Minister wants action on allegations against EAAB CEO

MAIN IMAGE: No stranger to controversy, Mamodupi Mohlala-Mulaudzi, CEO of the EAAB. Photo by: Cebile Ntuli

The Department of Human Settlements (DHS) minister Lindiwe Sisulu has asked the chairman of the Estate Agency Affairs Board (EAAB) for an action plan after he seemingly failed to react to serious allegations of irregularities and mismanagement at the industry’s regulator that implicate their new CEO.

Nepotism with executive appointments. Irregular and wasteful expenditure amounting to millions. These are among the serious allegations levelled against the EAAB’s CEO Mamodupi Mohlala-Mulaudzi. Senior staff members are deeply concerned that should this continue it will bring the real estate regulator to ruin within the next few months.

A memorandum detailing these allegations of mismanagement and irregularities that implicate the CEO was given to the EAAB’s chairman Nkosinathi Biko on 16 September, but he apparently failed to act timeously to launch an investigation into the claims. Simultaneously a copy of the memorandum was also sent to the Director-General of the Department of Human Settlements – the government department that the EAAB answers to.

Last week DHS Minister Sisulu in a letter to Biko gave him seven working days until today (Thursday 14 November) to respond with an action plan. In the letter the Minister informs Biko that she was advised by her department about “allegations of irregularities and mismanagement that have occurred and are currently occurring at the EAAB,” and that the allegations implicate the EAAB’s CEO. Mohlala has been CEO of the EAAB since the beginning of 2019.

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The Minister goes on to quote from the Public Finance Management Act with reference to the responsibility of the accounting authority of a public entity to prevent ‘irregular, wasteful and fruitless expenditure with regards to operations and capital expenditure resulting from criminal conduct, and expenditure not complying with the operational policies of the council etc’.

She continues that financial misconduct is ground for dismissal or suspension and ends the letter with an ultimatum of seven working days for Biko to respond with a plan of action.

Tuso Zibula, DHS media relations, confirmed on Wednesday 13 November that the minister wrote to the Board of the EAAB with a request for a plan of action on how the concerns raised by an employee of the organisation are being attended to. “The concerns relate to the alleged mismanagement and irregularities within the organisation,” he says.

Not chairman but CEO responds

The EAAB spokesperson Bongani Mlangeni was asked to request comment from Biko on what is being done about the allegations and the letter from the Minister. Yesterday afternoon, in a call from the CEO’s office, a telephonic interview Thursday morning 14 November at 10am was requested in order to answer the questions directed at Biko.  This was surprising as the CEO had not been approached for comment. She was then forwarded to her direct email specific questions concerning the allegations made against her.

The CEO did not calI or respond to the email. Emailed comment was received around noon on Thursday from Biko that it would be inappropriate at this moment to “entertain” questions about the letter from the minister before the Board had submitted its own response to the Minister.

The whistleblower email

Earlier this week an anonymous email signed ‘Whistleblower’ informed the real estate industry asking industry members to call for the suspension of the CEO and for the immediate investigation of the allegations against her.  In this email mention is made that the CEO is responsible for irregular expenses and fruitless and wasteful expense at the EAAB. It is further alleged that the DHS minister stepped in because the EAAB chairman hasn’t done anything to investigate these allegations after he received information about it. Biko is allegedly protecting the CEO.

Another scandal for embattled EAAB

The latest allegations follow shortly after a Sunday Times report which said that Sisulu had instructed the director-general in her department to look into allegations of corruption and mismanagement at the regulator. The report also mentions that Biko confirmed the Board was looking into complaints of nepotism, fraud and theft at the institution which was raised by staff members in a memorandum presented to Biko in September.

In the last five years there has been a number of reports and calls for investigation on allegations of wasteful expenditure, mismanagement and irregularities at the regulator. The institution has gone through three CEOs and three CFOs in the last five years.

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Controversy appears to follow Mohlala wherever she goes. She fought and won two legal battles after first being fired as Director-General of the Department of Communication in 2010 and then in 2012 she contested her removal as National Consumer Commissioner.

In 2017 she announced that she will represent South African Football Association president Danny Jordaan when he was charged with rape. She is a qualified attorney with her own law firm.

Related reading: There are ten things we know about Danny Jordaan’s powerhouse lawyer

Despite just stepping into her new role as CEO of the EAAB, an entity facing enormous challenges ito effective financial, administrative and IT management, Mohlala in April was also appointed as deputy chairman of another embattled state-owned entity, the SABC. A few months later she is directly linked to a new controversy involving allegations against the CEO and chief financial officer of the public broadcaster’s new board.

Related reading:  SABC execs consider legal action as board document is leaked

Jan le Roux, CE of Rebosa commented “We request that urgent action will be taken to investigate. It is important that matters be put right if the allegations are true. The industry needs an effective regulator that leads by example. An undertaking from Mr Biko to take serious and immediate action would put minds at rest.”

In the weeks to come, all eyes in the real estate industry will be on EAAB chairman Biko and DHS minister Sisulu to see what plan of action will follow. Will the new CEO of the EAAB be suspended? If yes, indications are that she will not take this lying down.

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