Seven directors were removed as members of the Board of the North West Transport Investments (NTI) at a general shareholders meeting held in Mahikeng on Wednesday.
The decisive action taken by North West Provincial Executive Council (Exco) convened as a general shareholders meeting in terms of Section 61 of the companies Act, No.71 of 2008 was chaired by Premier Thandi Modise. The provincial government holds 100% of the issued share capital of NTI.
The resolve to remove the directors was taken on the recommendation of the MEC for Public Works, Roads and Transport, Raymond Elisha after establishing that the Directors were incorrectly appointed by the Executive Authority at the time contrary and had appointed directors to each of the subsidiary companies, North West Star and Attridgeville Bus Service, especially with regard to the term of office. Some of these Directors are found to have been appointed by the Interim Executive Chair, ultra vires his powers.
According to report tabled by MEC Elisha, the appointment of the directors were contrary and beyond the ambit of the provisions contained in the Department of Public Enterprise Protocol on Corporate Governance in the Public Sector dated September 2002, more particularly the provisions contained in paragraph 18.104.22.168 and 22.214.171.124. thereof. Over and above that, Elisha had also established that the board had allegedly:
Breached Treasury Regulation 29.2.1. in that they failed to conclude a shareholder compact for the year preceding March 2011.
Breached their fiduciary duties in respect of compliance with the provisions of Section 50 of the Public finance Management Act.No.1 of 1999 for failing to keep full and proper record of the company in respect of the financial affairs and invest property of Section 55(1)(a) and(b) of the Public Finance Management Act (PFMA).
Failed to implement a system of properly evaluating the Company’s major capital projects with regards to payments of the amount of R110,208,218.00 and not disclosing this payment as irregular and expenditure in the annual financial statements for 2010/11.
Failed to hold an Annual General Meeting for the year 2011.
Failed to review the remuneration policy for the Board of Directors of the Company in 2010 and 2011 and, table the said remuneration policy for approval by the Executive Authority.
Failed to submit annual financial statements of the Company for the year 2012 to the Treasury of the Department of Public Works, Roads and Transport, within two months after the end of the financial year of the Company as contemplated in Section 55(1) (c)(ii) of the PFMA.
A forensic audit firm is in the process of investigating financial irregularities that were identified by the 2010/11 qualified Auditor General’s report.
The removal of the Board of Directors Board is in line with Premier Modise’s administration’s commitment to clean governance aimed at ridding provincial government departments, municipalities and state owned enterprises of the scourge of corruption and maladministration targeted to achieve clean audits by 2014.
New Directors appointed by the general shareholders meeting to oversee the affairs of NTI are Mohamed Iqbal Motala, Paschallis Thapelo Makhetha, Machii Esther Dladla and Jeanne-Marie Brown.