Luvuyo Bono: Why I took municipality to court over MBDA board

OVER the past few days I have been inundated with calls from many people asking why I decided to litigate the Nelson Mandela Metropolitan Municipality for removing me from the MBDA board. Others went to the extent of claiming that my actions were tantamount to undermining the democratic council under the leadership of mayor Danny Jordan.

Some have argued that the timing of my actions is not right, given the fact that the local government elections are around the corner. I therefore wish to state categorically that all of these issues were considered while agonising about the decision to litigate or not.

When leaders of government take decisions that are not in congruence with the laws of the Republic of South Africa, despite being advised, one is left with no alternative but to ask the courts to make an objective judgment. The MBDA, like any state institution, is public property that cannot be left to the whims of leaders who would want to treat it as their personal fiefdom.

Former mayor Benson Fihla appointed the MBDA board in September 2014. At the inaugural meeting, then deputy mayor Chippa Ngcolomba welcomed the new MBDA board directors.

This was followed by the board induction/strategic planning session, in which the municipality as the shareholder was represented by former mayoral committee member for budget and treasury Balu Naran, chief financial officer Trevor Harper, Lutho Nduvane, on behalf of the economic development, tourism and agriculture directorate, and MBDA senior management led by the former chief executive. Subsequent to this meeting, there have been a number of interactions between the shareholder and the board.

The fact that the board was not properly constituted in terms of the Systems Act of 2000 never arose in any of the meetings. It has been disappointing to learn that chief executive Pierre Voges was aware of this fact and in breach of section 94(1)(c) of the Municipal Finance Management Act (MFMA), and did not disclose this to the board.

In the process he exposed himself to being disciplined by the board. It would not be the first time that Voges allegedly committed such misconduct.

Chantal du Pisani, who despite working for Access Management, was a board member until one meeting when the board vigorously dealt with members who were conflicted. This happened under the nose of Voges who allegedly chose to neglect his fiduciary duties under the MFMA.

The board’s only conclusion was that the basis for its dissolution was triggered by it taking a decision not to renew automatically Voges’s contract. In my discussions with the mayor, he also understood how and why the board came to this conclusion.

The reasons for not renewing Voges’s contract are based on the contract of his employment.

When Voges was informed of this, he wrote numerous e-mails in which he alluded to the fact he was not interested in the job but that the mayor wanted him to continue. I warned him that the issues he was raising had the potential of discrediting the employment processes of the board and the mayor.

Why the shareholder intervened and insisted that Voges’s contract be renewed, contrary to the provisions of the contract and against the law, remains a mystery. Would the municipality have gone to these lengths if it was another Sipho’s contract that had expired?

Would the municipality have gone as far as to dissolve an entire board in protection of another individual? As a board we stood our ground that we had a fiduciary duty to follow the due processes of the law.

The Municipal Systems Act of 2000, section 93L (1) stipulates that the “board of directors must appoint the chief executive officer” and subsection (2) is instructive that the chief executive officer is accountable to the board for the management of the municipal entity. It is unfortunate that some council members who understood the board’s position and cogent legal arguments put forward by the legal secretary of the board were subsequently threatened, abused and accused of being traitors.

In the meeting of April 4, minutes before the decision to dissolve the board was taken, I repeatedly put forward to deputy mayor Bicks Ndoni and the rest of the councillors who attended the meeting not to continue with this unlawful decision.

I had hoped acting city manager Johann Mettler, who, I am advised, has a legal qualification and is an officer of the court, would give the municipality proper legal advice and stop it from transgressing the law. To my surprise, the board was dissolved and the reason given was that the decision was based on some legal opinion that did not consider the fact that the Constitutional Court had confirmed in the Motau matter that compliance with the Companies Act was compulsory unless there was an exemption from the minister.

This was a final nail in the coffin. Before I left, I advised all in the meeting that I had tried everything to ensure that justice had prevailed, that my rights were reserved and I would take legal action if the board was removed without following administrative processes. This promise I carried through.

I decided that I would be the David defined by Judge Mogoeng Mogoeng in the now well reported EFF matter against the president, and I would use my own resources to fight against the most powerful and well-resourced Goliath who used state resources in the achievement of its goals, however irregular they are.

Following my success on April 19 in the high court in obtaining an interdict against the NMBM from replacing us as directors, the municipality initiated settlement negotiations with me and the other three directors who instituted the action. The municipality would not have initiated settlement negotiations if it was of the view that its case was not weak.

I state categorically that the municipality did itself a favour in settling the dispute. It is common cause that the municipality:

Failed to comply with section 71(1) of the Companies Act, contrary to the cautionary note of the board secretary and my repeated plea to it;

Failed to comply with section 93A(c) of the Municipal Systems Act, in that it did not establish and maintain clear channels of communication between the municipality and the board;

Breached its legal duties of accountability, transparency and fairness;

Breached my right to be heard, which is underscored by constitutional principles of fairness and transparency;

Flagrantly disregarded the provisions of section 195 of the constitution which provides that public administration must be governed by the democratic values and principles enshrined in the constitution, including the following principles contained in section 195: a high standard of professional ethics must be promoted and maintained, public administration must be accountable and transparency must be fostered by providing the public with timely, accessible and accurate information, and good human resource management and career development practices to maximise human potential must be cultivated.

The above reasons, which should be at the core of not only the number one citizen of the city, but on his officials too, were disregarded in the name of dictatorship. The municipality’s actions were in bad faith and amount to fruitless expenditure, which is recoverable from those who acted, despite being advised that the removal of the board was unlawful.

If my actions are seen as undermining the democratic government, the contrary is true. My actions are aimed at strengthening the democratic accountability of state institutions.