Former officials of the Nelson Mandela Bay Municipality will have to pay R7.6 million out of their own pockets to their former employer.
The former municipal officials were ordered by the SCA to pay R7.6 million with interest plus legal costs.
On Friday, the Supreme Court of Appeal ruled that the officials are liable for the municipality’s unauthorised, irregular, fruitless, and wasteful expenditure related to an unlawful contract awarded to a company called Erastyle.In 2014, Erastyle was appointed as lead consultant to develop a communication and marketing strategy for the Nelson Mandela Bay Municipality’s Integrated Public Transport System bus service in a deal valued at approximately R6 million.
The lawsuit targeted Erastyle, along with former Nelson Mandela Bay officials, including then-municipal manager Mpilo Sakile Mbambisa, former acting city manager Mamisa Chabula-Nxiweni , former IPTS project manager Mhleli Mlungisi Tshamase, former CFO Trevor Harper, former COO Mzwake Clay, former director of communications Roland Williams, and former executive director of infrastructure and engineering Walter Shaidi.
De Scande told the high court that she opposed Tshamase’s request to bypass the SCM policy, insisting that a 14-day tender process was mandatory.Initially, Chabula-Nxiweni agreed and declined to approve Erastyle’s appointment, but on 13 February 2014, she approved a second proposal for the contract based on “so-called legal advice” provided by Tshamase.
The judge concluded that former municipal officials be held personally liable and ordered them to pay the total amount of R7 638 177.10 with interest.In their appeal, the former municipal officials’ lawyers argued that Rugunanan had erred in interpreting Section 32 of the MFMA.
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