Why Manyi was suspended

Mdladlana angered by insistence on issuing audit report, writes Charles Molele

The fairy-tale marriage of Minister of Labour Membathisi Mdladlana and his director-general Jimmy Manyi ended acrimoniously on Friday afternoon when Manyi, the controversial Black Management Forum president, was booted out of the department.

The suspension of Manyi came during a week of drama in which the labour director-general clashed publicly with his boss over Manyi's alleged conduct during a meeting with Norwegian ambassador Tor Christian-Hilda in March.

It is understood that at the meeting, Manyi tried to further private business interests with Norwegians, who had requested a meeting with him to offer labour assistance to South Africa.

This evidently angered the Norwegians, who lodged a complaint against Manyi with the minister of international relations Maite Nkoana-Mashabane.

But Manyi has vehemently denied this, saying he simply wanted to help Norwegian companies with BEE transactions.

Mdladlana was also made aware of the complaint.

On Friday, Department of Labour spokesman Mzobanzi Jikazana confirmed that Manyi had indeed been suspended, but refused to be drawn on the reasons behind the suspension.

"I can confirm that it is true the director-general has been suspended," said Jikazana.

However, it is understood that tension between Mdladlana and Manyi was sparked by a damning KPMG forensic audit report that unearthed massive fraud and corruption at the labour department.

According to a source in the department, Manyi challenged Mdladlana to release the forensic audit to the public, but Mdladlana refused because it implicated several top management personnel close to the labour minister.

"This is the straw that broke the camel's back," a source said on Friday. "He (Manyi) was particularly irked that Mdladlana was in possession of the forensic report, and yet refusing to release (it) to the public."

However, those who defended Mdladlana said he was right to suspend Manyi because the director-general operated and took decisions without consulting his principal.

They cited an incident in April in which Manyi had allegedly inflated his department's budget requirements by requesting an additional budget allocation of R900-million from the National Treasury by e-mail.

The e-mail was disclosed by Democratic Alliance MP, Ian Ollis, who said Manyi had requested an additional R1-billion first, and "then ordered officials to inflate their own budgets in order to add up the amount".

Manyi said the money was meant to restructure the department and make it operate professionally and deliver on his mandate.

When the story reached Mdladlana's ears, he claimed to have been "embarrassed" by Manyi's request. That was the first time an ANC minister publicly rebuked an accounting officer of his own department.

According to sources, Manyi was appointed director-general contrary to the wishes of Mdladlana.

Manyi's dual role as BMF president and director-general in the Department of Labour is also said to be at the heart of tension between him and Mdladlana.

He was reportedly recently told by Mdladlana to choose between his job as director-general and the presidency of the BMF.

But the controversial BMF president has repeatedly dismissed these suggestions.

This week, Manyi was accused in a fresh scandal: of meddling in the appointment of close acquaintance and prominent member of the BMF as chairman of the board of Productivity SA.

Business Times has learnt reliably that staff, senior management and some of the board members at Productivity SA are up in arms at the appointment of Alwyn Nel.

It is alleged that Nel's appointment was not procedural, and did not follow normal processes such as going to the National Economic Development and Labour Council (Nedlac) before it was recommended to minister of labour.

Productivity SA is a section 21 Company, and reports directly to the minister. It is governed by a tripartite advisory council and board drawn from government, organised labour and business.

Nel, according to sources at Productivity SA, was appointed to the position as a form of payback after he vigorously campaigned for the election of Manyi as president of the BMF.

They claim that Manyi submitted the name of Nel, who is also the head of BMF's Pretoria branch, to the labour minister for recommendation while he ignored five other names suggested by the senior management and several board members.

Recommended names included those of SABC chairman Ben Ngubane and Renosi Mokate, former chairman of the Financial and Fiscal Commission.

Both were preferred because of their experience in strategic management, financial affairs, parastatals and corporate SA.

"There was no transparency in the appointment, and Manyi went out of his way to make sure Nel's name was the only one recommended for the board chairmanship of the company," said a source.

"The process did not go through usual Nedlac process, and so representatives from labour and business were excluded from appointing their own preferred candidate - who was not Nel."

The appointment of Nel has also raised the issue of Manyi's dual roles.

As chairman of the board, Nel was supposed to report to Manyi at the Department of Labour, and this raised concern about a possible conflict of interest because it was feared that Manyi would influence the appointment of a new CEO at Productivity SA soon.

The appointment of Nel has further contributed to low morale and deep uncertainty as the company is still searching for a new CEO.

On Friday, Nel said: "I know the BMF president very well, and I campaigned for him. It is normal. But to say he influenced my appointment and that proper channels were not followed is not true."

Nel said he was saddened by the high level of "black-on-black violence in corporate SA and the pull-him-down syndrome afflicting the private sector. These attacks on BMF must stop.

"I have the right qualifications for the job," he said.

Manyi was not available for comment at the time of going to press.