The National Regulator for Compulsory Specifications (NRCS) strategy focus was on source inspections and to lock out non-compliant products before the products entered point of trade and ensure that NRCS was more efficient in regulating the market. Retail and distributor inspections were meant for intelligence gathering and to identify non-compliant products and remove it from the market. Enablers to this strategy was the intelligent utilisation of information technology and effective supervision, collaborative efforts with industry and through the effective risk profiling through the South African Revenue Services (SARS) platform reducing delays at ports. NRCS’ financials showed the total income for 2015/16 at R356 million to increase to R399 million in 2017/18. Transfers (R91.7 million) and levies (R158.9 million) made up the bulk of the income.
Members questioned the increase of the compensation of employees budget allocation by R70 million over the next three financial years and with almost R40 million from 2014/15 to 2015/16. The Committee asked for a schedule of those posts and the salary scales to be forwarded to the Committee. Members also wanted insight in the approval process as well as on the effective of the penalties.
The Committee questioned why goods for export were levied if NRCS was aligning its strategy to the Industrial Policy Action Plan (IPAP) that focused on encouraging and promoting local manufacturing. The Committee again requested some rationale behind this to be forwarded to the Committee.
The Companies Tribunal was established as part of the regulatory reforms ushered in by the Companies Act of 2008. It was established to provide accessible, speedy and cost effective mechanisms for the resolution of company disputes. It began operations in September 2012, currently has a staff complement of 13 out of the 28 approved posts. The Companies Tribunal consisted of independent members comprising of a chairperson, a deputy chairperson and not less than 10 other members appointed on a full time and part time basis.
The two programmes of the Tribunal were Adjudication and Administration. Tribunal members adjudicated and made orders in relation to applications made in terms of the Companies Act as well as resolved disputes in terms of alternative dispute resolution. The administration programme ensured operational efficiency and effectiveness as well as effective stakeholder engagement.The Administration programme medium term expenditure estimates were R12.9 million for 2015/16 increasing to R13.7 million in 2017/18. The Adjudication programme medium term expenditure estimates stayed fairly even around the R2.6 million mark over the three financial years. The grant allocation was R14.2 million for 2015/16 increasing to R15.8 million in 2017/18. Other income which comprised of interest from the investment account, increased the overall income to R15.6 million in 2015/16.
The majority of the discussion focused on the findings of the concluded forensic investigation into the conduct of the chairperson of the Companies Tribunal, AdvSimmyLebala.
Mr G Mr Hill-Lewis (DA) detailed some of the findings of the report. He wanted to know why Adv Lebala claimed for a full day of expenses for work which in many cases did not take more than a couple of hours and in one case for work that took only 15 minutes. He also wanted to why AdvLebalachose not to cooperate with the investigation, because the report made it very clear that he declined to be interviewed and declined to respond to questions. He questioned the Department’s decision to close the matter and also called AdvLebala’s integrity into question. He also stated that the DA would continue to pursue this matter and would also pursue Adv Lebala for the claims he made during his time served on the Seriti Commission, which Mr Hill-Lewis claimed amounted to R10 million.
Mr D Macpherson (DA) felt that the Committee did not effectively exercise oversight over this matter and Members of the ANC strongly objected to his statement that the Committee accepted “half-truths and wishy-washy” responses.
The Chairperson referred to the ongoing violent attacks against foreign nationals and urged all South Africans to support the fight against xenophobia.
The agenda for the meeting was adopted.
Letter to Chairperson
Mr D Macpherson (DA) noted that he had sent a letter to the Chairperson on 14 April 2015 regarding the National Empowerment Fund (NEF) and five questions he believed the NEF should answer. A recommendation was also made that the Chief Executive Officer of the NEF should come to the Committee to answer the questions. He asked how the Chairperson preferred to receive correspondence because he was battling to have urgent issues addressed.
The Chairperson replied that it was not a question of not being responded but, but there had been reference made to this issue last week and it had been resolved that outstanding questions that Members had sent in should be expedited.
Mr Macpherson clarified that the specific questions related to a business support tool the NEF decided to cut and engagement with the NEF was needed because it was an important tool for people wanting to develop business ideas.
The Chairperson replied that it was made clear that the NEF made the cut due to cost measures and it was also made clear to the Committee that DTI would not have an opportunity to capitalise NEF. In addition, Members were aware that the Committee programme was very full and at the very least, a written engagement with NEF could be initiated. It was indeed an important business tool with no funds to support it and perhaps they could indicate if there were alternative ways to deal with it.
Mr Macpherson asked if the Chairperson could explain her position on this matter in writing and also clarify the preferred manner of correspondence with the Chairperson.
The Chairperson replied that Mr Macpherson would be responded to once a response had been received from the NEF.
Resignation of the Commissioner of the Companies and Intellectual Property Commission (CIPC)
Mr G Hill-Lewis (DA) said the Committee should be alarmed about the news of the resignation of the Commissioner of the CIPC, Ms Astrid Ludin and the fact that the entity appeared before the Committee a few days ago and made no mention of the impending governance and leadership crisis. It was alarming that the Committee should learn about a forensic audit into the CIPC Commissioner once that audit was completed and leaked to the newspapers. Members were constantly required to submit Promotion of Access to Information Act (PAIA) applications to get access todocuments. The Portfolio Committee on Trade and Industry was supposed to hold the Department and its entities accountable and exercise oversight over them, but instead had to use every legal option available where the Department should have been open and informed the Committee about the problem and the report that had been issued on the matter. Serious thought should be given to asking the CIPC and the Department to appear before the Committee as some matter of urgency to find out what was going on.
The Chairperson said the Committee was aware, after the January 2015 oversight visit that there were challenges at the CIPC. The update was given in terms of the Commission for Conciliation, Mediation and Arbitration (CCMA) process. The idea that Members were not aware was a total aberration in light of the letter the Committee got from the National Education, Health and Allied Workers Union (NEHAWU).
Mr M Kalako (ANC) said the CIPC should come back and give a full account of what had happened for the Committee to take an informed position.
Mr B Mkongi (ANC) said these events were confirmation of the concerns the Committee had about the operations at CIPC and he agreed that CIPC should be called to appear before the Committee. The report should be forwarded to the Committee at least a week before the meeting so that Members could be prepared.
The Chairperson said the Committee dealt with both CIPC and the Companies Tribunal recently and it should be separated although the entities had a relationship. The issue with CIPC remained the same, because the Deputy Commissioner indicated that the CCMA report would be forwarded to the Committee. The Committee had asked the Minister to give an overview on all the entities and was informed that the Minister was in Indonesia and still was. The Committee would take a position on the Companies Tribunal after the presentation. It was noted that the Committee wanted CIPC to appear before the Committee with the Department to address the issues reported in the media.
Mr Hill-Lewis clarified that the last meeting and the oversight visit talked to the CCMA and NEHAWU progress and the forensic audit into the conduct of the Commissioner was separate matter. It should not be the work of the Committee to go on oversight visits to be informed of issues when the CIPC was before the Committee a few days ago. The CIPC should appear before the Committee with the Minister and the Committee needed to see reports before they became front page stories.
The Chairperson agreed, but showed Mr Hill-Lewis the correspondence from NEHAWU that every Member of the Committee had received that referred to the investigation into the Commissioner. It should not be said the Committee was not aware, because a deliberate decision was taken to let the NEHAWU process run its course before it was reexamined by the Committee.
Mr Macpherson said it was important that the Committee take a principled stance on matters such as this, because clearly DTI was aware of the forensic report, but did not see fit to bring it to the Committee’s attention.
National Regulator for Compulsory Specifications (NRCS) on its Strategic Plan of for 2015/16 – 2019/20 and on the Annual Performance Plan
Mr Asogan Moodley, Chief Exective Officer, NRCS, said the mandate of the NRCS would be executed by delivering on the Industrial Policy Action Plan. The NRCS Strategy was aligned to the following strategic objectives of the DTI
-Facilitate transformation of the economy to promote industrial development, investment competitiveness and employment creation
-Create a fair regulatory environment that enables investment, trade and enterprise development in an equitable and socially responsible manner
-Build mutually beneficial regional and global relations to advance South Africa’s trade and industrial policy and economic development objectives
The strategy focus was on source inspections and to lock out non-compliant products before the products entered point of trade and ensure that NRCS was more efficient in regulating the market. Retail and distributor inspections were meant for intelligence gathering and to identify non-compliant products and remove it from the market. Enablers to this strategy was the intelligent utilisation of information technology and effective supervision, collaborative efforts with industry and through the effective risk profiling through the South African Revenue Services (SARS) platform reducing delays at ports. The strategic goals were to develop, maintain and administer compulsory specifications and technical regulations and to maximise compliance with all specifications and technical regulations. In addition, NRCS wanted to inform and educate stakeholders about the NRCS and ensure an optimally capacitated institution.
Ms Reshma Mathura, Chief Financial Officer, NRCS, gave an overview of NRCS’ financials which showed the total income for 2015/16 at R356 million to increase to R399 million in 2017/18. Transfers (R91.7 million) and levies (R158.9 million) made up the bulk of the income.
Mr A Williams (ANC) asked if the penalties were effective or if non-compliers just paid the fines and continued with the same approach. He asked if the NRCS inspected goods for export with the specifications of the destination countries. He also wanted to know what percentage of the goods and services budget was spent on external consultants and why these jobs could not be done in-house.
Mr Moodley replied that the Act did not empower NRCS to implement penalties and the penalties were implemented by the courts. The amendments to the Legal Metrology Act now made penalties a lot harsher and effective.
Ms Mathura replied that the unaudited amount allocated to consultants for last year was about R1.9 million and the bulk of that was spent on the internal audit. In relation to the total goods and services budget, it amounted to approximately 0.5% of the budget.
Mr Macpherson said NRCS received R109 million from DTI for the current financial year, then the allocation decreased in terms of the budget cuts for the next two financial years, but then the amount jumped to R128 million for 2017/18. The compensation of employees budget allocation increased with R70 million over the next three financial years and with almost R40 million from 2014/15 to 2015/16. He asked that this be explained in terms of the positions being filled and the salary scales. At the last oversight visit there were some 2 000 backlog applications and he asked what would be done to improve and modernise the systems in terms of speeding up letters of approval (LOAs).
Ms Mathura replied that the reduction in baseline was only for two years and that a letter from National Treasury guided the budget projection of R128 million. There might be a reduction at some stage going forward, but that was the figure NRCS received for now.
Mr Moodley replied that the projected increase for compensation of employees was in terms of getting a Head of Legal and a Head of Human Resources at salary scales of level four or five, which amounted to salary packages of around R800 000 annually. As explained before, NRCS has had significant labour unrest for the last three years. The unrest related to certain settlement agreements and demands by organised labour that related to grading of posts as well as positions that emanated from separating NRCS from the South African Bureau of Standards (SABS). It took NRCS approximately four years to build from those processes and the grading of posts was brought to the correct levels. The grading was undertaken by Deloitte independently and NRCS had to correct pension payments which also contributed to the increase in the projections according to CCMA rulings. The projections for the remainder of the Medium Term Strategic Framework (MTSF) balanced itself out if the previous financial years were considered.
Mr Bongani Khanyile, General Manager: Electro-technical, NRCS, replied that the LOA process comprised of administrative and technical components. Once the application was received it was registered, checked for payment and that all the necessary documentation had been submitted and its validity. The application was then handed over to the technical team who evaluated the documentation and checked that all the testing met the industry specifications. In some instances visits had to be made to the factory and it differed from one product to another. In an attempt to improve turnaround times, NRCS started to look into both short and medium term solutions. The number of approvals had increased because NRCS got additional inspectors to assist on certain occasions and by decentralising the process from NRCS’ head office to the regional offices. Overtime for inspectors had also been approved to start next week where they could volunteer to work over the weekends. Risks differed from product to product and NRCS changed its approach to take this into account, as well as the companies’ risk for non-compliance. A document had to be signed to assure compliance to the process. NRCS also changed its approach where a technical report could only be issued once all areas had been complied with.
Mr N Koornhof (ANC) referred to slide 28 and asked that the surplus without cash in 2014/15 that moved to a deficit in 2015/16 be explained.
Ms Mathura explained that the slide merely showed that NRCS relied heavily on the transfers from DTI and if there had not been cash in hand to supplement the reduction, NRCS would have been in that situation.
Mr Mkongi asked for insight into the processes as it related to Strategic Objective 2 and the goal to process approvals within 120 working days and why the process took so long. Strategic goal 3 aimed to increase awareness of the NRCS brand and functions by 5% annually over the next three years and he asked what the percentage was currently. He asked why the current vacancy rate of 8% would only be reduced to 7% over the next three years in light of the goal to build a capacitated organisation with relevant systems to support business.
Mr Moodley replied that in terms of legal metrology, an application for the measuring instrument was received, e.g. a scale. NRCS would have to determine whether the scale complied with all the requirements, i.e. that it correctly measured the amount or quantity of goods. Testing was done over a period of time, e.g. if a one kilogram weight was placed on different sections of the scale, the scale should still weigh one kilogram. It was a lengthy process before that scale could be certified as ready for use, because. A prototype of the scale was then approved and this process ensured that all scales that were manufactured according to those specifications would comply.
Mr Marks Thibela Acting Deputy CEO, NRCS, replied that the filling of vacancies would be contained within the 1% bracket, because filling beyond that would risk financial difficulties and italso took into account replacement posts. A survey had been conducted in 2014 that showed brand awareness at 26%. The 5% annual increase goal was decided, in consideration of the budget, with the Government Communication and Information System (GCIS). Money was transferred to GCIS to procure various radio stations and television channels to raise awareness about NRCS.
The Chairperson said the SABS was on TV the other day explaining what the organisation did and NRCS should also look at getting unpaid screen time to inform the public of the organisation and what they did.
Mr Kalako asked if the inspections done by NRCS included the both the borders and the harbours, what the staff complement was and he asked for clarifications on what goods and services entail.
MrThibela replied that NRCS had a staff complement of 302 with 15 vacant positions. Due to spending pressures, NRCS was not likely to fill those vacancies in one financial year.
Mr Moodley confirmed that inspections were done at airports, borders and harbours.
Ms Mathura replied that goods and serviced comprised of everything excluding depreciation, interest and compensation of employees like maintenance, testing, travel and accommodation for inspectors and training of employees.
The Chairperson commended how NRCS aligned their strategy to the strategic objectives of DTI, especially to the Industrial Policy Action Plan (IPAP). The Auditor-General extensively addressed the levies in the findings and NRCS implemented an amended system and she asked how far that process was. She wanted to know how the levies to be paid by industry was calculated and if levies were paid on all locally manufactured goods, including those destined for export. If that was the case, she asked what the rationale behind it was seeing that the goods needed to comply with standards in the destination countries.
Ms Mathura explained that levies were calculated based on the volume that was imported or manufactured. The tariff was determined by NRCS when the compulsory specifications were developed in consultation with the relevant industry. NRCS consulted with industries annually to agree on increases of the tariff. NRCS levied exports, because the Act did not differentiate on the purpose of the intended production.
The Chairperson said NRCS made it very clear that enablers were taken into account and IPAP’s position was to drive exports and manufacturing. Once goods were exported there was an agreement with the export country that if it complied in South Africa it would comply there and she asked for clarification.
Mr Moodley replied that NRCS inspected certain products against South African standards, e.g. the NRCS Foods and Associated Industries (FAI) Unit was the designated authority for products that were exported to China. The products would only be accepted into the country if there was a health guarantee certificate issued by the FAI Unit. NRCS worked with international organisations and also made input in to standards and regulations recommended internationally and these standards were adopted for the South African environment. When goods were manufactured in South Africa according to South African standards and regulations, there was an element of acceptability internationally. Products not manufactured according to South African specifications did not fall within the jurisdiction of NRCS. NRCS took note on the Chairperson’s point and it would be discussed with the other regulatory bodies.
The Chairperson referred to the tariffs and asked NRCS to respond in writing to the Committee before Thursday, how the export of rubber could be encouraged if NRCS levied the product.
Mr Macpherson asked how transfers could be decreasing by R18 million, but compensation of employees increased by R40 million. He asked for a schedule of compensation of employees that made up the R40 million to be sent to the Committee, because it was difficult to understand how that increase was reconciled in terms of the budget cuts and a decreasing surplus.
Mr Williams said South Africa exported oranges to the European Union (EU) and whole shipments got cancelled because of a few oranges with citrus black spot. He asked if NRCS put emphasis on export goods.
The Chairperson replied that the Minister already took this matter to be tabled before the World Trade Organisation (WTO).
MrMkongicommended NRCS for addressing issues the Committee highlighted following their oversight visit.
The Chairperson thanked NRCS and emphasised that all written responses should be send to the Committee before Friday.
Companies Tribunal on its Strategic Plan for 2015/16 – 2019/20 and on the Annual Performance Plan
Adv Simmy Lebala, Chairperson, Companies Tribunal, said the Companies Tribunal was established as part of the regulatory reforms ushered in by the Companies Act of 2008. It was established to provide accessible, speedy and cost effective mechanisms for the resolution of company disputes. It began operations in September 2012, currently has a staff complement of 13 out of the 28 approved posts. The Companies Tribunal consisted of independent members comprising of a chairperson, a deputy chairperson and not less than 10 other members appointed on a full time and part time basis. Currently there were13 part time members and one full time member.The situational analyse showed that the Tribunal strived to promote economic participation by all players, reduce the cost of doing business and to encourage the use technology to improve ease of access and efficiency.
The strategic objectives of the Companies Tribunal were as follows:
-Adjudicate applications timeously, fairly and in a transparent manner
-Resolve disputes in a cost effective, informal and timeous manner
-To build a body of knowledge around company law
-To promote and maintain sound corporate governance
-To ensure the efficient management of cases
-To educate members of the public and raise awareness regarding the Tribunal
The two programmes of the Tribunal were Adjudication and Administration. Tribunal members adjudicated and made orders in relation to applications made in terms of the Companies Act as well as resolved disputes in terms of alternative dispute resolution. The administration programme ensured operational efficiency and effectiveness as well as effective stakeholder engagement.
Adv Lebala gave an overview of the performance indicators and medium targets of the Companies Tribunal.
Ms Irene Mathatho, Chief Financial Officer, Companies Tribunal, gave an overview of the allocated budget and expenditure allocation. The Administration programme medium term expenditure estimates were R12.9 million for 2015/16 increasing to R13.7 million in 2017/18. The Adjudication programme medium term expenditure estimates stayed fairly even around the R2.6 million mark over the three financial years. The grant allocation was R14.2 million for 2015/16 increasing to R15.8 million in 2017/18. Other income which comprised of interest from the investment account, increased the overall income to R15.6 million in 2015/16.
Ms Agnes Tsele-Maseloanyane, Member of the Companies Tribunal, outlined the human resources strategy. The Tribunal wanted to fill all vacant posts timeously and with the correct calibre of candidates to meet the envisaged growth path with a high performance culture linked to rewards for excellence. The IT strategy over the three year period would focus on the efficient management of cases with the aim at acquisition, implementation and maintenance of ICT technologies to improve and enhance service delivery. The communication strategy aimed to improve accessibility of the Tribunal to members of the public and to create awareness about the Tribunal’s purpose and processes. The anti-fraud and corruption policy talked to zero tolerance, accountability and a duty to protect whistle blowers. The Tribunal had a duty to implement effective anti-fraud control and to institutiedisciplinary proceedings.
The Chairperson highlighted the importance of the Companies Tribunal as an alternative resolution forum to the usual court processes.
Mr Hill-Lewis the Committee had been concerned about the forensic report on the conduct of AdvLebala and the Deputy Chairperson of the Companies Tribunal. He referred to the forensic report and he asked why AdvLebala claimed for a full day of expenses for work which in many cases did not take more than a couple of hours and in one case for work that took only 15 minutes. He asked if this was not an obvious abuse of taxpayers’ money. The report in a number of different examples really called into question the integrity of AdvLebala and the leadership of the Companies Tribunal. Given the mandate and the values that were outlined in the presentation, he asked if it was possible for the Companies Tribunal to continue to function effectively with serious questions of integrity hanging over the heads of its leadership. He asked AdvLebala why he chose not to cooperate with the investigation, because the report made it very clear that he declined to be interviewed and declined to respond to questions. This investigation was ordered by the Minister and over and above the specific investigations, it seemed grossly inappropriate that any civil servant in South Africa could simply not cooperate with an investigation ordered by the Minister into his or her conduct.
Adv Lebala replied that the only thing he could afford was his integrity as a Senior Council and as an Acting Judge. He was not looking for a job when he decided to accept the offer to serve on the Companies Tribunal. The intention was to serve South Africa through an institution in line with his training and it was an honour to apply for the post as chairperson of the Companies Tribunal. The Companies Tribunal had parameters and when it started the parameters were R3 200 for the chairperson and R2 700 for members of the Tribunal. The Minister converted these figures to R7 000 per day for the chairperson, R6 000 per day for the deputy chairperson and R5 000 per day for members of the Tribunal. As a Senior Council in 2012, AdvLebala stated his fee was between R25 000 and R30 000 per day and it showed that money was not a contributing factor when accepting this job in 2012, but rather the opportunity to serve the country.He was willing to hand over the record of his fees to Mr Hill-Lewis to show how the fees were accounted for. There have been cooperation with this investigation from both him and the deputy chairperson and they appeared when called except when work commitments prevented it. The Minister and the Department accepted that he was a part-time chairperson that still acted in capacities such as Senior Council and Judge. The Minister in 2013 told AdvLebala and the deputy chairperson of the Companies Tribunal that this investigation was closed, because it had no merit. It was puzzling that this issue had been closed internally, but not externally. These allegations were made by an anonymous whistleblower and the Minister had a function to investigate such serious allegations. This forensic investigation was initially established with the concern the Minister had about alleged corrupt practices into acquiring buildings for entities. Coincidentally at that time the Companies Tribunal was also looking into acquiring a building for its premises.
The Chairperson reminded AdvLebala that Mr Hill-Lewis was not the Committee and anything he wished to hand out, should be handed over to the Committee Secretary. There were other issues that needed to be responded to.
Ms Tsele-Maseloanyane replied that the Companies Tribunal had been receiving unqualified audit opinions since its inception and it was an accountable organisation with accountable leadership.
Prof Msimang said the Companies Tribunal was a very necessary world class body, because the courts were inundated and there was a dire need for speedy resolutions of disputes in the country. If the Companies Tribunal was operating efficient and effective with a staff complement of less than 50% than intended, he asked if there was really a need to fill the 15 vacant posts. He asked if the entity was getting enough cases and how it was being marketed to become the preferred choice.
Ms Tsele-Maseloanyane replied that it was recognised that the Companies Tribunal did not need to fill the 15 posts. Marketing of the Companies Tribunal was done through the strategic partnerships formed with municipalities and through outreach programmes in communities.
Mr Mkongi asked if the vacant posts were funded and if that was the case, he wanted to know why the posts had not been filled. He referred to the adjudicated applications performance indicator and target and asked what the current percentage of decisions and orders issued within 30 working days. He asked how much irregular expenditure the Companies Tribunal incurred for this financial year.
Ms Tsele-Maseloanyane replied that the Minister approved the staff establishment, but that the budget did not allow for the filling of those posts. Two of the vacant posts would be filled in June 2015. It was a strategic risk, but it was being managed by multi-skilled staff.
Ms TebogoMputle, Registrar, Companies Tribunal replied that cases adjudicated within 30 days after the hearing was at 87% and cases adjudicated after the date of allocation stood at 92%.
Ms Irene Mathatho, Chief Financial Officer, Companies Tribunal, replied that for 2013/14 R193 000 irregular expenditure had been incurred and R110 000 for the 2014/15 financial year. Controls had since been put in place in terms of supply chain management.
The Chairperson said the enquiry seemed to focus on the governance of the Companies Tribunal. Some of the issues revolved around technicalities such as CCTV footage. There was not always CCTV footage and she asked what other systems were in place that governed how fees were structured. She asked if the Companies Tribunal had an internal audit committee and who the accounting officer was.
Ms Tsele-Maseloanyane replied that the Companies tribunal had internal auditors, PricewaterhouseCoopers. They were asked to go through all the Tribunal’s internal controls and policy and procedures and to create a matrix to inform the Tribunal where the gaps were and these gaps were being addressed. There was a claims policy for part-time Tribunal members in place and this policy had been reviewed as part of the continuous improvement process.
Ms Jodi Scholtz, Group Chief Operations Officer, DTI, said the allegations the Department received came nine months after the establishment of the Companies Tribunal. The Minister received these allegations on 20 May 2013 and on 26 May 2013 he had asked that a preliminary investigation be conducted to look into the issues. The investigation was conducted and the recommendations had been addressed. An internal audit committee had been established and the DTI’s audit committee also looked at the report. The Minister then appointed a full time Tribunal member in July 2013 to look at the operations of the Companies Tribunal because other Tribunal members had focused mainly on the adjudication of cases. The DTI’s internal audit unit also conducted a financial health check at the Companies Tribunal. In terms of the Public Finance Management Act (PFMA), chairpersons were accounting authorities in their own right and they reported. The Minister had convened all the audit committee chairpersons of all the entities on governance and internal control matters. The DTI was relooking its governance framework in terms of entities and the Committee could give input on the framework.
Ms Zodwa Ntuli, Deputy Director-General: Consumer and Corporate Regulations Division, DTI, said as people would get to know the Companies Tribunal as a platform to raise issues and resolve disputes, some of those vacancies would eventually have to be filled. There were a lot of workshops and seminars and the workload would definite increase down the line.
Adv Lebala said the DTI supplied the Companies Tribunal with the internal audit functions. Initially when the complaints in the forensic report surfaced it was about the buildings and as the forensic audit progressed it also surfaced that the allegations claimed that the chairperson of the Companies Tribunal was using petty cash to buy lunch for himself. The Minister represented one of the best performing departments of this government and the notion that the Minister would tolerate corrupt people was implausible.
The Chairperson said as government, the Committee had a responsibility to question and ensure accountability.
Mr Hill-Lewis said the report made it clear that on 29 January and 12 February 2014, Grant Thornton had appointments with AdvLebala which was not honoured. He then asked for a list of dates AdvLebala would be available for interviews and that list was never sent. A list was then sent to AdvLebala with 20 questions that referred to specific instances of over claiming and there had been no response to those questions. It was clear in the report that AdvLebala did not cooperate with this investigation. On 27 March there was a claim for R7 000 for a 15 minute meeting and he asked how that could possibly be justified. There was R75 000 claimed for travel expenses and many of those travels were on Sundays, but the Tribunal did not work on Sundays. There was also a claim for four days that amounted to R28 000, but it was for one day’s work on 4 June 2013. The Department’s decision to close this investigation was inexplicable. It was difficult to believe that AdvLebala still had his integrity intact. Nobody forced AdvLebala to apply to be the chairperson of the Companies Tribunal and nobody was stopping him to go and make more money in his private practice. It was well known that AdvLebala was a wealthy man because he claimed R10 million in fees from the Seriti Commission. If it was truly about public service, there should not be over claiming. As the chairperson of the Companies Tribunal, it was the responsibility of Adv Lebalato ensure that the mechanisms of good governance were put in place. He stated that he did not agree with the responses that had been given and did not agree that AdvLebala had his integrity intact.
The Chairperson said, as per her understanding, AdvLebala was paid a daily rate, irrespective of the hours. She asked whether policies had been developed around some of the matters raised today.
Adv Lebala replied that he had never received 20 questions and all the questions put to him had been answered. He put on record that since beginning working at the Companies Tribunal until toward the end of last year there had been no claims made for travelling costs. During the forensic investigation no question was asked about fees and only asked about the petty cash which was puzzling in itself. It was habitual to detail meetings and activities, but there was no obligation to give an account of meetings. He clarified that he did not claim R10 million from the Seriti Commission and noted that the advocate in charge of a commission convened by the DA probably charged 10 times the amount and yet there was no investigation launched into that.
Ms Scholtz said an internal audit committee had been established and the DTI’s audit committee also looked at the petty cash and fees allegations. A full time Tribunal member had been appointed to focus on the operations of the Companies Tribunal and the DTI’s internal audit unit also conducted a financial health check. The fee policy had been reviewed and clarified and a number of policies had been implemented since these allegations.
The Chairperson stated that a letter, dated 21 April 2015 had been received from the Director-General that related to the matter of the Companies Tribunal and this letter would be distributed to Members. It talked to matters that have already been referred to like the internal audit and basically talked to Public Finance Management Act (PFMA) guidelines the Companies Tribunal employed. Several operational policies had been implemented recently, including a policy governing fees and in due course Members would also receive the audit report.
Mr Kalako said he was satisfied with the report from the Companies Tribunal. Members who still wanted to pursue this matter should pursue it on an individual basis or within their political party.
Prof Msimang said regrettable he was not a regular on the Committee and was therefore not present when this particular matter had been tabled, but he stated he was satisfied with the responses given today.
Mr Hill-Lewis said the DA would continue to pursue this matter. He further stated that he was not satisfied with the response and argued that any reasonable South African would agree that charging R7 000 for a 15 minute meeting was unethical even if it was not technically illegal. The DA was also pursuing AdvLebala for his charges in the Seriti Commission, but it was a separate matter.
The Chairperson reminded the Companies Tribunal to send all outstanding documentation to the Committee Secretary.
AdvLebala said he reconsidered his position and he was not sending the record of his fees to Mr Hill-Lewis and he put it on record that he had no obligation to do so and anyone wanting to find the fees could do so. He said he was taken aback, but he was certain that the Seriti Commission allegations would “die its own death” as would these allegations in time.
Mr Macpherson said it was often seen that a commitment was made to do something and then withdrawn at the last minute and it was most unfortunate. It was a habitual manner in which AdvLebala operated. Section 55 of the Constitution empowered the Committee to hold the national government and its organs of state accountable. He reminded Members that an oath had been taken that required the Committee to maintain oversight and what was done today was not oversight. The Committee allowed itself to be subjected to ‘wishy-washy answers and half-truths’ which was not in line with the Constitution.
The Chairperson said Mr Macpherson was making some very serious allegations that people had lied to the Committee and she asked that he explained what was meant by “half-truths”.
Mr Macpherson said there were very serious allegations in the forensic report and answers had been given that the Committee did not believe to be true.
Mr Mkongi strongly objected and said the ANC would not be told by the DA on how to think. It was Mr Macpherson’s opinion what the position of the Committee was and if MrMapherson thought this was not oversight or if he was not satisfied, he should follow it up. The Seriti Commission and its processes had no business in this Committee and the DA should not, in their attempt to raise issues, involve the ANC as an organisation. If the DA wanted to pursue individuals and destroy black people, it would not be supported, because it was not the agenda of the ANC.
Ms Mantashe said the allegations that what was done today was not oversight, should be put on record as incorrect and as an opinion of the DA. The ANC was the majority party and would not be told by a minority party what to do.
The Chairperson asked Mr Macpherson to desist from the lack of respect for colleagues for walking out while someone was speaking.
Mr Williams said it should be made very clear that Mr Macpherson stated his own opinion and not the opinion of the majority of this Committee. The questions were asked and answered to satisfaction by AdvLebala without it even being on the agenda and the matter was closed.
The Chairperson said the comments made were solely the opinion of Mr Macpherson and Mr Hill-Lewis had every right to pursue matters in his own capacity. The Committee would continue to monitor the Companies Tribunal, because the entity had a huge task and was really a pioneer in the alternative conflict resolution forum that would grow top take on more specialist issues to resolve issues constructively. It was vital that the governance of the Companies Tribunal was effective and that the integrity of systems was protected. She thanked everyone for their input and asked the Committee to continue to work together to achieve accountability.
The meeting was adjourned.