A forensic investigation by Denel has found that former interim group CEO Mike Kgobe did not commit fraud or dishonesty by approving a backdated acting allowance; instead, his decision was deemed reasonable, and the issue stemmed from differing opinions between two acting chief executives.
The findings are contained in a Bowmans’ report dated March 15, 2024, commissioned to investigate alleged leaks of confidential information to the media and possible misconduct by senior management and executives.
The investigation followed a Sunday World report published on July 2, 2023, alleging that Kgobe had backdated the acting appointment of a seconded official by 17 months, exposing the state arms manufacturer to acting allowances worth R244 000 before tax. An internal memorandum cited in the article suggested Kgobe and two other officials could be guilty of “fraud or dishonesty”.
But after examining emails, payroll records, appointment letters and interviewing witnesses, Bowmans reached a different conclusion. “It is clear that the decision of Kgobe to grant (Shaun) Matthews an acting allowance for the period 1 April 2021 to 30 September 2022 was justified.
“The only reason why Kgobe overturned his decision was due to Hlakoane refuting that Matthews was acting during his tenure as interim CEO.”
The report was referring to former acting group CEO William Hlakoane, whom Kgobe succeeded as acting CEO in September 2022.
The internal assessment concluded that Matthews did qualify for the allowance because he had been performing the responsibilities of acting group manager of strategy from April 1, 2021.
The report also rejected suggestions that Matthews had improperly benefited from the payment. It found Matthews repaid the acting allowance within days of being asked to do so.
Bowmans recommended that Denel pay Matthews an acting allowance for the period from April 1, 2021, to July 31, 2022; correct its SAP records to reflect that he had been seconded rather than transferred from Denel Dynamics to the Denel Corporate Office; and commend him for repaying the disputed allowance without question.
Bowmans did recommend disciplinary action against other officials. One official was recommended for disciplinary action after emailing confidential company documents, including the PR&T submission, from a work account to a personal Gmail account and for assisting another employee in disciplinary proceedings without Denel’s approval.
Another official was recommended for corrective action after sharing confidential payroll information relating to Matthews’ acting allowance.
On the document leak that triggered the investigation, Bowmans found it could not identify who supplied confidential records to Sunday World.
[DENEL COMMENT PENDING]
- A Denel forensic investigation cleared former interim CEO Mike Kgobe of fraud related to approving a backdated acting allowance for Shaun Matthews, deeming his actions reasonable amid executive disagreements.
- The investigation was prompted by a July 2023 Sunday World report accusing Kgobe of approving a 17-month backdated allowance totaling R244,000, with allegations of fraud from an internal memo.
- Bowmans’ March 2024 report found Matthews was entitled to the allowance since April 2021, confirmed by emails, payrolls, and interviews, and that Matthews repaid the allowance promptly when asked.
- Recommendations included paying Matthews the allowance for the specified period, correcting his employment records, and commending him for repaying the disputed amount.
- Disciplinary actions were recommended for other officials leaking confidential data and mishandling company information, but the source of the Sunday World leak remains unidentified.
