To: All Editors & Journalists
MEDIA STATEMENT
Issued by: National Health Laboratory Service (NHLS) Board Chairperson, Prof Eric Buch Date: 17 September 2024
NHLS WELCOMES JUDGEMENT AGAINST THEIR FORMER CEO, JOYCE MOGALE
Johannesburg: The Labour court has dismissed an unfair dismissal claim against the former NHLS CEO Joyce Mogale and her co-applicant, the (estate of the late) former CFO Sikhumbuzo Zulu. In addition, it has ordered that Ms Mogale pay ~R22 million rands to the NHLS for losses it incurred as a result of her conduct. The judgment is a victory for governance and the recoups losses which the NHLS has suffered as a result of the conduct of its most senior employees.
Judge Connie Prinsloo of the Labour Court adjudged the pair’s dismissal as fair and used these words to describe their conduct: “displayed severe negligence and incompetence … dismally failed to carry out explicit Board resolutions; and … blatantly disregarded the limitations contained in the delegation of authority.” In her judgement, delivered on 13 September, Judge Prinsloo stated: “They breached the lawful, reasonable and fair instructions of their employer and they failed to exercise due diligence and care.” The Judge referred to Mogale’s conduct as “astonishing”. Judge Prinsloo further stated that “Mogale was unable to acknowledge her role in creating her own misery – she was constantly shifting the blame, even onto the media”.
The NHLS Board became aware of irregularities in February 2017 and Mogale and Zulu were promptly suspended and subsequently dismissed in May 2019 after a disciplinary hearing. The presiding officer, Advocate Nazeer Cassim SC, expressed views analogous to Judge Prinsloo. He stated that “Their conduct is symptomatic of the grand scale looting and thievery in our country” and “People of their ilk … are on the lookout to enrich themselves. They plunged their employer into serious financial prejudice.” The Chairperson of the Board, Professor Eric Buch said: “Indeed, at the time of their suspension the NHLS debt to its suppliers was in excess of R800 million, which outstripped its paltry cash balance. Since then, a diligent effort has steadily turned the NHLS around. The NHLS now has substantial reserves and its staff have received reasonable annual increases, while annual tariff increases have remained below 5%”.
The dismissals of Mogale and Zulu, affirmed by Judge Prinsloo, were based on 3 separate, irregular commercial contracts at the NHLS. In the Afrirent vehicle leasing irregularity, Mogale approved a contract for ~R72 million without Board , way above the limit of her authority and then upped the contract even further to ~R79 million without any due process. She signed a Service Level Agreement with an unwarranted penalty clause which ballooned the cost even further. The Afrirent irregularities led to a judgement that Mogale has to pay back ~R22 million to the NHLS.
In the Blue Future contract IT equipment irregularity, the NHLS Board authorized a procurement of ~R25million. Mogale then, without competitive tender, summarily procured for R83 million (not the approved R25 million) and mostly for goods that had nothing to do with the tender.
In the DV8 wide area network irregularity, Mogale signed a R63,5 million addendum to the contract without tendering and with no specifications of the goods to be purchased, leaving this wide open for malfeasance.
In sum, Judge Prinsloo found that Mogale’s conduct was in violation of the Public Finance Management Act, the NHLS Supply Chain Management Policy and her contract of employment. Buch said “This judgement is salient as it provides further evidence of the probity and diligence of the Board and its efforts to hold those responsible to account, however long it takes”.
Mogale and former Head of Supply Chain Management Graham Motsepe; Manager Contracts and Tender Compliance Mthunzi Mthimkulu, Legal Manager Sibusiso Mthenjane and the owner of Blue Future, Pierre Petersen are all on trial in the Palm Ridge Magistrates Court on the Blue Future matter, consequent on charges laid by the NHLS Board in 2017. Buch said he is still optimistic that those responsible will also be charged on the Afrirent and DV8 matters. The Owner of Blue Future, Pierre Pretorius has already been found guilty of fraud in his tender submission to the NHLS and is awaiting sentencing.
END
For more information and media inquiries, please contact: Mr Mzi Gcukumana
NHLS Head of Communication Mobile: 066 376 3171
Email: mzimasi.gcukumana@nhls.ac.za