The first witness, Prof Bongani Khumalo, former SABC board member, described a number of corporate governance problems he observed at SABC and these included failure to observe the differentiation between board and executive functions and thus poor management of boundaries between the board and the executive. There were dynamics that brought about tension or hostility between the board and the executive. The board chairperson is the leader of the board and of governance and the chief executive officer is the leader of management and it is important for these parties to work together for good order in the organisation but this was not always the case at the SABC.
Prof Khumalo described Mr Hlaudi Motsoeneng as smart, a mover and shaker but he had no respect for governance. Mr Motsoeneng believes he can manipulate anybody and if a person differed from him, he would warn that the person “had an agenda”. One challenge was the board’s inexperience and inadequate training. There was also the challenge of poor and diminished ethics and criminal motives. He recommended that there must be training of boards and shareholder representatives. The shareholder must not be accessed by the staff. Board members are interviewed and recommended by a structure of Parliament and there greater stringency is needed in these appointments. His decision to resign from SABC was precipitated by the letter he received from Minister Muthambi asking for reasons why she should not recommend to the President for him to be removed from the board. He described this as strange because previously the Minister had appealed to him to stay, saying:"Please, Prof, we must make it work with the SABC this time".
Members asked if there was there a change in Mr Motsoeneng’s behaviour when Minister Muthambi was appointed. They requested clarity about the character of the Minister: is this a minister who made her own decisions or was she influenced as it seemed the Minister did not make the decisions. There is another agenda at work here, it shows a dysfunctional ministry. Members highlighted that the role of Parliament is to hold the Minister accountable.
The next witness, Mr Madoda Shushu, former Executive Head of Procurement, presented his statement. He joined SABC in April 2013 after a rigorous interview with the Board, and his last day was in October 2016, after his suspension. He was essentially responsible for providing strategic planning on supply chain activities at SABC and recording maladministration, irregular expenditure, fraud and corruption and abuse of power. He detailed how he had raised great concerns about transactions being done without the involvement of the procurement division. When you acquire goods and services, multidisciplinary teams should be involved in the process. Some contracts did not reach his desk, those that did, did not fulfil procurement obligations but payments had been made. He gave examples of a number of large transactions that had not been legal. He realised there was hidden agenda. He escalated his concerns to internal audit and later to the Auditor-General and National Treasury. He was suspended. What triggered his resignation was he was advised by his lawyer that the exercise of trying to revoke his initial suspension was likely to drag on for a long time as there were new charges that were coming through.
Members asked if the R43 million acquisition of the studio was outside the procurement process. They requested the name of the company that was irregularly awarded the contract for the acquisition of the studio. They asked about the relationship between the COO and the GCEO before he became an acting CFO of the SABC; if there were any other transactions of a substantial amount undertaken beside the ones already mentioned that clearly flouted corporate governance principles; was Mr Shushu involved in the contract between SABC and ANN7; what was the value of the contract for SekelaXabiso; what was the relationship like between Mr Aguma and Mr Motsoeneng and did they back each other; did he think his procurement division became a hindrance to people who wanted do contracts that would be in breach of the PFMA. The Committee requested that it be provided with a list of these irregular transactions in writing.
Ms Theresa Geldenhuys, former SABC Company Secretary, was questioned on her integrity, morality and ability to carry out her functions in terms of the Broadcasting Act and the Companies Act. She was corrected in her thinking that the Companies Act took precedence over the Broadcasting Act in relation to the SABC. Before testifying, the Committee criticised her role as part of the delegation that had walked out of the Committee meeting on 7 December 2016. Ms Geldenhuys apologised but stated that she did so because the SABC chairperson felt his constitutional rights were not being protected. A Committee member did not view this as an apology.
Several members raised concern at the manner in which the board meeting notice was given for the meeting where the permanent appointment of Mr Hlaudi Motsoeneng as COO took place. Ms Geldenhuys was questioned on whether she ever advised the board as to the legal repercussions of their actions during meetings. Ms Geldenhuys may claim that she was bullied at meetings but she still had email at her disposal through which she could have advised the board, even if it was after the fact. Although she conceded to being aware that the process of appointment of Mr Motsoeneng due to a letter from his attorney was procedurally incorrect, she did not provide advice to the board but denied that she had done anything wrong as she had not participated in flouting policies. Ms Geldenhuys, although claiming she had been bullied, denied that Mr Motsoeneng bullied her, alleging that it was non-executive board members, such as Mr Krish Naidoo and Mr Nomvuyo Mhlakaza, who had bullied her.
Ms Geldenhuys was quizzed on her involvement in the investigations of board members, such as Mr Krish Naidoo. She replied that the Minister had requested a report on the behaviour of board members and that she had reported on the lack of attendance and lack of cooperation amongst board members, but that it was never an investigation. The Chairperson was unimpressed, and reminded Ms Geldenhuys that she was under oath and accountable to the Board in terms of the Companies Act, and not the Minister. Ms Geldenhuys conceded that she was 100% browbeaten by former SABC Board chairperson, Ms Ellen Tshabalala. MPs asked which faction of the board Ms Geldenhuys belonged to, to which she responded that she was an independent person.
The Chairperson reprimanded the SABC about its large delegation stating that the Committee never wanted to see this happen again on taxpayers’ money and classified it as fruitless and wasteful expenditure.
The SABC board chairperson, Prof Mbulaheni Maguvhe, appeared and was questioned on his attempts to prevent or delay the parliamentary inquiry ranging from his interdict application, the refusal to provide documents, and his walk-out from the 7 December meeting. He was asked who he thought was funding his legal costs and who had made decision to consult outside lawyers to act on behalf of the board when the board did not have a quorum to effect such a decision. He was asked about the flouting of the ICASA ruling on the SABC protest policy, the non-quorate appointment of Ms Bessie Tugwana as acting COO; whether he voted for the appointment of Mr Motsoeneng as permanent COO; about ignoring the remedial action of the Public Protector and ignoring colleagues’ warnings against the contravening of policy and about blurring the lines between the executive and the board. He was asked if he considered the money spent by the SABC to be from the public purse; if he guided senior executives to think that they do not account to the people of SA; and about his relationship with Mr Motsoeneng. He was told that the witnesses before the Committee complained that they had been let down by the SABC, the Minister and the Board, most of whom were fired, others of whom were suspended unlawfully. He was asked about procurement placed into the hands of Mr Motsoeneng, leading to R100 million being spent without following proper procurement process.
Prof Bongani Khumalo: former SABC Board member
The Chairperson announced that the first witness would be Prof Bongani Khumalo, former SABC Board member. He informed Prof Khumalo that he is required by law to answer all the questions lawfully put to him fully and satisfactorily. Additionally, he is required to produce any requested documents in connection with the subject matter of the inquiry, notwithstanding the fact that the answer or document could incriminate him or expose him to criminal or civil proceedings or damages. However, he is protected in that evidence given under oath or affirmation before a House or before the committee may not be used against him in any court or place outside of Parliament except in criminal proceedings concerning a charge of perjury or charge relating to the evidence or documents required in these proceedings.
Prof Khumalo agreed to take oath and did so accordingly.
The Chairperson handed over to Adv Nthuthuzelo Vanara, Evidence Leader for the Inquiry.
Adv Vanara: Good morning to everyone and Prof Khumalo. You have prepared a statement dating back to 12 December 2016 and that statement is nine pages long. It is clear that with your permission that statement is provided to the Members of the Committee. Are your fine with this?
Prof Bongani Khumalo: I’m fine, Sir.
Adv Vanara: Can you please explain to the Committee when did you get involved as a non-executive director to the SABC board? How long did it last before you left?
Prof Khumalo: I was grateful for the opportunity to serve as a board member at SABC. I started in October 2013 and I came all the way until the first week of January 2015. So I served for little over a year and left the board about two years ago.
Adv Vanara: At the time when Ms Ellen Tshabalala would have been the Board chairperson, is that correct?
Prof Khumalo: Yes, that is correct Sir; I was under the leadership of Ms Tshabalala.
Adv Vanara: The Group Chief Executive Officer at the time would have been Ms Mokhobo, is that right?
Prof Khumulo: Yes, that is correct.
Adv Vanara: At the bottom of the first page of your statement to the top of page 2, you share with the Committee your experience and background in governance related matters. Can you take the Committee through the process?
Prof Khumalo: I state that I am a very experienced businessperson and I have served on a number of boards for many years in large corporations including public enterprises. I have worked as an Executive in certain large South African public enterprise portfolios. I was at one stage Chairman of Transnet. I ventured into the private sector where I was a managing director of a property company. I put this in my statement as it is important for one to bring into focus the differentiation of functions or protocols of governance in companies and in this case I would look at public enterprises. There are points that I make about the different role players in the governance of State Owned Enterprises (SOEs). The Board has the responsibility to supervise management and supervise the Executive and form a link between the shareholder representative and the Executive. The Board is the one that receives presentations on strategies and strategic analysis and strategic proposals to be approved as well as the budget or financial plan of the organisation. The responsibility of the Executive is to manage and I am pointing out the importance of having come up the ranks of corporates and having experienced being a corporate manager, executive director and non-executive director.
Adv Vanara: Informed by this wealth of experience, in page 3 of your statement, you point to certain concerns about what you had observed at the SABC. Can you take the Committee through these concerns?
Prof Khumalo: I will go through them one by one and they start with failure to observe the differentiation of functions and therefore poor management of boundaries between the board and the executive. I state that the board should oversee and supervise the organisation and the executive should implement the board’s mandates to manage the organisation and operationalise the strategies. I state that there existed an anomaly because of the hostility or tension in terms of the relationship between the board and the executive. As we go down, we will look at the dynamics that brought about this tension or hostility between the board and the executive. There is a need to realise that the chairman of the board is the leader of the board and governance and the chief executive officer is the leader of management. It is important for these parties to work together for good order in the organisation but this was not always the case at the SABC.
Adv Vanara: The board’s support of the CEO or management team is critical, can you share with the Committee you own experience and observations during your tenure at SABC? Did you think the Board supported the Group CEO as well as the management at the time?
Prof Khumalo: We started with great enthusiasm, good combination of skills, knowledge and experience to stabilise the organisation. However, the cracks started to emerge as Group CEO, Ms Mokhobo, was not well supported. She went around as a persona non grata of the organisation. Ms Mokhobo frightened me, even though professional, she looked like she could drop dead anytime, and was a bundle of nerves. It became clear that Ms Mokhobo had her power and scope usurped by the acting COO. It was a lopsided relationship where power was with the COO. The Board works through its chairperson and some approached the chairperson and made an effort to improve relations. It reached a point where Ms Mokhobo felt she was let down and no longer wanted to stay. We had vigorous discussions; the intention was to implement the remedial directives of the Public Protector. But these meetings ended in acrimony, even though the majority had agreed on implementation. The Human Resources board committee failed to reach agreement on the Public Protector remedial actions.
Mr Ronnie Lubisi and Mr Vuso Mavuso were in agreement with me, but when we took it to the board for discussion, it split the Board. There were many special board meetings hastily arranged. Ms Tshabalala addressed us, made reference to there being a concern on the part of the Minister and Minister’s concern was expressed at the Magaliesberg meeting. It baffled us, why this meeting took place immediately. We needed documentation to motivate why the Board should deal with this. The Board did not have appetite to deal with the matter, it was split. There was a view that due process was not being followed and strictly speaking that was the decision of the board. However, the majority of the board then took that particular decision to appoint him. The belief was that this matter should not be served to the board at all and it was clear that due process had not been followed; it was out of order. If Mr Motsoeneng aspired for the position, he had to apply and qualify. Prof Khumalo said he voted against it.
There was as serious debate around digital migration policy and this was regarded as one of the heftiest issues. There were big struggles between the board and Minister of Communications, Mr Yunus Carrim. MultiChoice was thrown around in the accusations. Mr Carrim felt we treated him with suspicion. Minister Carrim offered to take a lie detector test three times to prove his intention. There were insinuations that came from certain board members, Minister Carrim’s position ended before this matter was resolved.
On Minister Muthambi’s remarks about the COO appointment, such a call raises eyebrows if it is isolated like it was. What stood out is the Minister’s focus on Motsoeneng. Members of the board failed to uphold SABC policy, process was not followed. It was clear that whatever the role of the Minister, it was incumbent on the Board to follow policy.
Adv Vanara: Please take the Committee through the letter that was sent by the Minister.
Prof Khumalo: There was a letter from the Minister asking for reasons why she should not recommend to the President my removal from the board. It was strange because of a previous talk with the Minister, saying:"Please Prof we must make it work with SABC this time". I was called to the Minister to talk about SABC, saying she wants to remedy the challenges at SABC. I told the Minister about my intention to resign; Ms Muthambi said to me “don’t go, stay, if you leave, things will fall apart” and the Minister even gave me her cell phone number. I told the Minister that I will do everything to make her term a success. When I received the letter over the December holiday period, I was shocked cold. I tried to call her, she did not answer. I called the adviser to the Minister who said he didn't believe it; the Minister wants to fix things. I never got an answer but the advisor encouraged me not to resign. I resigned and my resignation was precipitated by the Minister’s behaviour.
Ms J Kilian (ANC): Was there a change in Mr Motsoeneng’s behaviour when the new Minister came in?
Prof Khumalo: You could call him a Type A personality gone wrong. He is smart, a mover and shaker but he has no respect for governance. Mr Motsoeneng gets confidence from himself; he believes he can manipulate anybody. He responds when you put your foot down. When allowed leeway, he behaves in this way. He believes he is supported. One challenge that was easily identified at SABC was that of the board’s inexperience and inadequate training. There was a challenge of poor and diminished ethics and criminal motives, these are some of the things responsible for the weakness in board. Your reputation is one of your strongest assets. I went in with confidence and commitment, but was disappointed and Ms Mokhobo needed help to deal with the personalities.
Ms P Van Damme (DA): How did Mr Motsoeneng flaunt his personal power?
Prof Khumalo: In a board meeting, he would warn people that they “had an agenda”, saying he can stand on his own. That is the kind of impunity you saw and Mr Motsoeneng never flaunted political power.
Adv Vanara: I am aware that you have made a number of recommendations to be taken into consideration going forward and how the Board should operate in the future.
Prof Khumalo: There must be training of boards and directors and shareholder representatives. The fact you have one board member means the question of the board’s fitness has already been answered.
The Chairperson commented that the Committee’s mandate is whether the board is fit and proper, but it is inescapable that we will talk about other actors.
Prof Khumalo: Mr Motsoeneng enjoyed the tolerance and support of the Board chairperson; he was not called to order. Ms Tshabalala’s lack of action was another reason that emboldened Mr Motsoeneng. Mr Motsoeneng does not care who he is talking to when he asserts himself. Mr Motsoeneng will tell you that he is not scared of you. I do not think you will see a change in him. As long as a person is not a director, they should not take part in board processes. We had a weakened Group Chief Executive who ended up going; the HR head was disempowered. We pleaded with the chairperson to resolve this matter. It was clear that the board had failed to discharge its duties, but this is the process that occurred, The board lost its force as a board.
Dr M Khoza (ANC): Can you unpack the “criminal motives” that you spoke about?
Prof Khumalo: You have instruments to access documentation or to access another process that is empowered to come out with information. Issues such as MultiChoice, TNA are issues that rocked the organisation. Parliament has the power to follow this.
Mr S Swart (ACDP): Have you been threatened or intimidated?
Prof Khumalo: No.
Mr Swart: There is another agenda at work here, it shows a dysfunctional ministry. Our role is to hold the Minister accountable.
Prof Khumalo: The fact that someone becomes a minister does not mean that they know about companies etc
Mr J Mahlangu (ANC): Are you aware of how SABC journalists are complaining about how Parliament, the Board and the Minister failed them?
Prof Khumalo: The exodus of staff at SABC; that is when the situation got to its worst and it will only be cured if people are in place. The vetting of staff happens at a different level, there was nobody who we appointed who was not vetted.
Mr F Mokoena (EFF): Help me understand the character of the Minister. Is this a minister who made the decision or who was influenced? It seems like the Minister did not make the decision. Is it a recommendation that came from the Minister?
Prof Khumalo: It did seem strange, a manipulated process.
Mr Mokoena: The Minister was not in control of the SABC; she got instructions from the COO, is that so?
Prof Khumalo: The letter bore what was purported to be the Minister’s signature. The real tussle for power was with the COO; people who challenged him were not visible. A conscious role player will not let them steer out of their bounds. The shareholder must not be accessed by the staff. Board members are interviewed, assessed and recommended by a structure of Parliament and we need to look at the stringency of these appointments.
The Chairperson: Does resignation absolve you from liability according to the Companies Act?
Prof Khumalo: If things happened when you are not there, you can’t be responsible; but if you resign to run away that is different.
The Chairperson: Thank you for your time, Professor, the Committee will call you if needed.
Prof Khumalo: Pleasure.
Mr Madoda Shushu: former Executive Head of Procurement
The Chairperson informed the next witness Mr Shushu that he is required to answer all the questions lawfully put to him fully and satisfactorily. Additionally, that he is to produce any documents that he is required to produce in connection with the subject matter of the inquiry, notwithstanding the fact that answer or document could incriminate him or expose him to criminal or civil proceedings or damages. However, he is protected in that evidence given under oath or affirmation before a House or before the committee may not be used against him in any court or place outside Parliament except in criminal proceedings concerning a charge of perjury or charge relating to the evidence or documents required in these proceedings.
Mr Shushu agreed to take oath and did so accordingly.
The Chairperson handed over to Adv Vanara.
Adv Vanara: When did you join the SABC?
Mr Shushu: I joined the SABC in April 2013 after a rigorous interview with the Board; my last day was in October 2016, after suspension. I was responsible for providing strategic planning on supply chain activities at the SABC and recording maladministration, irregular expenditure, fraud and corruption and abuse of power.
Adv Vanara: I know you raised issue with transactions that were done without the involvement of the procurement division.
Mr Shushu: I have raised great concerns pertaining to transactions done without the procurement division’s involvement. When you acquire goods and services, there should be multidisciplinary teams that are involved in the process. Some contracts didn’t reach my desk, those that did, did not fulfil procurement obligations but payments had been made. I was called in due to the process for the acquisition of an HR service provider. A formal process was being followed, but the procurement division was directed to cancel it. What concerned me is another vendor was brought in to run the whole process; we picked up an irregular payment.
Adv Vanara: Was it the decision of the Board to embark on this recruitment process?
Mr Shushu: There are instances where a service provider was brought in to assist revenue stream collection. The same organisation benefited from other streams. The company initially identified for procurement was cancelled. The company that was appointed was LornaVision. HR services was awarded to Talent Afrika.
Adv Vanara: Is Talent Afrika the one that HR and the procurement division identified?
Mr Shushu: It is the one that was awarded the business.
Adv Vanara: What were the circumstances surrounding the procurement of the services of LornaVision?
Mr Shushu: LornaVision came as a pilot request for deviation, which happens in cases of reasonable doubt. LornaVision was pitched to assist the organisation in rooting out pirate viewers, bringing in revenue. I realised there was hidden agenda. I escalated it to internal audit and I took it up with the Auditor-General and National Treasury. The R43 million acquisition of the studio was irregularly awarded without my knowledge. The COO announcement said utilising procurement services is a waste of time. In relation to the SekelaXabiso procurement, the Chief Financial Officer cited the need for urgency in dealing with the irregular expenditure. There was a resolution to change the structure of reporting, I asked the HR chair, but he denied it. The Xabiso transaction pertained to audit services. The same company presented proposals but was not awarded
The Chairperson: You will recall the SABC said that it cannot release documents to this Committee due to the negative effects on the SABC’s commercial interests. A law firm sent a letter to Parliament, indicating the SABC would not release certain documents to Parliament, thus denying it access to reports.
Mr Shushu: The GCEO realised there were hundreds of transactions worth R100 million that flouted the Public Finance Management Act (PFMA). The current GCEO was engaged in the contract. Without having permission, there was an increase in the contract value. The SekelaXabiso contract was valued at R5 million approximately, they received extensions to try and resolve audit issues. Mr James Aguma signed off on the contract and there are elements of conflict of interest. I know there was an acquisition deal with MultiChoice for the SABC archives.
Mr Nkwankwa: Can you tell us about the relationship between the COO and the GCEO before he became the acting CFO of the SABC? Are there any other transactions of substantial amounts undertaken beside the ones already mentioned that clearly flouted corporate governance principles, particularly the PFMA?
Mr Shushu: My understanding is that the current GCEO was brought in by the COO to assist his office pertaining to governance matters and he was later appointed as acting CFO. In my understanding, he worked at the office of the COO prior to being promoted to other roles. Another example of an unauthorised transaction was the GCEO engaged on a contract without being authorised to do so. What worried me is that there was an increase in the contract value by 17%. The contract was for R8.2 million but the payment ended up being R10 million.
Mr Mokoena: You say the acquisition of the studio was R43 million and it was done outside the procurement process, is that correct?
Mr Shushu: Indeed.
Mr Mokoena: Which company was awarded the contract?
Mr Shushu: The company that was irregularly awarded the contract was Vision View.
Mr Mokoena: Who signed off the contract? Who gave instruction for this contract to happen?
Mr Shushu: If my mind serves me well, it was the Group Executive for Television, Ms Verona Duwarkah, who signed the contract. I am not sure about her current role at the moment. I am not sure who gave instruction for this contract to happen but this was discussed in one of the meetings. I would like to make the Committee aware that there are checks and balances to be done before the awarding of a tender. This goes even to the extent of checking the status of the company directors, and this was not done in the awarding of the contract for the studio.
Mr Mokoena: What was the value of the contract for SekelaXabiso?
Mr Shushu: I am not sure of the total value of the contract but I remember the first was R5 million and to my knowledge they got three extensions to try and resolve the audit issues. The sign-off for the contract was the CFO, Mr James Aguma.
Mr Mokoena: According to company law, these are legally chargeable cases?
Mr Shushu: Indeed. It was quite clear that the studio was acquired illegally and I expected the Executive Director to act promptly in stopping the whole process or deal with it decisively.
Mr Mahlangu: Do you know of the relationship that occurred between the SABC and ANN7?
Mr Shushu: No, I was not involved at that level but I know that there was a deal between the SABC and MultiChoice about the archives.
Mr Mahlangu: So your section was not involved in that?
Mr Shushu: No, I was not involved in those kinds of transactions as some of the executives were kept out on those kinds of sensitive transactions.
Mr Mahlangu: Is you section not supposed to be involved in those kinds of transactions?
Mr Shushu: I presume that I should be part of that process but I was kept out of the process.
Mr Swart: Do you think your division became a hindrance to people who wanted do contracts, leading to breach of the PFMA? The AG had already highlighted lack of adherence to procurement processes to the list of transactions that had been done. It was unclear if the “flood of transactions" that you referred to were exactly R100 million or in the region of R100 million. Would it be possible for the Committee to be provided with a list of these irregular transactions in writing? Can you give us more information on the person who was appointed for a six-week period? Who was this person? In relation to the 17% increase in a contract, can you take the Committee through what really happened and whether you had experienced something like this before?
Mr Shushu: Indeed, that was the case. I am one of those who took a stand; any irregularities I dealt with them decisively. A flood of irregularities came after the Vision View approval. It was R100 million of irregularities although the figures should have increased by now. I could certainly provide the Committee with the list of irregular transactions. The name of the lady was Ms Ayanda Mkhize. The 17% was an unauthorised transaction and this was done by the CFO, Mr Aguma.
Dr Khoza: I would like to acknowledge the fact that you were holding a very difficult position especially when confronted with such governance failure. You came at SABC in 2013, right?
Mr Shushu: Yes.
Dr Khoza: And during that time irregular expenditure was put at close to R3.4 billion by the AG and the following year it went down drastically to about R400 million.
Mr Shushu: My understanding, I think I must highlight that we had a very extensive exercise that we initiated in leadership in trying to deal with the problem of irregular expenditure and that process did not necessarily yielded positive results.
Dr Khoza: I wanted to say that some of the statements that you had made are collaborated by the AG, is that correct?
Mr Shushu: Indeed.
Dr Khoza: The issue of Human Resources, that you were suspended, was this part of the purge against you?
Mr Shushu: I would like to make it clear that I dealt decisively with any irregular expenditure that came to my desk, so I presume that this was indeed purging. What was even worse was that two of my GMs were suspended and both of them took the matter to the CCMA. One of the GMs won the case against the SABC. SABC was instructed to pay him an amount of R170 000 for his suspension.
Dr Khoza: Who replaced you? What are the credentials of that person?
Mr Shushu: The person who replaced me was within the division of the COO.
Ms Loliwe: What triggered your decision to resign?
Mr Shushu: I got advice from my lawyer that the exercise of trying to revoke my initial suspension was likely to drag on for a long time as there were new charges that were coming through.
Ms Van Damme: The day before Mr Matlala was due to be interviewed, he was suspended. Did the investigation go ahead? It would indeed be very important for the Committee to be provided with the list of those irregular transactions.
Mr Shushu: Mr Matlala assigned the Chief Internal Audit to investigate internally the irregular expenditure. I was served with the letter of the intention to suspend me three days after Mr Matlala was suspended and a week later I was suspended. As I alluded earlier, the matter was further escalated to Treasury.
Ms Van Damme: What was the relationship between Mr Aguma and Mr Motsoeneng? Did they back each other?
Mr Shushu: I don’t know how to put this but what I am sure about is that Mr Aguma reported to the COO and I presume that they surely had a good relationship.
Mr Chauke: What we are dealing with is corruption, maladministration and looting of resources at SABC. What did you do after you tendered your resignation?
Mr Shushu: As I said earlier, the matters were escalated to the AG and Treasury.
Mr Chauke: What was the response that was received then? Could you be specific about the levels of the AG and Treasury where these matters were handled?
Mr Shushu: It went to the Senior Management.
Mr Chauke: Could you provide us with the names of the Senior Management in order to do a follow up?
Mr Shushu: It was long time ago but I could provide the Committee with the names of the individuals in writing.
Ms Kilian: It was clear that those who wanted compliance at SABC were gradually being sidelined or purged. Have you considered laying a charge as per PFMA?
Mr Shushu: I must clarify that there was a mutual separation between myself and the SABC and this was not just a resignation. I have never contemplated laying charges taking into account that these were escalated to Section 9 of the Constitution (AG and National Treasury). It is worrying to see that one’s photograph is still in the SABC Annual Report and clearly one does not want to be part of that or to be associated with such a poor performance record and irregular expenditure.
The Chairperson: You have indicated to us that the National Treasury was looking into the matter of irregular expenditure at SABC and my assumption is that the internal audits at Treasury would report to the Audit Committee of SABC and be taken to the Board. There is a document that we requested from the Board and they say this document was “sensitive” and this document has not come to Parliament.
Mr Shushu: I am not aware why those documents should not be coming to Parliament.
The Chairperson: Mr Shushu, thank you very much, your session has ended and we will not hesitate to call you whenever there is a need to appear before this inquiry.
Mr Shushu: Thank you.
Ms Theresa Geldenhuys: SABC Group Company Secretary
The Chairperson assisted Ms Theresa Geldenhuys with taking the prescribed oath.
The Chairperson noted the fact that Ms Geldenhuys was present at the previous Committee meeting on 7 December 2016, and that Ms Geldenhuys participated in a walk-out of the sitting of the meeting, which was unprecedented in a democratic South Africa. The Chairperson requested comment on her conduct to which she responded with an apology ‘if she offended any of the Committee members’ stating that she was supporting Prof Maguvhe who felt that his constitutional rights were not being protected.
Adv Vanara drew attention to the unsigned statement received by Ms Geldenhuys.
Evidence leader, Adv Vanara: What is the role of the Company Secretary?
Ms Geldenhuys: My role is to provide guidance, and be the interaction between the board and management.
Throughout each of the meetings at the SABC, I have given guidance to the board which was not accepted. I nevertheless attempted to do my job to the best of my ability with integrity.
Adv Vanara: There was a special board meeting convened for the appointment of the COO, what role did you play in the organizing of the meeting?
Ms Geldenhuys: I was informed by Ms Tshabalala, who was the chairman at the time that she needs to call board members for an urgent meeting. Notice was sent through SMS because there was very short notice to convene at 7pm the same evening. When inquiring about the agenda, I was informed that the agenda comprised of two matters: (i) the Public Protector’s report and the (ii) matter concerning the COO. No further information was given as to what ‘matters relating to the COO’ was when I asked Ms Tshabalala.
Adv Vanara: One of your roles was to provide guidance, but there were issues of process relating to HR non-compliance?
Ms Geldenhuys: Appointing executive members does not go through the normal HR process. The role of advertising stands, but the board does the appointment. It is a board procedure.
Adv Vanara: In terms of SABC policies, there has to be advertisement of the position and a recruitment process. When you saw the board going astray in terms of the process, did you advise them?
Ms Geldenhuys: I was not given an opportunity to give advice as Ms Tshabalala went straight into the appointment.
Adv Vanara: Are members of the board ordinarily deprived of other members’ wisdom and insight when a round robin decision is taken?
Ms Geldenhuys: It would depend on the particular circumstances. The majority of the round robin decisions took place where the board meeting was not quorate. Members would discuss the matter at the meeting but the decision would be taken by round robin afterwards because the quorum was not met.
Adv Vanara: Did you advise the board to increase the quorum needed for a round robin.
Ms Geldenhuys: The quorum was set by shareholder in the Memorandum of Incorporation (MOI).
Adv Vanara: When the SABC chairperson refused to furnish documents requested by this Committee, what advice did you give him? Why did you not make contact with the Committee up until summons was served? Adv Vanara was of the impression that her role was to advise the chairperson, which she should have done.
Ms Geldenhuys: The SABC chairperson’s refusal was based on legal advice which he had received. I did not have the place to do so as things are done through the chairperson.
Adv Vanara: The MOI gave away certain powers of the board to the executive directors. Was this a good governance strategy?
Ms Geldenhuys: I cannot say why this was done as this was done by the shareholder. Our role was to ensure that the documents complied with the statutory requirements and there was a safeguard in terms of clause G5 and G6 stating that all appointments are subject to HR appointments, budget approval and discipline which must be in line with policies of HR.
Adv Vanara: In the subsequent amendment of the MOI, there was purging of senior executives.
Ms Geldenhuys: Those were outside of the board matters which I dealt with.
Adv Vanara: Did the purging of executives concern you?
Ms Geldenhuys requested a reversion of the question.
The Chairperson interjected stating that all questions must be answered.
Ms Geldenhuys: I heard about them leaving after they had left and I did not participate in such removal.
Adv Vanara: The circumstances of the removal of some of the executives were in the media.
Ms Geldenhuys: I am not part of the communication area and this is not part of the Company Secretary duty.
Adv Vanara: The article in the newspaper that an executive has left the service of the SABC – have you ever read something to this effect?
Ms Geldenhuys: I had seen the resignation of the eight executives on television. The reasons for and how they left were attributed to the protest policy of the SABC. This does not fall into my role of the Company Secretary and I could not advise the board on it.
Adv Vanara: How was the Public Protector’s Report handled by the board?
Ms Geldenhuys: The board took a decision to split the Report to the various board committees and its chairs – HR, social and ethics and audit committees. The deputy chairperson at the time formed the committee of chairs and reported to the board on the recommendations. There was a bit of conflict as people had different courses of action.
Adv Vanara: Were you aware that there was an interim report?
Ms Geldenhuys: This did not come through to the Company Secretary.
Adv Vanara: I asked you a question as to how you took the resignation of the senior executives and you wanted a reversion or wanted to remain quiet on the question, until the chairperson intervened. What is it that you are unable to tell the Committee?
Ms Geldenhuys: It is not my place to tell how or why people are leaving the SABC and I cannot be the judge of that.
Ms F Loliwe (ANC) wanted to know if Ms Geldenhuys respects Parliament, and if so, why she decided to miss the deadline on the required documents.
Ms Geldenhuys replied that she does respect Parliament, but that the deadline issue was related to the legal opinion received to hold onto the documents until the Committee was reconstituted.
Ms Loliwe pointed out that Ms Geldenhuys has indicated that she has been a Company Secretary for 26 years. In those years, would you be the champion of freedom of speech?
Ms Geldenhuys replied that there is a way in which one can express oneself without being above everything else and in the process, lowering someone else’s esteem.
Ms Loliwe referred to the last sentence in paragraph 5 of her statement which states: ‘these utterances have not deterred me and I continued to provide the necessary guidance’. If you were providing guidance, where were you when the board was subjected to incorrect appointment procedures and flouting of policies?
Ms Geldenhuys replied that she did not play any role in the flouting of policies. All processes were followed. There are processes below the authority of the board.
Ms Loliwe wanted to know if Ms Geldenhuys was implying that with the permanent appointment of the COO, all procedures was followed.
Ms Geldenhuys replied that she is not implying that all procedures were followed. She agreed that there should have been a proper process followed. She repeated that the meeting was convened without documents presented to the board.
Ms Loliwe noted that Ms Geldenhuys was quick to mention Mr Krish Naidoo in her statements but omitted the name of another board member, referred to as ‘another board member’. Who is this person?
Ms Geldenhuys stated that her reasons for mentioning Mr Naidoo was that he came before the Committee and made utterances in the Committee. The other person did not appear before the Committee, but I can provide you with a name.
Ms Loliwe asked if Ms Geldenhuys was targeting Mr Naidoo.
Ms Geldenhuys stated that this was not her intention.
Ms Loliwe said Ms Geldenhuys has alluded to the fact that her role was to advise the board. Even with the meetings she has spoken about, she cannot say it was a constitutional meeting.
Ms Geldenhuys stated that in the constitution of the board, there is no valid board but additional members can be added to meet the quorum.
Ms P Van Damme (DA) stated that in terms of the SABC charter, the Company Secretary is central to guidance and advice on matters of business ethics and governance. You are required to have full knowledge of legislation and policies governing the SABC. The Broadcasting Act governs the SABC and requires a quorum of nine members, including a chair or deputy chair. The Act does not allow the board to appoint members around the Corporation and place them on the board.
Ms Geldenhuys replied that there can be members appointed to the board in terms of non-executive directors.
Ms Van Damme stated that this appointment is made by Parliament. In your statement, you state that from the 1 October, you have been appointed as General Executive of Governance and Assurance. It is common knowledge that the board ceased to be quorate on the 22 September as confirmed by the
Western Cape High Court, therefore, your appointment was unlawful.
Ms Geldenhuys replied that her appointment was made at a board meeting on 19 August where a fully quorate meeting was held. The fact that I had signed by contract in October, was subsequent to the decision made.
Ms Van Damme disagreed and wanted to know who signed the contract on behalf of the SABC.
Ms Geldenhuys responded that it was the CFO.
Ms Van Damme inquired into the ownership held jointly by Ms Geldenhuys and Ms Motsoeneng called Rugby Broadcasting, and whether Ms Geldenhuys was a director of the Company.
Ms Geldenhuys stated that she is not a director of this company and that it is a dormant company of the SABC and that she, along with Mr Motsoeneng, have been struggling for three years to deregister the company with the approval of the Minister of Communications.
Ms Van Damme emphasised that the company is listed as a private company and that Ms Geldenhuys and Mr Motsoeneng are listed as directors of the company.
Ms Geldenhuys insisted that it was a subsidiary of the SABC and incorporated in accordance with the Public Finance Management Act (PFMA). Deregistration has been submitted three times already.
Ms Van Damme wanted to know what the role of the company was.
Ms Geldenhuys stated that the intention was for the broadcasting of sports.
Ms Van Damme stated that in Ms Geldenhuys’ apology to the Committee she stated that ‘if I offended Parliament’ which Ms Van Damme did not consider an apology. Ms Van Damme was disturbed by the number of people present who formed the SABC delegation. She wanted to know what their purpose was and who was paying for their presence.
Ms Geldenhuys stated that their attendance was for the purpose of answering any questions which Parliament may have.
Ms Van Damme stated that they have not been summoned before Parliament.
Mr H Chauke (ANC) wanted to know how the statement submitted by Ms Geldenhuys was compiled.
Ms Geldenhuys replied that she had written it herself to address any allegations against her.
Mr Chauke asked what Ms Geldenhuys understood by the role of Parliament.
Ms Geldenhuys replied that it was to hold government accountable.
Mr Chauke wanted to know which part of the faction of the board members Ms Geldenhuys belonged to.
Ms Geldenhuys stated that she was independent from the board.
Mr Chauke asked if Ms Geldenhuys was aware of any corruption in the board and what processes she had followed.
Ms Geldenhuys replied that she did not follow all processes.
Mr Chauke was displeased with this, stating that she picks which process to follow. He asked if Ms Geldenhuys has resigned.
Ms Geldenhuys replied that she has resigned already and is waiting for deregistration of Rugby Broadcasting.
In response to Mr Chauke asking when Ms Geldenhuys was retiring, she said that she had already reached retirement age, but that she is on a short term contract.
Ms J Kilian (ANC) commented that malicious compliance was unacceptable. The Committee has received 400 documents in improper order, without titles, on the previous Saturday, in preparation for the Committee meetings. This is further contempt of Parliament.
Ms Geldenhuys responded that she had expressed there were hundreds of documents and asked whether there was something specific which the Committee was looking for. A covering email was sent to show what had and had not been submitted.
Ms Kilian commented that when giving advice to the board whilst relying on the Companies Act, the shareholder has an absolute right to documentation. This is a national public broadcaster and Parliament has every right to request these documents. The Committee takes a dim view of an attorney who tells Parliament what it is entitled to. In terms of the Companies Act, the duties of the Company Secretary are stated as giving guidance to the board as to their duties and making the directors aware of any law relevant to or affecting the company. Can you tell the Committee what you have done when three board members were irregularly removed, not only by non-executive directors which is against the Broadcasting Act, but voted on by executive directors with a direct interest in their removal. What was your advice to the board on this occasion?
The Chairperson interjected and said the Committee wanted to know by whom she was advised to do a review.
Ms Geldenhuys replied that it was not a review or investigation. The Minister asked for a report on the behaviour of the board members. All that was submitted was the lack of cooperation between board members and lack of attendance.
Ms Kilian asked why the document was not provided to those board members she had reported on.
Ms Geldenhuys replied that it was the Minister’s document and that she had no right to disclose it.
The Chairperson reminded Ms Geldenhuys that she was under oath and stated that in terms of the Companies Act, the Company Secretary is accountable to the board, not to the Minister. You have said that the Minister requested a report about your principal to whom you are accountable.
Ms Geldenhuys said that she did not go to the Minister. The board chairperson had received a request from the Minister and the chair had submitted it to the Minister.
Ms Kilian referred to a continuation meeting which started quorate and proceeded on the 9th and 12th and ended on the 26th March. In your testimony before the Committee, you seem to be Pontius Pilate – an innocent coordinator of the board meetings – but you have a specific duty in terms of the Companies Act. Where did you get the information that the Companies Act trumps the Broadcasting Act?
Ms Geldenhuys responded that she got this information from the Companies Act itself. Where there is a conflict between different legislation, the Companies Act takes precedence. The Companies Act does not include the Broadcasting Act. We have been advised that the Acts can be read together.
Ms Kilian disagreed stating that as tabled in Parliament, the Broadcasting Act applied to the SABC and that the Companies Act only applies in so far as the Broadcasting Act is silent or does not elaborate on a specific provision such as the role of the Company Secretary.
Mr J Mahlangu (ANC) commented that the statement by Ms Geldenhuys is a response to allegations heard in this Committee. [Ms Geldenhuys agreed]. Mr Mahlangu remarked that therefore it was not a statement of her role at the SABC but rather a response to the matters raised within the Committee inquiry. Who asked you to respond to the Committee inquiry?
Ms Geldenhuys stated that she was interviewed by Advocate Vanara and asked to provide a statement.
Mr Mahlangu wanted to know if Ms Geldenhuys knew she was not supposed to write a response to the Committee inquiry. You were invited here. When a witness has concluded his written statement, we ask persons who are implicated to speak, not to write a response. This was very irresponsible. What does accountability mean to you?
Ms Geldenhuys responded that it is ensuring compliance.
Mr Mahlangu asked how Ms Geldenhuys accounted for the walking out of a Parliamentary Committee meeting.
Ms Geldenhuys replied that Prof Maguvhe felt that his rights were being infringed.
Mr Mahlangu asked if Ms Geldenhuys was aware that Prof Maguvhe was the last person and not the first person to leave the House.
Ms Geldenhuys replied that she walked out after the chairperson.
Mr Mahlangu asked if she was aware that Prof Maguvhe was not leading the delegation who walked out. You followed the chair but who started it? Who decided to interdict this process?
Ms Geldenhuys replied that it was Prof Maguvhe acting on the authority of his counsel.
Mr Mahlangu asked from where the authority was derived. All the wrong advice had been given to Prof Maguvhe and it is something she must bear personally. How long has this delegation been in Cape Town? They have not been invited.
Ms Geldenhuys stated that she did not know how long the delegation had been in Cape Town but that she had been in Cape Town for the past week.
Mr Mahlangu asked if she was on holiday in Cape Town.
Ms Geldenhuys replied that she was not on holiday but preparing documents for the Committee.
In reply to Mr Mahlangu asking where Prof Maguvhe was, Ms Geldenhuys said that he had gone back to Johannesburg.
Mr Mahlangu asked who took the decision not to supply us with the documents.
Ms Geldenhuys stated it was on the advice of counsel to the chairperson.
Mr Mahlangu asked if Ms Geldenhuys should not advise the chairperson.
The Chairperson asked who the firm of attorneys was.
Ms Geldenhuys replied Thekisho Attorneys.
Mr Swarts commented that when a Company Secretary calls a meeting, a notice is sent out.
Ms Geldenhuys commented that the board had waived the required notice.
Mr Swarts asked if meetings were often called without notice. Meetings called by SMS were not correct. Members alleged that they were not aware of what the meeting was about. Mr Swarts asked if the contents of the statement were discussed with anyone else. Give us the name of everyone at this meeting at your convenience after the meeting. Are these the same members who walked out last week?
Ms Geldenhuys could not answer whether those members had walked out.
Mr Swarts stated that the board relied on a letter from a law firm recommending Mr Motsoeneng for the position of COO. Who wrote the letter?
Ms Geldenhuys replied that she did not know who wrote the letter.
Mr Swarts drew attention to the fact that this was not part of legislation and there had been no advertising of the vacancy and that he was sure, as a company secretary, Ms Geldenhuys had objected to this.
Ms Geldenhuys stated that had she known that the process would not be followed in the meeting that she would have advised Ms Tshabalala accordingly.
Mr Swarts interjected, stating that as the meeting had unfolded, surely Ms Geldenhuys should have objected to issues contrary to legislation or policy.
Ms Geldenhuys stated that the only thing she could do was point out the incorrect process.
Mr Swarts proceeded to read the statement of Mr Bongani Khumalo: ‘SABC has a good company secretary’. But, that ‘Ms Theresa Geldenhuys’ authority was undermined and disabled’.
While Ms Geldenhuys agreed, Mr Swarts reminded her that this does not detract from the fact that she still held an obligation. And, therefore, she was not doing her job correctly. He asked if she agreed with this statement to a ‘degree’ and to what degree: 50%?
Ms Geldenhuys stated that under the previous chairperson, she would say 100%, but that now it is the board members who prevent her from speaking.
Mr Swarts interjected stating that she was thereby unable to comply with her statutory duties but got promoted to a senior position anyway.
Ms Geldenhuys disagreed that she was unable to comply with her duties. Regardless of the fact that she was told not to talk, she continued to provide the necessary advice.
Mr Swarts asked if Ms Geldenhuys was bullied by the board and wanted to know who specifically had done so and asked if Mr Motsoeneng bullied her.
Ms Geldenhuys replied that Mr Motsoeneng did not bully her but that Mr Naidoo and other board members did. Mr Naidoo had on several occasions told her ‘keep quiet, don’t talk’ but yet he comes back to say that she did not give the advice she was supposed to give. The other member was Ms Nomvuyo Mhlakaza.
Dr Khoza commended Ms Geldenhuys on her academic accomplishments and particularly recognised that she holds an international award on corporate governance cum laude through University of Johannesburg. Dr Khoza asked the following series of closed-ended questions:
Dr Khoza: Is there a deficit between your moral conscience and your academic accolades?
Ms Geldenhuys: No
Dr Khoza: Are you honest?
Ms Geldenhuys: I try my best to be.
Dr Khoza: Would you classify yourself as a victim?
Ms Geldenhuys: I will not allow myself to be a victim.
Dr Khoza: Would you consider yourself to have integrity?
Ms Geldenhuys: Absolutely.
Dr Khoza: In your moral compass, where do you locate moral principles? In the peripheral or at the core?
Ms Geldenhuys: At the core.
Dr Khoza: As a company secretary, you are a chief administrating officer? Is that correct?
Ms Geldenhuys: Yes
Dr Khoza: And your key role is to advise the board and its members? Is that correct?
Ms Geldenhuys: Yes that is correct.
Dr Khoza: Would you say that under these accolades, and working at the SABC, that governance failed in every respect possible?
Ms Geldenhuys: No, I will not concede to this.
Dr Khoza: In your view, employing a top executive without accreditation, the exodus of skills at the SABC – is that a normal occurrence?
Ms Geldenhuys: No.
Dr Khoza: Do you think that the opinion is consistent with corporate governance?
Ms Geldenhuys: In terms of corporate governance, there is a difference between governance and failure in terms of the operation.
Dr Khoza: But, you agreed that your role is to advise the chair and advise the board?
Ms Geldenhuys: Yes.
Dr Khoza: Under your watch, ma’am, staff members were purged, some of them lost income to a point where their families are suffering. Are you happy with this record as a fundi of corporate governance?
Ms Geldenhuys: I am not the authority who purged people.
Dr Khoza: Ma’am, you said you are not a victim. When your executives exercised their choice [to leave], they decided they could not take it anymore. You decided to leave but you came back and received a promotion.
Ms Geldenhuys: Please may I correct you. I did not resign this week. I resigned at the time when Ms Tshabalala was the chairperson.
Dr Khoza: And you stayed on from that time?
Ms Geldenhuys: Yes, I did.
Dr Khoza: On page 1, paragraph 4, you say that ‘although not alone, the standards of corporate and commercial law, the Companies Act and Income Tax Act, amongst other legislation are requirements of my appointment. This has provided me with knowledge to deal with companies and relevant laws, with which they must comply, thus enabling me to provide accurate and reliable guidance to the board on which I have worked as a Company Secretary. I have 26 years’ experience, of which 18 years has been in the public sector State Owned Entities (SOEs). Ma’am, you are under oath, do you still stand by this statement?
Ms Geldenhuys: Yes.
Mr F Mokoena (EFF) asked if Ms Geldenhuys still had any business dealings with Mr Motsoeneng.
Ms Geldenhuys replied that she did not have any business dealings with Ms Motsoeneng.
Mr Mokoena wanted to know how she explained her dealings with Rugby Broadcasting.
Ms Geldenhuys replied that it is the subsidiary of the SABC.
Mr Mokoena asked who paid for Mr Motsoeneng to be in Cape Town.
Ms Geldenhuys stated that she did not know who paid for the stay.
Mr Mokoena stated that he was not satisfied that Ms Geldenhuys is the Company Secretary, and et when things go wrong, that there is no response from her.
Ms Geldenhuys replied that she can provide guidance to the board but she cannot tell the board what to do.
Mr Mokoena asked if Ms Geldenhuys was at the meeting. [She answered in the affirmative]. Mr Mokoena asked when Ms Geldenhuys saw any legal misgivings whether she had given any advice.
Ms Geldenhuys reiterated that she was bullied and therefore, unable to do so.
Mr Mokoena asked if she had email or any other medium at her disposal to write to the board and advise them, because how will the Committee even know she advised on anything? Mr Mokoena asked if Ms Geldenhuys had advised the board on the Public Protector Report and that appointing Mr Motsoeneng as permanent COO was against the Public Protector Report. And neither could you write to the board afterward?
Ms Geldenhuys replied that her integrity was compromised and she chose not to be part of the proceedings.
Mr Mokoena asked if on the 18 November 2015, at a meeting at which a board member was dismissed, was she present?
Mr Geldenhuys confirmed that she was present.
Mr Mokoena commented that Mr Motsoeneng and Mr Jimi Matthews were present at the meeting. But, Ms Geldenhuys stated that she does not know whether Mr Motsoeneng was there. Mr Mokoena stated that assuming that Mr Matthews was at the meeting as the acting CEO (who was subject in the hierarchy to the person being dismissed) as being able to vote for the dismissal? Ms Geldenhuys replied that when a person is appointed in the capacity as acting; they have the full powers of the position. Did you not see any conflict of interest?
Ms Geldenhuys stated that she did not see any conflict of interest because Mr Matthews was not appointed as permanent GCEO because such an appointment would be outside of the capacity. The board members’ dismissal has nothing to do with the appointment of Mr Matthews as the GCEO and that is why there was no conflict of interest.
Mr N Kwankwa (UDM) inquired into the irregular appointment of Mr Motsoeneng. He confirmed with Ms Geldenhuys that she stated that she was not given a chance to advise the board. As a company secretary, whether the advice is being sought or not, your duty is to give advice anyway, even afterward.
Ms Geldenhuys replied that she had mentioned about the process that has been followed. When you are shut down all the time as to what the procedure is, I made the decision to resign. An undertaken was given that the process would be improved in order to listen to me, in persuading me to come back.
Mr Kwankwa stated that Ms Geldenhuys did not answer accurately. First you said that you did not give advice. Then you said that you gave advice but it was not accepted. Those are completely different things. Secondly, once the MOI was amended regarding the power to appoint and discipline staff, and the negative effect of this became apparent, what advice did you provide to the board? Did you sit back, keep quiet and allow things to roll?
Ms Geldenhuys replied that the MOI was a document which she had to ensure compliance with. She did not have authority to instruct the Minister on what to do.
Mr Kwankwa asked on what basis Ms Geldenhuys was promoted.
Ms Geldenhuys replied that she was not promoted but it was rather a straight sideline appointment.
Mr Kwankwa stated that if she was not satisfactorily doing her job as Company Secretary, she was subsequently promoted.
The Chairperson stated that one of the primary roles of the Company Secretary is to organize board meetings on the instruction of the chair. The chairperson requested that you organize a board meeting and all you have told this Committee is that it related to the COO. Do you think it is the proper thing to do give a notice titled ‘COO’? How do you expect members to have prepared properly.
Ms Geldenhuys repeated that she called the meeting as urgent and when asking Ms Tshabalala what the meeting was about, she received no response.
The Chairperson requested that she accept in hindsight that things could be done differently.
Ms Geldenhuys accepted this.
The Chairperson stated that at the meeting the COO was appointed against the grain of the policies and legislation governing the SABC. Did you not feel you needed to advise the board that what they are doing is wrong? So when the board jumped over the cliff, you jumped over the cliff with them. Up to this day, you have done nothing?
Ms Geldenhuys replied that the Committee Chairperson is unable to judge her unless he stepped into her shoes.
The Chairperson strongly disagreed stating that ‘if the law says you must do X, you cannot say that because you were bullied by Y, you chose not to do what you were supposed to’. You cannot tell me that unless I am on the other side I cannot state the position. ‘You are the Company Secretary, one of your responsibilities is to provide the board with guidance on relevant legislation’. Section 50(c) of the PFMA says that the board must on request provide all materials, facts and documents to the Minister and Parliament. ‘You are the Company Secretary and I expect you to understand the law’. The legal advisor to the board tells you not to comply with Parliament, essentially ‘you are advised to break the law’ but ‘you come to us and tell us you were brow-beaten’.
Ms Geldenhuys replied that an interdict application was made and the board was waiting for the outcome of the interdict, stating that ‘according to my knowledge, you would have to wait for the outcome…’
At this point, the Chairperson interjected asking when the court application was done, to which she agreed it had been completed. The Chairperson emphasised the inconsistency asking, ‘so you are telling us there was still a court case going on?’ I am reminding you that you are speaking under oath.
Ms Geldenhuys replied that there was an appeal pending, to which the Chairperson responded that she does not know the outcome of the appeal so why withhold the documents.
An irate Chairperson was at pains to say that the letter was sent to the Committee refusing the documents and he reminded Ms Geldenhuys that ‘if you don’t know your facts, it is better you keep quiet, than to say something that you will regret’. The Chairperson proceeded to read the letter from Lucky Thekisho Attorneys: ‘The following documents will not be provided…’ This provision is against the law.
The Chairperson said that part of the Broadcasting Act states that the board must establish and maintain libraries. When the SABC sold the library to MultiChoice, did you not advise them they are breaking the law?
Ms Geldenhuys responded that the libraries were not sold, but the use of the archive materials is what MultiChoice receives. The Chairperson stated that channel 161 on DSTV is economic exclusion.
Ms Geldenhuys replied that these are archived programmes which would not be broadcast on SABC 1, 2 and 3.
The Chairperson pressed to determine why DSTV would want material of no use to the SABC.
Ms Geldenhuys replied that the material is from the archives but money is given for airing it rather than selling it.
The Chairperson stated that it is agreed that there is no board, yet SABC is continuing its business. Money is being spent. People are working. On whose authority is the next cent going to be spent? Have you advised them that this has the potential of exposing the SABC?
Ms Geldenhuys replied that there is nothing that SABC can do until the board is quorate. We have a bigger problem as the acting authority of the CFO and the GCEO were expanded because there is no board.
Mr Kwankwa wanted to know if Ms Geldenhuys had informed any of her principals of the deteriorating situation at the SABC.
Dr Khoza said that she thinks that Ms Geldenhuys has betrayed what corporate governance is all about and that she is disappointed about Ms Geldenhuys stating that one of the witnesses is not trustworthy.
Mr Swarts referred to the ICASA ruling relating to the protest policy. Are you aware that there are criminal charges against the SABC for non-compliance with the ICASA ruling?
Mr Mahlangu stated that assuming that the SABC is a national key point, he would like to know if she has been vetted.
Ms Van Damme stated that one of the roles of the Company Secretary is to train incoming board members. Based on the current state of the board, have you carried out this duty properly and why should she not be dismissed immediately?
Ms Loliwe wanted to know who will benefit from the agreement between the SABC and MultiChoice.
Ms Kilian stated that the minutes of the irregular appointment of the COO do not show that Ms Geldenhuys had warned or guided the Committee.
Mr Chauke said that he struggled to find the truth in what was said by Ms Geldenhuys.
Ms Geldenhuys replied that she cannot understand why the Committee views her as dishonest. It is an unfair and inaccurate statement. She have not spoken to the GCO or acting GCEO on whether he has spoken to the Minister. She would like them to look at the entire SABC and see that there are various improvements that have been made. She believes that she has done her work with integrity. The SABC legal department deals with the ICASA ruling. Her vetting had been done by the employment agency through which she applied. She is open to being vetted and it is a requirement for her to be vetted anyway. Because of the employment contracts, there is a requirement to be vetted but unions are against it. Whenever an induction programme is arranged, she has been told to leave it until the new members have been appointed and there has been resistance against her providing induction. She cannot answer who benefits from the MultiChoice agreement. Every single thing is not added in the minutes.
The Chairperson noted that Ms Geldenhuys is transferring skills to her successor and was concerned about what was being taught to her successor. When the next board starts kicking against what the successor is advising, what is she doing to teach her successor what to do.
Ms Geldenhuys replied that Parliament should appoint proper directors – because who recommended the appointment of the directors?
The Chairperson stated that as Parliament it should acknowledge its mistakes.
The Chairperson irately stated that Parliament does not ever want to see a delegation as big as the one present, coming to sit in Parliament, not saying a word, at taxpayers’ expense. Parliament is not asking you, but telling you. This was fruitless and wasteful expenditure.
The Chairperson stated that at the press conference after the Committee meeting on 7 December 2016, a member of the SABC had referred to Parliament as ‘that kangaroo court’.
Mr Mohlolo Lephaka, SABC Group Executive: Human Resources, rose from his seat, admitting to making the statement. Mr Lephaka withdrew the statement and apologised after being requested to do so by the Chairperson.
Prof Mbulaheni Maguvhe: SABC Chairperson
The Chairperson assisted Prof Maguvhe to take the prescribed oath
Prof Maguvhe commented on the walk-out on 7 December 2016, saying he only received three days’ notice to appear before the Committee. The initial date was 7 December 2016 and later moved to the 14 December 2016. My legal team wanted me to address the Committee in relation to my concerns:
- that I will need legal representation.
- that I will be given documents and can cross examine witnesses and receive witness statements.
The legal team was unable to raise these pertinent issues and I had to walk out to consult. It was in no way disregarding Parliament. I felt that my rights as a visually impaired person were not respected by this House.
Evidence leader, Adv Vanara: You brought an interdict application to prevent this Committee from conducting the inquiry until the issues you raised were resolved. Is that correct?
Prof Maguvhe: The issues I have raised have not been resolved, according to me.
Adv Vanara: Can you share with the Committee whether legal proceedings were brought in your personal capacity, bearing the legal fees and costs, or will they be paid by the SABC?
Prof Maguvhe: This confuses me. My legal team wanted to know whether I am here in my personal capacity of as chairman of the board.
Adv Vanara: You instructed an attorney to bring an application; who in your mind was going to pay for those costs?
Prof Maguvhe: Until I attended the first sitting of this Committee on 7 December, I believed that it was SABC that would bear the cost. But, from what members of the Committee were saying, confused me.
Adv Vanara: I seem to be gathering that you were acting for the SABC. You are the sole remaining member of the board. You are not an executive chairperson of the board. You on your own do not have authority to take any binding decisions for the board. So, how could you conceive that you could instruct attorneys absent a board resolution?
Prof Maguvhe: The executive has the authority to take such decisions and I believe that they took such a decision.
Adv Vanara: So the executive took the decision on behalf of the board?
Prof Maguvhe: I did not take that decision. The notice that I received from this Committee clearly stated that I am entitled to legal representation.
Adv Vanara: On 7 December, you indicated that the walk-out was because documents were not given to you in Braille? [At this point, Prof Maguvhe agreed]. The ICASA ruling on the protest policy was against the SABC and the board and this document should have preoccupied your mind. That ruling came before you in Word format not Braille. So, how did you engage with those documents?
Prof Maguvhe: I engaged with those documents in Word format. For an exercise like this, I cannot be engaging in Word format and it is highly impossible for me to memorise everything. I would have preferred to get the presentations to extract information necessary for my response. Braille documents are bulky and therefore, I cannot expect everything.
Adv Vanara: Ms Bessie Tugwana was appointed as acting COO and was this on the recommendation of the board at the time?
Prof Maguvhe: Yes.
Adv Vanara: Was the board quorate that passed the resolution on her appointment?
Prof Maguvhe: Yes. All non-executive directors were present.
Adv Vanara: For quorum, you need nine members. Mr Mavuso declared that there was not a quorum when he participated in the meeting. Mr Naidoo said the same. How could you be quorate when the Broadcasting Act requires nine persons for a quorum?
Prof Maguvhe: What board members have said are recorded in the minutes and Prof Maguvhe hoped that the Company Secretary had recorded the minutes.
Adv Vanara: At the meeting on the 27 July 2014, when Ms Tshabalala was the chair, were you present and did you vote for the appointment of Mr Motsoeneng as COO?
Prof Maguvhe: I think I voted for, unless the minutes indicate to the contrary.
Adv Vanara: That decision of the board ignored the remedial action of the Public Protector, is that correct?
Prof Maguvhe agreed but qualified his concession by stating that most of the members were unaware of the binding nature of her recommendations. It was only after the constitutional ruling that the recommendations were binding.
Adv Vanara: That decision of the board had profound financial implications for the SABC. You were taken to the Western Cape High Court which declared the decision of appointment unlawful and irrational. Is that correct?
Prof Maguvhe agreed.
Adv Vanara: Part of the budget of the SABC is derived from taxpayers’ money?
Prof Maguvhe: I would differ on that.
Adv Vanara: There is evidence that your colleagues warned you against the decision of contravening the policy. Why did these concerns fall on deaf ears?
Prof Maguvhe: The arguments put forward by Ms Tshabalala convinced us that the COO was doing a sterling job and that is why I voted in favour.
Adv Vanara: Why should the persons who voted for him not be held personally liable for the losses at the SABC?
Prof Maguvhe: We took a majority decision which binds those who voted against the decision.
Adv Vanara: Mr Khumalo is quoted to have said the board was inexperienced, had inadequate training, ill-discipline, familiarity, it was misdirected, bad internal politics, poor business ethics and possible criminal motives. If this statement were to be true, it would be an indictment on the board.
Prof Maguvhe: That statement is not correct. I am not sure if he was referring to my leadership and it would help if he clarified to what period he was referring to. I would not be the right person to agree or disagree. Perhaps examples should have been given.
Adv Vanara asked if Prof Maguvhe wanted to hand in his statement to the Committee.
Prof Maguvhe stated that at his discretion he does not want to hand in the statement.
Mr Kwankwa noted that section 7 of the Broadcasting Act highlights the fact that the state is a 100% shareholder, so it belongs to the people of SA. If you look at the financials of the SABC, it might be true that the SABC does not get most of its funds from the taxpayer. By saying this, you are saying that you should not account to Parliament. But, you are an institution of the state, and when you derive income, even when you derive your funds from the commercial aspect of the company, the revenue belongs to the people of SA. Have you guided the senior executives to think that they are not to account to the people of SA?
Prof Maguvhe stated that he does not recall the executives saying that the money does not come from the state. All he knows is that 2% is grants and 13% is licence fees. He does not know about executives squandering money based on these beliefs.
Mr Kwankwa commented on the interdicting of the Committee’s process. Would you say that in the absence of a resolution of the board to approve your legal fees, that you have blurred the lines between the executive and the board?
Prof Maguvhe stated that he believed that the legal division of the SABC has given their legal advice as to how to deal with the matter.
Mr Kwankwa noted that the SABC had failed to comply with the ICASA ruling. Why has there been no compliance?
Prof Maguvhe stated that it was the first time he has heard that there has been no compliance. The SABC was instructed to withdraw the statement that it made on the protest policy. As far as he was concerned, it did withdraw. He relies on radio so he does not know.
Mr Mokoena asked what legislative mandate Prof Maguvhe relied on when Prof Maguvhe decided to do everything in his power not to allow the Committee to convene.
Prof Maguvhe responded that he relied on the Constitution.
Mr Mokoena noted the press conference statement made by Prof Maguvhe in which he was recorded as saying that he will not appear before the Committee until the Committee issues a summons. What legislation did you rely on?
Prof Maguvhe stated that he was unsure whether legislation needed to be relied on when appearing at a press conference. He relied on the fact that the citizens of the country have the right to freedom of speech.
Mr Mokoena noted that Prof Maguvhe acknowledges that it is fine as chairperson of the board to hand in the documents that Parliament requires. You relied on external advice that you should not hand in documents. On what legislation did you rely?
Prof Maguvhe felt that he needed to correct Mr Mokoena by saying that the letter he had received to appear before the Committee did not address him as the chairperson. When responding as a chairperson, it would be difficult to do so but it would be complicating what he has raised before.
Mr Mokoena wanted to know if as a chairperson he was advised by legal advisors that he should hand in documents requested by Parliament. However, Prof Maguvhe ignored this advice and sought legal advice external to the SABC, so what legislation did you rely on?
Prof Maguvhe stated that this question would be best suited to pose to his legal team.
At which point Mr Mokoena reminded him that he was asking the question to Prof Maguvhe and not his lawyers.
Prof Maguvhe said that he did not know that any legislation should be relied on because if you already know law, what is the use of seeking legal advice.
Mr Mokoena wanted to know what Prof Maguvhe’s relationship was with Mr Motsoeneng outside of the formal relationship at the SABC.
Prof Maguvhe responded that he had no relationship.
Mr Mokoena recalled that Prof Maguvhe stated that he did not know that the Public Protector remedial actions were binding, but he inquired if Prof Maguvhe had sought legal advice on the matter.
Prof Maguvhe responded that no advice was sought as it was the responsibility of Ms Tshabalala to seek advice and that at the time Prof Maguvhe became chairperson, Mr Motsoeneng was already COO.
Mr Mokoena stated that the DA had taken the SABC to court for the appointment and asked if Prof Maguvhe did not seek legal advice from the Company Secretary relating to the legality of the appointment.
Prof Maguvhe replied that if there was someone on the board who sought advice from her, that it was him. A presentation was done by the legal division.
Mr Mokoena confirmed whether Prof Maguvhe was implying that the Company Secretary had lied that she knew that the remedial action was binding.
Prof Maguvhe stated that he did not hear anything as stated by the Company Secretary. He could not remember if a resolution was passed about taking the Public Protector Report on review.
Mr Mahlangu wanted to know who the shareholders of the SABC are.
Prof Maguvhe replied that as far as he knew, it is the Minister of Communications who represents Parliament.
Mr Mahlangu disagreed that the Minister represents Parliament as the Minister represents the executive.
Mr Mahlangu wanted to know who the SABC money belonged to.
Prof Maguvhe replied that the money belongs to the state.
Mr Mahlangu asked what the state is.
Prof Maguvhe asserted that the state is represented by Parliament.
Mr Mahlangu emphasised that the money spent by the SABC is the public purse and the inability of Prof Maguvhe to answer the question adequately, explains the financial losses within the SABC. As Mr Mahlangu explained it, the SABC was under the impression that only 2% comes from the state so the SABC could do with the rest whatever it wished.
Mr Mahlangu mentioned that all witnesses before the Committee complained that they had been let down by the SABC, the Minister and the Board, most of whom were fired, others of whom were suspended unlawfully.
Prof Maguvhe stated that the SABC employs over 4000 employees and it is hard to know who has been hired and fired. Suffice to say that the journalists report to their managers and therefore, it would be the managers and their seniors who would know, but this was never brought to the board.
Mr Mahlangu was shocked that the board, and more specifically Prof Maguvhe, did not know that a senior journalist had been fired.
Mr Mahlangu asked if Prof Maguvhe knew about the ‘SABC 8’.
Prof Maguvhe replied that it would concern him where he has facts. This is an operational matter, not a board matter.
Mr Mahlangu wanted to know if Prof Maguvhe knew about the firing of board members and who was responsible for the dismissal.
Prof Maguvhe stated that he knew about the dismissal and that the board was responsible. Prof Maguvhe made an example of board member Ms Kalidass who would say that she has boarded the flight on her way to the meeting, but she never arrived or attended the meeting for an hour stating that she has an early flight, only to find out that she never took the flight back home. Mr Lubisi was listed as an auditor in three companies doing business with the SABC which was never declared. Mr Lubisi never declared that his daughter was an intern at the SABC.
Mr Mahlangu commented that the SABC is a national key point and that there are certain expectations for those who work at a national key point and that such persons should be vetted. Are members vetted?
Prof Maguvhe referred the Committee to HR to determine if vetting is done.
The Chairperson wanted to clarify if Prof Maguvhe had stated that it is the responsibility of HR to vet members. The Chairperson reminded Prof Maguvhe that the accounting authority is the board and it is the board that it is in charge of the affairs of the SABC. Parliament asks the accounting authority, who is the board.
Mr Swarts raised the changes to the procurement policy. Mr Swarts referred to Madodo Shushu, SABC Executive Head of Procurement, who gave evidence on disturbing changes such as payment without official commitment, payment without fulfilment, irregular contracts, potential leadership abuse, excluding procurement custodians.
Prof Maguvhe replied that he had no knowledge of this, stating that this was never brought to the board’s attention. The Finance Committee in the SABC never tabled something like this before the board.
Mr Swarts continued that the procurement was placed into the hands of Mr Motsoeneng, leading to R100 million being spent without following proper process. This should have been of great concern to you.