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Charge Deputy Finance Minister Sfiso Buthelezi, Treasury Investigation Concludes

The treasury investigated 216 Prasa contracts awarded between 2012 and 2015.

11/06/2017 10:41 SAST | Updated 11/06/2017 11:46 SAST
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Finance Deputy Minister Sfiso Buthelezi during a media conference on April 04, 2017 in Pretoria, South Africa.

"Crippling mismanagement and criminality" at Passenger Rail Agency of South Africa (Prasa) reached systemic proportions in the years current deputy finance minister Sfiso Buthelezi was the board chair, and for that he must must criminally charged, an investigation by the National Treasury has concluded.

The conclusion came after an investigation into 216 Prasa contracts awarded between 2012 and 2015, was conducted by forensic auditing firms, says a report by Daily Maverick.

"Out of 216 contracts with a combined value of about R19-billion, only 13 were found to be above board with no further recommendations made", said the report. Other recommendations and findings in the investigation include:

  • Buthelezi and his fellow board members must be criminally charged for contravening several sections of the Public Finance Management Act (PFMA) in the course of the awarding of at least 30 contracts - an offence that can lead to a hefty fine or up to five years in jail;
  • Prasa's record keeping is in shambles. Indications are that the most basic corporate functions have been left by the wayside - recommendations include that Prasa should conduct "proper needs analysis and market research before it procures goods and services";
  • Crucial and confidential documents were lost, stolen and destroyed, hampering an in-depth investigation, possibly concealing the culpability of Prasa's management.

Buthelezi was appointed as deputy finance minister in March this year after the axing of former minister of finance Pravin Gordhan and his deputy Mcebisi Jonas.

He was chairperson of the Prasa board for six years and an ordinary member for four years and left the state-owned company beset by crises.

The National Treasury's findings are quite different to the picture Buthelezi painted when he left his position as board chair. In his last annual report as chair in 2013/14 he wrote a glowing report on affairs at Prasa.

"I am immensely proud of of the hard work and commitment shown by the Board, Group Chief Executive Officer (Lucky Montana) and his Executive Management Team."

"I am pleased that as I hand over the baton to the new and incoming chairman (Popo Molefe), he will take over a company that is resilient, stable and with expertise of Prasa's executive management and employees," Buthelezi reportedly wrote.