provider.
The matter stems from the municipality's 2013 decision to cancel contracts with Daily Double Trading 479CC. The cancellation was challenged by the company and an out of court settlement agreement was reached between the parties. However the City argued that the lawyer that was involved in the agreement had not been authorised to make such a deal.
The City challenged the settlement agreement in court but the courts have ruled against it, and the municipality’s latest bid to appeal was dismissed this week by the Constitutional Court, which found it had no reasonable prospects of success.
Lawyers for Daily Double Trading have given the City five days to pay or risk having their assets seized by the sherrif of the court to the value of the judgment.
“The DA believes that, as the head of the city’s administration, Mbhele has a duty to safeguard public funds and not act recklessly when ratepayers' money is at stake. The party believes that his conduct in this matter warrants a formal investigation by the Financial Misconduct Board and that he should be suspended from his duties pending the outcome. He had every opportunity to comply with previous court orders related to this matter but refused to, thereby wasting public funds defending an indefensible position," said councillor Thabani Mthethwa in a statement.
Last week, in a statement, eThekwini mayor Cyril Xaba said he fully respects the decision of the apex court.
Once again, I accept the court’s decision and await the finalisation of the quantum. I have already initiated a process to review how and why this happened, including the legal advice provided to the City. This will allow Council to determine what consequence action should be taken and how such monies can be recovered,” he added.
He said where consequence management or recovery of state resources is recommended, such will be applied without fear or favour.
“This is an effective way of rooting out collusive corruption and other malfeasances.”