Postbank’s Board of Directors resigned on September 12 ahead of Thursday’s Annual General Meeting of the Postbank.
MINISTER of Communications and Digital Technologies, Mondli Gungubele has removed the Board of Directors of the South African Postbank, following damning allegations from a forensic investigation report by KPMG that Postbank continued to use service providers that had not been lawfully contracted.
According to his Ministry, these service providers were being paid millions without valid contracts and proper procurement processes being followed.
Gungubele has in the meantime appointed Khayalethu Ngema as the administrator of the Postbank, pending the appointment of the new board.
Gungubele described the resignations as “pre-emptive”.
He said the Board of Directors resigned on September 12 ahead of Thursday’s Annual General Meeting of the Postbank.
On Thursday morning, the only remaining Non-Executive Director was removed by the Minister at the AGM in line with Section 71 of the Companies Act.
The forensic report recommended that the shareholder must act against the Board of Directors, a recommendation that was supported by Senior Counsel’s legal opinion, taking into account the details contained in the report.
“In light of the forensic report, the Minister followed due process and indicated his intention to make his final decision at (Thursday’s) AGM in terms of Section 71 of the Companies Act which sets out the process a shareholder must follow to remove directors,” the Communications and Digital Technologies Ministry said.
Gungubele further condemned the leaking of documents, which he labelled as “public stunts”, and further refuted “with the contempt they deserve, the spurious allegations on his person by the former board members in their letter that they chose to leak via WhatsApp groups”.
He said he had no intention to engage on these as they were void and without substance and would detract him from his singular commitment to ensure that the Postbank becomes a quality state bank.
As required by the Postbank Act, the Department has issued an advertisement for the appointment of a new Board of Directors and said it would seek the opinions of the relevant regulatory authorities on the suitability of members to be appointed.
The Congress of South African Trade Unions (Cosatu) also raised its deep concerns about the state of the Postbank.
It said it was horrified by reports that thousands of social grant recipients were struggling to access their monies on time, and the mass resignation of the Postbank Board raised further red flags about the state of affairs in the bank and the impact this is having upon its customers and employees.
Thousands of people were left without their grant payments this month following a “glitch” in the system payouts.
Postbank has implemented a manual process to reverse funds to thousands of grantees after a system glitch last week left them without access to funds.
Cosatu said it seek an urgent meeting with Gungubele to raise their concerns and hear from government on what exactly was their plan to fix this crisis and place the Postbank on a sustainable path to recovery.
“Government needs to take the rebuilding of the State much more seriously and show the necessary sense of urgency in actioning turnaround plans. Endless PowerPoint presentations will not put money in pensioners’ bank accounts. We should not be struggling to process electronic payments in the 21st century,” Cosatu said.