Shocking levels of corruption uncovered at City Power amid allegations involving the chairman’s wife

The City of Johannesburg Mayor, Herman Mashaba earlier this month confirmed that he has instituted an independent forensic investigation into City Power tenders valued at billions of rands.

The mayor said that he decided to investigate the state entity after information was handed to him, including allegations that the chairman’s wife was awarded a tender – purported to be a project of the Council for Scientific and Industrial Research (CSIR).

In a statement on Wednesday (15 February), City Power chairman, Reverend Frank Chikane, denied the claims against his spouse, and vowed to take legal steps to defend himself and his wife.

Chikane said that that under his leadership, as chairperson of the board of City Power, the board had driven a zero tolerance policy against fraud and corruption.

He said that efforts toward combating corruption has yielded significant results. He said an estimated 874 cases have been registered with the South African Police Services (SAPS) and National Prosecution Authorities (NPA). 813 arrests were registered, and 274 successful convictions have been secured.

A total of 9 cases of unethical behavior by management have also been recorded, six of these cases are in progress, while three of them have been finalized.

An additional five cases relating to insurance claims have been finalized and submitted to the insurance company for further action.

“There have been 9 cases relating to SCM irregularity, six of these cases have been finalized, while one case is still under investigation. Thirteen staff members have been dismissed so far,” he said.

A syndicate on cable theft was bust last year and a senior official in City Power was arrested. An investigation of fraud by internal and external parties operating a syndicate in the metering environment is also yielding results with the current meter read rate sitting at 92%, the chair said.

“Our efforts have also resulted in addressing abuse of overtime, travel, hot skills and cell phone allowances,” Chikane said.

Read: No more jobs for friends in Joburg as Mashaba launches skills audit

He said that anti-fraud and corruption initiatives at City Power are being met with aggressive resistance and one of the ways in which this has manifested itself is in “slanderous and baseless allegations being made to discredit the process and cast aspersions on the integrity of, amongst others, the chairperson of the board and his family”.

The chair said that some officials who were and or claim to be officials of the South African Municipal Workers Union (SAMWU) have, without any factual basis whatsoever, alleged that City Power’s MD, Sicelo Xulu, has approved and awarded a tender – purported to be a project of the Council for Scientific and Industrial Research (CSIR) – to the spouse of Rev Chikane.

“Nothing can be further from the truth than this allegation”, said Mr Xulu. “Mrs Chikane has no tender or contract with City Power”.

Chikane has responded to these false allegations by initiating legal proceedings against the officials who claim to be SAMWU members.

“He has demanded that they desist from this conduct; refrain from repeating this malicious and unfounded allegation; refrain from causing its further publication; and tender a public apology to both himself and his wife, by not later than Monday the 20 February 2017. Failing which legal action will be taken against them. A similar letter was sent to the President of SAMWU,” the statement said.

“These unfounded allegations are baseless, slanderous and represents a feeble and malicious intent to sully my and my family’s name. I wish to state categorically that neither my spouse nor any member of my family has any tender with City Power, nor were they awarded any contract by City Power. In addition, I also do not know of any tender awarded to the CSIR by City Power,” said Chikane.

He explained that his spouse was employed by the CSIR as stakeholder relationship manager, and interacted with various municipalities and their SOEs together with a technical team from CSIR, which deals with smart cities and related technologies.

Chikane said his wife was responsible for communication links between the cities affected and their related SOEs.

In order to develop and implement the smart city strategy, the CSIR sought to sign a memorandum of understanding with City Power in order to work with them in matters related to the CoJ’s Smart City strategy.

“As far as I know, only Memorandums of Understanding (MOUs) were signed between the CSIR and the City of Johannesburg, on the one hand, and City Power on the other”, said Mrs Chikane.

Mr Chikane said that he hopes that the officials who made these claims in a letterhead of SAMWU will respond on time by apologising publicly for making these defamatory allegations.

“Failure to do so will compel me to take legal action against them in order to preserve and protect the integrity of my name and that of my family,” he said.

This investigation is being conducted by Sizwe Ntsaluba Gobodo Incorporated, a top five auditing firm in South Africa.

“We expect a report to be finalised in the next six weeks and will make its findings and recommendations available to the public,” said Mashaba.


Read: Joburg mayor sacks MMC over City Power investigation dispute

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Shocking levels of corruption uncovered at City Power amid allegations involving the chairman’s wife