Suspended manager costs bankrupt metro a fortune
A bankrupt Limpopo municipality has spent nearly R2m on the salary of a suspended manager because the municipality’s legal team had not been able to crack the case for nearly two years.
According to a report in The Citizen, the manager, Minah Maredi, was suspended in November 2018 for allegedly wrongfully investing R40m into the now defunct VBS Mutual Bank.
The investment was later found by the council to be illegal and against the prescripts of the Municipal Finance Management Act.
It was also found to have been against warnings from the National Treasury, which cautioned municipalities not to invest municipal funds into a mutual bank.
Maredi and the municipality’s CFO George Mapheto were given a letter of intention to suspend by the municipality during a special council sitting in November 2018. Their responses were forwarded to council that month and the matter was deferred.
Later that month, the council resolved to put Maredi and Mapheto on precautionary suspension.
They were suspended with full pay, but Maredi later challenged the suspension.
The application was later dismissed with costs by the Labour Court. Mapheto allegedly resigned soon after the suspension.
Maredi was appointed as Elias Motsoaledi mayor in 2012. She has allegedly been receiving an annual salary package of about R1.4m a year, excluding bonuses.
It is understood that since her suspension, the legal team on the case invoiced the municipality R1.1m for November 2019 to March 2020.
© Juta and Company (Pty) Ltd 2016
Article disclaimer: Juta expressly reserves the right, in its sole and absolute discretion, to alter or amend any criteria or information set out in this article without notice. Accordingly, any information, including journalistic articles, are not intended to constitute legal, financial, accounting, tax, investment, consulting or other professional advice or services. Before making any decision or taking any action based on the information contained in this article, which decision or action might affect your personal finances or business, you should consult a qualified professional advisor.