We've got news for you.

Register on TimesLIVE at no cost to receive newsletters, read exclusive articles & more.
Register now

FSB top brass accused of 'rigged tender cover-up'

07 February 2016 - 02:00 By STEPHAN HOFSTATTER and MZILIKAZI wa AFRIKA

A new scandal has erupted at the Financial Services Board (FSB), with its secretariat manager, Mabulenyana Marweshe, demanding that the heads of top executives roll for allegedly covering up a dodgy deal. Marweshe has lodged a grievance with the FSB board and Finance Minister Pravin Gordhan, complaining he was victimised after he saved taxpayers millions by blowing the whistle on the deal, even though he was required to do so by law.He wants Gordhan to launch an independent forensic investigation into the deal and suspend the FSB's top brass, including CEO Dube Tshidi and audit committee chairman Jabu Mogadime.This is the latest governance scandal to hit Tshidi, with the FSB still reeling from a court challenge launched last month by its head of pensions, Rosemary Hunter. The FSB regulates all non-banking financial services and should be above suspicion, but her court papers paint a picture of alleged governance lapses under Tshidi.story_article_left1She accuses the CEO of "unlawful conduct" in trying to block an investigation she initiated after she found the regulator had illegally deregistered thousands of pension funds that held an estimated R9-billion.The FSB is opposing her application but Tshidi has not yet filed his response. His spokeswoman, Tembisa Marele, said last week that an investigation into Hunter's "concerns" was "not yet complete".Marweshe's grievance lodged with Gordhan is likely to compound Tshidi's woes. Marweshe accuses Tshidi, Mogadime and former acting chief financial officer Roy Harichunder of colluding in a cover-up of a deal that would embarrass the FSB.The deal was to audit the books of the FSB, the Financial Services Ombudsman and Pension Funds Adjudicator for three years. The tender was illegally awarded to Johannesburg audit firm SekelaXabiso in February last year, after it had expired and before it was approved by the FSB's audit committee. This led Marweshe to suspect the tender was rigged.A recording heard by the Sunday Times reveals that when Marweshe raised the issue with Harichunder, he was told that after "extensive discussions" with Tshidi and Mogadime, it was decided to "let sleeping dogs lie". Exposing the tender's expiry "would have created a lot of embarrassment for the FSB".Marweshe decided to report to the FSB board that Tshidi, Mogadime and Harichunder had colluded to illegally award the tender to SekelaXabiso and tried to cover this up when caught out, including by misleading the audit committee.story_article_right2Although blowing the whistle led to the deal being cancelled, there was no investigation into Marweshe's allegations. Instead, he was victimised by Tshidi, who cancelled his MBA study loan, stopped his foreign work trips, and sabotaged his ability to perform his duties, he said in his grievance.Harichunder this week confirmed he was aware of the complaint but denied wrongdoing. "Neither myself nor the CEO [Tshidi], nor the chair of the audit committee [Mogadime] made any attempt to mislead the audit committee."Marele, commenting on behalf of the FSB, Tshidi and Mogadime, denied any "attempt to subvert or cover up any irregularities". However, a decision was made at a special board meeting last week to investigate Marweshe's allegations.Marele said the tender was awarded a week after it had expired "owing to an administrative oversight".Marweshe and SekelaXabiso declined to comment.Gordhan said the FSB would appoint an independent investigator to look into Marweshe's complaint, his spokeswoman, Phumza Macanda, said.He would respond formally to Hunter's court application "after considering the nature of the issues raised" within time limits set by the courts, she said.investigations@sundaytimes.co.za..

This article is reserved for Sunday Times subscribers.

A subscription gives you full digital access to all Sunday Times content.

Already subscribed? Simply sign in below.

Registered on the BusinessLIVE, Business Day or Financial Mail websites? Sign in with the same details.

Questions or problems? Email helpdesk@timeslive.co.za or call 0860 52 52 00.