Documents have shown how the Local Enterprise Authority (LEA) Board of Directors slept on their job, giving the chief executive officer carte blanche to make unilateral decisions beyond his statutory powers.
The documents indicate how the Board may have failed to provide oversight and strategic direction, allowing former CEO Dr. Racious Moatshe to ignore the government’s rationalization process by approving lengthy employment and service provision contracts running way beyond the anticipated existence of the parastatal itself.
Cabinet recently took a decision not to extend Moatshe’s contract following allegations the former CEO had developed a habit of making unilateral decisions beyond his mandate.
LEA is one of the State-owned enterprises that will be affected by the ongoing rationalization exercise designed to optimize the utilization of resources. Cabinet has approved plans to merge LEA with Citizen Entrepreneurial Development Agency (CEDA).
However, some of the decisions taken by former LEA CEO Moatshe, did not reflect the rationalization exercise. Documents have shown how the CEO was in the process of awarding a two year P2,1 million contract from October 2022 to September 2024 for the “procurement of marketing promotion space” to a local marketing company.
“This partnership will significantly amplify LEA visibility …and demonstrate how LEA continues to empower and transform business across all sectors and regions, through testimonial stories told by entrepreneurs,” says a document prepared by Head of Corporate Affairs “as per CEO request” after a meeting with the marketing company. The document states the contract would be a direct appointment “as there is no other service provider that provides a more dedicated marketing and advertising space”. Only one quotation was sourced from the company for this particular service.
Moatshe also stood accused of approving a five year contract of employment for Head of Human Capital two years after receiving a letter from then Ministry of Trade Permanent Secretary Keganele Malikongwa.
“As you may be aware, the government has commenced the process of rationalizing State-owned Enterprises. The exercise is done with a view to ensure efficiency and effectiveness in the operations of these institutions and to also address the overlapping mandates,” reads the letter from Malikongwa, dated September 4, 2020.
Moatshe was consequently advised to suspend recruitment of all vacant positions until the rationalization process has been completed.
The then CEO however ignored the directive and appointed a Head of Human Capital on a five year long contract effective February 1st, 2022 to January 31st, 2027 at a salary of P481, 939.00 per annum plus P382, 061.00 per annum in car, housing, mobile phone, and entertainment allowances.
The recruitment was internal, with the permanent and pensionable female employee resigning from her position to take up the five year contract.
Moatshe was also accused of having extended the employment period of a branch manager for a five year period. Both appointments were allegedly done without the approval of the Board. Another document passed to Sunday Standard demonstrates how the CEO employed the services of an immediate former employee as a consultant which appointment is in contravention of LEA’s own employment regulations.
The former employee was engaged within three months of their resignation from the parastatal. “An employee who leaves the employ of the Authority shall not within three months enter into any business related transaction with the Authority,” says LEA’s rules in relation to post-employment activities.
Responding to an enquiry from Sunday Standard LEA Board confirmed they had been oblivious to Moatshe’s actions. “Whilst we note the allegations that have been raised in the questionnaire, we are unfortunately unable to comment on them as we do not have any information or background to give a meaningful response thereto,” Board Chairperson Lorato Boakgomo-Ntakhwana wrote.
“However, as the LEA Board, we take these allegations seriously as they do not represent our values as an organization. We believe in good governance, transparency and accountability. Our commitment is to act fairly, transparently and with integrity in all our business activities and relationships.”
It has since come to Sunday Standard’s attention that Moatshe wrote a letter to Boakgomo-Ntakhwana before his departure in response to the allegations. The details of the letter reportedly include justification for the marketing contract as well as the contracts of employment stated above. The letter, it has now become apparent, did nothing to persuade cabinet to retain him as CEO.
