The Minister of Communications and Digital Technologies, Mondli Gungubele, has appointed Khayalethu Ngema with immediate effect as administrator of the Postbank.
In his statement on Thursday, Gungubele said he was firing the board; however, five of the seven non-executive members had already served him with resignation letters on Wednesday.
Sunday World learnt that the sixth board member also submitted a resignation letter by Thursday morning ahead of the Postbank annual general meeting (AGM) later in the day.
A leaked internal statement accused Gungubele of being hostile, disrespectful, and dismissive to the board from the date he took over from now Minister in the Presidency Khumbudzo Ntshavheni.
Ngema will remain at the helm of the bank pending the appointment of a new board.
According to a statement from Gungubele’s office, the outgoing board faced incriminating allegations from a forensic investigation report by KPMG that Postbank continues to use unlawfully contracted service providers.
The statement said the service providers were paid millions of rands without valid contracts, and no proper procurement processes were followed in their appointment.
“The forensic report recommended that the shareholder must act against the board of directors, a recommendation that was supported by senior counsel’s legal opinion, taking into account the details contained in the report.
“In light of the forensic report, the Minister followed due process and indicated his intention to make his final decision at today’s AGM in terms of Section 71 of the Companies Act, which sets out the process a shareholder must follow to remove directors,” said the statement.
In their defence, the board explained that the service provider threatened to switch off services by midnight on July 31 2023, if Postbank did not pay outstanding fees.
The consequences would have been penalties against Postbank from the SA Social Security Services Agency (Sassa) and grant recipients left stranded, according to a leaked internal statement.
The board outlined the history of the FSS/EC contract, the steps it took to regularise it, and the danger of cancelling it, wrote the author.
Also, the contract was signed before its tenure, so the board members inherited it. In addition, the Treasury refused to regularise it.
However, Gungubele maintained that the board had failed to fulfill its fiduciary responsibilities by allowing payments without following legal procedures.
According to him, the board failed to act with fidelity, honesty, integrity, and in the best interests of Postbank.
Gungubele said on Thursday Ngema has extensive experience leading complex and large public sector organisations through difficult turnarounds and corporate stabilisation.
“He has had to lead various programmes of operational improvement and service delivery innovation.
“As he will assume the role of the board, he will work closely with the recently appointed CEO, Miss (Nikki) Mbengashe and her management team in turning around the Postbank,” said Gungubele.
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