DA calls on Labour Minister to suspend special advisor following damning forensic audit findings
1 March 2015
The Minister of Labour, Mildred Oliphant, continues to retain former Executive Director of Nedlac, Herbert Mkhize, as her special advisor even though a Department of Labour initiated external forensic report found that he and then Chief Financial Officer of Nedlac, Umesh Dulabh, fraudulently and illegally enriched themselves to the value of almost R2 million using Nedlac funds. The Minister has had this report in her possession for more than two years but has taken no action (see Sunday Times report).
It is unacceptable that an individual engaged in systematic self-enrichment at taxpayers' expense is still being protected by the Minister. The Minister must immediately suspend Mr Mkhize, and see to it that criminal charges are instituted against both Mkhize and Dulabh.
The forensic report into the alleged corrupt activities at Nedlac found that Mkhize and Dulabh used their Nedlac Diners cards to fraudulently spend over R1 million of public funds on a host of personal items between 2011 and 2012. I have obtained this report after a successful Promotion of Access to Information Act (PAIA) application.
Some of the expenditure includes:
R431 000 on luxury car rentals, to travel locally around Johannesburg;
R261 000 on car rentals outside office hours;
R186 000 on unauthorised petrol expenses;
R19 000 on traffic fines and damages to rented cars.
Much of the expenditure is undoubtedly of a personal nature, including unauthorised trips for the director's wife, nappies, female cosmetics, car tyres for private vehicles, sporting equipment, electronic devices, home appliances, general groceries and alcohol. (See expenditure lists here)
Mkhize also unduly benefitted from interest free loans from Nedlac to himself to the value of R147 200, which the report finds to be in contravention of the Income Tax Act.
The forensic report further found Mkhize had his car serviced with the Nedlac Diners card a full month after he had resigned from Nedlac. Other purchases such as tires and items from the Ferrari Shop were also made.
The Minister's inaction smacks of a cover-up to protect a deployed cadre found to have his fingers in the till.
It is disconcerting that the Minister has had the final forensic in her possession since 1 November 2012, yet did everything in her power to sweep the issue under the carpet. While the report recommends that both criminal and civil charges be instituted against Mkhize and Dulabh, Minister Oliphant has retained Mkhize as her special advisor for the last two years, at the taxpayers' expense.
The Minister must now without fail:
Suspend Herbert Mkhize as her special advisor, with immediate effect;
Ensure both criminal and civil charges are instituted against Mkhize and Dulabh;
See to it that both Mkhize and Dulabh pay back all unauthorised money spent;
Ensure SARS conduct a full investigation and claim back unpaid tax and benefits;
Appear before the Labour Portfolio Committee to explain why she blocked the release of this report and failed to take action against those implicated.
The DA welcomes the fact that the Nedlac board, under new management, has put in place measures to ensure an incident such as this does not occur again.
The DA will not let this rest until we have explored every avenue to get to the bottom of this matter.
Statement issued by Ian Ollis MP, DA Shadow Minister of Labour, March 1 2015
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