Minister of Transport Dipuo Peters refused to listen to the advice of the Passenger Rail Agency of South Africa (Prasa) board and insisted that Collins Letsoalo be appointed acting group chief executive officer (AGCEO).
When he was eventually appointed -– after numerous attempts by the board to dissuade the minister of her choice -– he refused to account to the board because of an "instruction" issued by the minister "which created the impression that the board was accountable to him".
And when information came to light about Letsoalo's machinations to secure himself a 350% pay hike, the board fired him, disregarding Peters' request that his contract be extended.
The only reason he was sent there was to stop the investigations into fraud and corruption at Prasa.Popo Molefe
This is alleged in an explosive and detailed 15-page letter and explanatory memorandum board chairperson Popo Molefe sent to Peters on Friday, 3 March 2017, less than a week before he and the rest of the board were fired. The documents relay the unfolding of events "from the board's perspective."
Letsoalo and the board recently came to blows after it emerged he gave himself the enormous pay hike, less than a month after he was appointed.
The letter and memorandum alleges Peters was determined to parachute Letsoalo into Prasa and, once there, describes how serious she was to keep him there, seemingly delaying the appointment of a permanent chief executive by 10 months. It's also scathing of Letsoalo, who seemed bent on scoring as much as he could from his deployment.
"The only reason he was sent there was to stop the investigations into fraud and corruption at Prasa," Molefe told The Huffington Post South Africa on Wednesday night.
Molefe and his colleagues will on Thursday consult with legal counsel before challenging Peters' decision. Forensic investigations have so far revealed irregular contracts worth almost R13-billion awarded to various suppliers and service providers.
The view of the board had been communicated to the minister several times and the minister appears not to have been convinced by this view.Molefe, in his letter and memorandum to Dipuo Peters
According to Molefe's letter, of which HuffPost has a copy, Peters told the board at a meeting on 30 June 2016 that the then-AGCEO, Nathi Kena (who was appointed after Lucky Montana was fired a year before), should be replaced by Letsoalo, who was the chief financial officer in Peters' department.
The board argued Prasa could only be stabilised by the appointment of a permanent GCEO according to a process already underway: "The view of the board had been communicated to the minister several times and the minister appears not to have been convinced by this view."
Letsoalo -– who was specifically briefed to stabilise the organisation ahead of the appointment of a permanent GCEO and to help prepare a turnaround strategy -– immediately started to focus on upping his salary, according to reports. When a senior Prasa official refused, Letsoalo removed him from his position and replaced him with an official that was shifted from that same position previously.
Letsoalo was intent on being paid what the erstwhile GCEO earned and was not prepared to subject this to any discussion with the board.Molefe
She then facilitated the salary increase which, according to Molefe, amounted to R5 986 140,07 annually, or R498 845 per month, and "falsely" informed the department of transport the board had approved the increase. Molefe told Peters: "Letsoalo was intent on being paid what the erstwhile GCEO earned and was not prepared to subject this to any discussion with the board."
Molefe details how he and the board explained to Letsoalo, upon his appointment, the specifics of his temporary role, what they expected, what the details of the secondment from the department of transport entailed and how his remuneration was to be determined.
This misunderstanding is caused by an instruction that was given to Letsoalo by the minister . . this instruction was unfortunate as it created the impression that the board was accountable to Letsoalo.Molefe
This seemingly did not make an impression on Letsoalo, according to Molefe, who said Letsoalo "lacked knowledge or regard for governance principles."
Molefe wrote to Peters: "We believe there may have been a misunderstanding that Letsoalo may have been labouring under regarding his role in relation to the board. This misunderstanding is caused by an instruction that was given to Letsoalo by the minister for him to ensure that the board adhered to good corporate governance. This instruction was unfortunate as it created the impression that the board was accountable to Letsoalo."
After a legal opinion from the law firm Bowman Gilfillan that there were grounds for suspension, investigation and possible disciplinary action, the board decided to terminate Letsoalo's sevices: "At its meeting in 24 February 2017, the board decided not to assent to the minister's proposal for the acting appointment of Letsoalo to be extended . . ."
Molefe argues that there is evidence that Letsoalo's secondment might be null and void because proper procedures between Peters' department and Prasa wasn't followed and that there is no formal agreement in place, as per civil service regulations.
Peters said in a statement late on Wednesday the issue "could have been avoided".