A former acting CEO of Downtown Music Hub (DTMH) is accused of having mismanaged the company.
Multiple sources who worked at DTMH allege that the institution was long exploited as a cash cow by the former chief executive, whose name is known to Sunday World, and the Cultural and Creative Industries Federation of South Africa (CCIFSA).
However, when contacted for comment, the former Downtown Music Hub boss said he was merely a board member.
“I was not at the helm of that institution but a board member. And I served on the board for five years from 2010. I know nothing about the funds because I was not involved in finances or management. Our task was to revamp the place, and that’s what we did. I left the place in good order, including the lifts,” said the former CEO, who cannot be named due to legal reasons.
The allegations against the former CEO come after Sunday World‘s attempt to trace where over R93-million that was paid by the Department of Sport, Arts and Culture (DSAC) over nine financial years has drawn a blank.
This is because no one wants to claim ownership of Downtown Music Hub (DTMH), meaning the R93-million that the department has channeled into the music hub remains unaccounted for.
A source close to the situation revealed that DTMH is neither owned by the Department of Sport, Arts and Culture (DSAC) nor the National Arts Council (NAC).
“It is not true that NAC owns DTMH. I know this because DSAC and NAC used to argue about it. NAC’s position was that DTMH did not fall under their mandate, and as such, they could not be held accountable for it.
Private unregulated institution
“The biggest issue is that DTMH was never officially declared a government institution. And therefore it is not regulated. As a result, it could easily be classified as a private institution since no one has taken formal ownership,” said the source.
Another insider added: “This institution was always treated as a cash cow by [the former CEO] and his CCIFSA friends. At the time, he was the acting CEO of DTMH. Eventually, CCIFSA became like an ATM for DTMH. Whenever they needed funds, they would contact CCIFSA, and CCIFSA would pay.
“At one point, they owed millions of rands to the City of Johannesburg for electricity, and CCIFSA covered the bill. Salaries for board and staff members also came from CCIFSA. Essentially, DSAC would transfer funds to CCIFSA, which would then pay on behalf of DTMH. It was a very strange and corrupt arrangement.
Funds meant for renovation were pocketed
“Funds meant to refurbish DTMH were allegedly pocketed by [the former CEO] and his associates. For example, he was supposed to replace an old, dysfunctional lift but didn’t. Instead, the same faulty lift remained. Even the carpet that was meant to be replaced was left untouched. No one knows what happened to the money allocated for those renovations.”
A former chief director at DSAC, Kelebogile Sethibelo, said: “The board members were appointed by [then DSAC] Minister [Nathi] Mthethwa without following any formal policy. My role at the time was to implement the minister’s instructions. He gave me the names, and I added them to the list of board members. I knew the process was flawed and raised my concerns, but no one listened.
“I can confirm that [the official] was the acting CEO at that time. When I visited DTMH, he was the one showing me around. However, he and the board members were reporting to another official, Charles Mabaso. Mabaso was responsible for funding DTMH,” said Sethibelo.
Tony Kgoroge, who was president of CCIFSA at the time, confirmed that CCIFSA made payments on behalf of DTMH.
Ex-CEO denies allegations
“I can confirm that we received the money from DSAC. And we, as CCIFSA, had to pay some of DTMH’s debts, including electricity and security. We saw a need to save that institution and decided to intervene. At the time, [the accused] was the acting CEO. But to say CCIFSA was an ATM for DTMH is outrageous,” said Kgoroge.
A response from Mthethwa was not readily available. It will be added once received.
