A divided Media Development and Diversity Agency's (MDDA) board has rejected a legal opinion which suggests that funds used to pay its CEO may later be declared irregular expenditure.
The legal opinion, which TimesLIVE Premium has seen, was commissioned by the board last year to review an issue raised by the auditor-general (AG) to the MDDA about CEO Shoeshoe Qhu's appointment, which could be in breach of the MDDA act and by extension the Public Finance Management Act (PFMA).
Qhu, who took over a year ago, brings almost two decades of media experience and sees her appointment being challenged in the Johannesburg high court by “a concerned citizen”.
This came after an initial CEO job advert stipulated an NQF level 9 qualification, as well as five years' experience in executive management. However, the second advert lowered the requirements to an NQF level 8 and eight years in senior management, which saw Qhu getting the nod.
A legal opinion by Motsoeneng Bill Attorneys released to the agency in October last year found that Qhu's appointment may be irregular and unlawful as it contravenes the MDDA act and that funds spent to remunerate her may be declared illegal expenditure.
Issues of concern raised by the AG related to Qhu's lack of experience in finance and accounting.
MDDA board chairperson Hlengani Mathebula said the board was not agreeing with what the legal opinion has found but declined to divulge further details, saying they were already dealing with the issue in response to the court challenge, which is under way.
He also said they also differed with the view of the AG which felt the MDDA board may have misinterpreted the act.
“We engaged and differed with the auditor-general, and the auditor-general made a recommendation to say: as we differ, can you go and seek a legal opinion,” Mathebula said.
He also added that what the AG had raised was not an audit opinion or finding.
Mathebula said the issue of the CEO brought to the fore by the AG was “raised on the basis of the noise that they have been hearing” through a management letter.
If National Treasury agrees with you [MDDA board] that you've interpreted the act correctly, then the matter is going to rest there.
— Hlengani Mathebula, MDDA chairperson
He said as the custodian of the PFMA, the National Treasury, would be approached for a resolution.
“If National Treasury agrees with you [MDDA board] that you've interpreted the act correctly, then the matter is going to rest there,” Mathebula said.
He added that should the National Treasury not agree with them, when the AG conducts the financial year 2025/26 audits the issue about the appointment of the CEO being in contravention of the laws would be finalised then.
Mathebula said there were people within the MDDA who “unnecessarily wanted to create stories” out of the issue of the appointment of Qhu.
He added that the board was not in agreement with what the subsequent legal opinion found and this was supported by their lawyers.
“That legal opinion is going to form part and parcel of what we are going to deal with in court [in response to the court challenge against Qhu's appointment] so it will be very difficult for me — as the matter is sub judice — to give you reasons why we believe that the legal opinion is faulty from our perspective,” Mathebula said.
“And our lawyers agree with us. So you have lawyers that agree with us and there's lawyers that have said 'you've not interpreted the MDDA act correctly and we think we have interpreted the act correctly,’”
He said the board has already taken a decision about the legal opinion and that the majority of the board members voted in favour of rejecting it.
Insiders at the agency including within the board told TimesLIVE Premium that the legal opinion was kept as a closely guarded secret, with only Mathebula having the copy.
Mathebula denied this, saying board members discussed the opinion and voted on it.
However, two board members who spoke to TimesLIVE on condition of anonymity said the board only got to see the copy of the legal opinion in January, after a board member inquired about it.
“Nobody [from the board] except Mathebula had seen this thing until mid-January. And now all of a sudden this document is confidential and sensitive, to who?” asked a board member who is against the rejection of the opinion.
He said there were “people without a legal background taking decisions on legal matters. How can we as a board get a legal opinion of a legal opinion?”
The board member stated that they intended to bring the issue of the legal opinion back to the table as it did not make sense for board members to discuss and vote on something they had not seen.
Deputy minister in the presidency Kenny Morolong, who has been assigned executive oversight of the agency, said he was unaware of the legal opinion nor its status.
“The entity is stable, and there are areas that need to be strengthened by both the board, executive and staff in execution. From our end, we are ensuring that the required cohesion at all levels is strengthened up that there is enhanced mandate execution,” Morolong said.
He recently met with the board, executive and staff and the staff raised the issue of Qhu's appointment, TimesLIVE Premium learnt.
Parliament's portfolio committee on communications and digital technologies chairperson, Khusela Diko, said the legal opinion emphasised that: “the MDDA Act was intentional in that it made the requirement for the qualification and experience in accounting and financial matters compulsory”.
She added that the act also went on to say that as “far as possible, qualifications and experience in other fields and areas” were an advantage, however the committee felt that was not compulsory.
“So, if the incumbent has it [other experience in other fields and areas], that would be an added advantage; however, if not, it would not be detrimental to the role,” Diko said.
She said the “committee's unwavering position is to uphold the law at all times, and in instances where legislation has been compromised in any of the appointments, it remains the responsibility of the governance structure within MDDA.
“In this case, to justify the reasons and rationale for the appointment. The committee will thus be inviting the minister to present before the committee how this matter has been addressed based on all the guidance received, including the legal opinion.”
Thabiso Phaleng, who described himself as a “concerned citizen” hauled the MDDA to court in January in a bid to get Qhu's appointment reviewed and set aside.
He argued abandoning the initial recruitment process and re-advertising with the different lowered requirements was unlawful and amounted to illegal shifting of the goalposts.
The MDDA's mandate is to promote and ensure media development and diversity, with a focus on supporting community and small commercial media.
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