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Post Office CEO departs
amid lease irregularity
In January the SA Post Office (SAPO) announced that Group CEO Motshoanetsi Lefoka had resigned following ‘irregularities’ at the Post Office. South Africa Magazine examines the case. By Robert Michaels
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t has been an interesting start to 2012 for SA Post Office (SAPO) to say the least. In January group CEO Motshoanetsi Lefoka resigned. The Communication Workers’ Union (CWU) welcomed the resignation after the SAPO said had reached a “mutually agreed separation” with Ms Lefoka. The terms of that agreement were confidential. The SAPO said Nick Buick was being retained as acting group CEO and that a new head would be recruited. The CWU said it consistently highlighted maladministration and
SA Post Office FEATURE
corruption under Lefoka’s leadership. She was placed on special leave in October when a corruption investigation started. That month there was also a mutual agreement on the termination of the contract of chief operating officer John Wentzel. The CWU urged the SAPO board and the office of the Public Protector to release findings of the investigations as soon as possible. It believed there were a number of individuals involved in corrupt practices at SAPO. “We would like to meet with the board to find out exactly what the terms of the resignation were,” CWU deputy president Clyde Mervin said, welcoming Lefoka’s departure, saying the union had been vindicated for raising issues around irregularities at the Post Office. “The Ecopoint investigation led to two processes: the hearings against three executives - Ms Motshoanetsi Lefoka (the Group Chief Executive Officer), Mr. John Wentzel (the Group Chief Operating Officer) and Ms M. Lancaster (Group Executive Strategy) with regards to governance/PFMA breaches,” the SAPO said in a statement. “A separation agreement between SAPO and the Group CEO as well as COO was concluded. “Ms Lancaster was charged and subjected to a disciplinary enquiry before an independent external chairperson. The chairperson of the disciplinary enquiry found Ms Lancaster not guilty of the charges.”
The SAPO said it had referred alleged criminality by two senior managers to the South African Police Service. “The SAPS investigation is progressing and the Company reserves its right to institute action against employees to recover any losses it may have suffered as a result of any action by the employees during employment by the Company,” it said. “The Board of Directors and the management of the SA Post Office however recognise that disciplinary action is just one part of remedial action. Attention is focused on corrective action to eradicate all forms of irregular, fruitless and wasteful expenditure.” Policy framework had been developed for managing irregular, fruitless and wasteful expenditure, which has been approved by the Board of Directors, the SAPO said. “The Executive Committee (Exco) has appointed a subcommittee to monitor irregular, fruitless and wasteful expenditure and to regularly report to Exco,” it added. The case against Lefoka centres on the lease of new offices involving irregular and wasteful expenditure of nearly R450 million. Last year the SAPO board announced that R19 million in “fruitless and wasteful” expenditure and R425 million in “irregular expenditure” were incurred in the process of moving the Post Office’s head office from Pretoria to the new building in Centurion. Despite these irregularities, the SAPO posted strong financial results for the financial year ending March 2011, achieving a three percent increase in revenue to R5.8 billion. “In an environment where established global postal operators face structural decline with a huge fall in mail volumes and stiff commercial pressures, it is www.southafricamag.com
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SA Post Office FEATURE
commendable that our revenue diversification strategy continued to strengthen as mail volumes declined,” said group Chairperson Vuyo Mahlati. “Other highlights, which are a critical function of our efforts to ensure growth and sustainability, include the robust performance of the Postbank and the proactive approach to corporate governance by the board,” she said. Postbank posted an increase in non-interest revenue of R88 million as well as an increase if R331 million in its depositors book, despite a low interest rate environment. During the period, 1.71 million new addresses were rolled out to people in rural and under serviced areas, the SAPO
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added. ”An address means that people can become economically active,” said Mahlati. “Ordinary citizens can now open accounts as well as comply with the statutory requirements of RICA and FICA, for example.” Other highlights worth mentioning included the opening of 26 new post office outlets, as well as more than two million motor vehicle licenses being renewed. In May 2011, this service was extended to a further 93 post office branches in Gauteng, bringing the total to 259 branches now issuing motor vehicle licenses. The group’s focus going forward is on change management leadership for a client-centred, costeffective and efficient corporatisation of the SAPO in general, and the Postbank in particular. “In this regard attention will be on human capital development, operations systems and controls improvement, as well as corporate governance to ensure that we deliver the world-class service that the nation has come to expect,” said Mahlati. END
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