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·      Steve Tshwete mayor, Mhlonishwa Masilela, says manager did nothing wrong ·      Court finds that Mandla Mnguni signed a contract he had not read ·      Mnguni withheld payment of R4.8 million

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Sizwe sama Yende

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The mayor of Mpumalanga’s Steve Tshwete municipality has defended the council’s manager despite a court judgment putting the blame on him for signing a contract he had not read. 

Mhlonishwa Masilela will also appeal the judgement issued by Judge Moira Mankge on September 12 in the Mpumalanga Division of the High Court in Middleburg ordering the municipality to pay Maximum Profit Recovery (Pty) Ltd’s (MaxPro) R4.8 million.

Steve Tshwete manager, Mandla Mnguni, withheld MaxPro’s payment of R4.8 million, and accused the company of fraud.

The municipality appointed MaxPro to conduct VAT reviews for the municipality and it succeeded to claim R48.6 million for the municipality.

However, Mnguni refused to pay two invoices of R1 615 873.71 and R3 138 043.72 for work it had done.

Mnguni accused MaxPro of having unilaterally amended the service level agreement by including a clause to perform VAT return functions when it was given a draft copy to sign on May 9 2023.

MaxPro told the court that its official honestly believed the municipality had mistakenly not included this clause in the agreement.

Mnguni received the contract with the new clause back from Maximum Profit and signed it without hesitation. He returned the contract to the company accompanied by a Power of Attorney, but later refused to pay.

Masilela said that there was no negligence attributed to Mnguni’s conduct, and he would not institute any disciplinary action against him.

“The SLA was sent to MaxPro in PDF format, and steps were taken to convert the document into word format so that it can be edited,” Masilela said.

“Take note that the finding by the court does not attribute any negligence on the part of the municipal manager, which led to the ultimate judgment by the court,” he added.

However, Judge Mankge found that the service level agreement was binding, and was scathing of Mnguni’s conduct.

She said Mnguni was “neglectful” when signing the service level agreement without due diligence. 

“When he causes himself to sign a document without proper due diligence, he may easily be accused of breaching fiduciary duties and the requirement of the Local Government: Municipal Finance Management Act 56 0f 2003, which mandates due care, diligence, and adherence to the law to prevent mismanagement of municipal funds and resources,” Mankge said.

“The municipal manager’s signing of the service level agreement and Power of Attorney, which could result in the municipality being invoiced for services rendered, without proper due diligence, contradicts MFMA, which requires the municipal manager to prevent unauthorised, irregular or fruitless or wasteful expenditure, making failure to conduct due diligence a potential breach.”

Mnguni had approached the court to declare the contract unlawful and void ab initio (void from the beginning) and that the municipality was not liable for paying the two invoices dated 10 August and 11 September 2023.

His court action to avoid payment backfired.

Masilela insisted that no money was wasted on the case. Mnguni’s court action has cost R391 600 in legal fees.