The National Housing Finance Corp (NHFC) has been rocked by allegations that its board has taken over the day-to-day running of the entity — meddling in procurement, hosting endless meetings and even interfering in HR.
The Sunday Times can reveal that board members told NHFC executives what companies to invite to bid for contracts to conduct investigations — and then sat in on the meetings where the bids were evaluated.
A bid evaluation committee (BEC) report last month showed that the chair of the board, Desmond Golding, and two other board members, Mthokozisi Xulu and Noluthando Mashologu, participated in such meetings.
Golding is not new to controversy. In 2018, the National Prosecuting Authority charged him, alongside Mike Mabuyakhulu — a leading figure in the ANC in KwaZulu-Natal — and others with corruption in connection with R28m paid to service providers for a 2012 jazz festival that never happened.
Golding, who was head of the KwaZulu-Natal department of economic development, tourism & environmental affairs at the time, authorised the payments.
In 2023, the Durban high court acquitted all the accused. However, last year the NPA applied to the Supreme Court of Appeal for permission to appeal this decision. The matter is pending.
The NHFC is an entity of the department of human settlements, tasked with funding the delivery of low-cost housing. It approves funding for housing developments to the tune of R1bn annually. Minister Thembi Simelane appointed the board at the beginning of August.
Shortly after its appointment, the board initiated a process to appoint contractors to conduct at least 40 investigations into legacy issues. According to the BEC report, issues that required investigation included allegations of impropriety, financial mismanagement, irregular procurement and workplace misconduct.
However, instead of mandating the NHFC’s executives to appoint contractors through normal procurement processes, the board decided that the directors themselves should nominate the companies that should be invited to bid.
We don’t want all these obstacles. It’s a board instruction, which we got from the executive authority. So don’t put all of these things in our way about normal processes; it’s not normal
— NHFC board member
At one meeting, recorded by a participant, when an executive pushed back about ignoring the normal procurement process, a board member says: “We don’t want all these obstacles. It’s a board instruction, which we got from the executive authority. So don’t put all of these things in our way about normal processes; it’s not normal.” The board member says the board is giving the CEO “an instruction... That’s not complicated.”
Board members said during the meeting that normal processes would not work because a number of service providers with a wide range of specialities needed to be appointed to work as a multidisciplinary team.
The executives continued to insist that service providers should be appointed from an existing panel of contractors, which had been identified following an open public tender process. But the board members prevailed, and it was agreed that they would forward the names of several companies to the NHFC company secretary, who had been tasked with co-ordinating the exercise.
Following that meeting, eight of the NHFC’s top executives wrote a letter intended for Golding and his board voicing displeasure about the way this issue and others had been handled. However the letter was never sent.
An NHFC executive, speaking on condition of anonymity, told the Sunday Times the board had held 12 meetings since it was constituted in August — four more than the annual maximum allowed by the board charter. Board subcommittees had racked up more than 18 meetings.
The executive said the board had also dabbled in HR matters. Two months after it was appointed, it lifted the suspension of a general manager that NHFC CEO Azola Mayekiso had imposed on the manager in April due to gross misconduct, insubordination and insolence, dereliction of duty and abuse of the whistleblower hotline.
Last week the board suspended Mayekiso herself, accusing her of fraudulently acquiring a corporate credit card, which she allegedly used to fund luxury trips abroad, and of interfering in an investigation. In the suspension letter, the board cited additional investigations by the National Treasury and the office of the public protector.
Speaking on behalf of the board, Satish Roopa, who chairs the HR committee, said Golding, Xulu and Mashologu’s involvement in procurement processes did not amount to “operational interference”.
“Their participation was required because the procurement in question related directly to forensic investigations, governance failures, and allegations of wrongdoing involving senior management, including the CEO.”
Because the investigations involved senior executives, including allegations against the CEO and executives within supply chain management, the board could not delegate this procurement to management, said Roopa.
“Under these circumstances, the board was obligated under the PFMA, the Companies Act and its fiduciary responsibilities to exercise oversight, ensure integrity, and prevent further risk to the organisation,” he said, adding that the NHFC’s procurement policies provided for deviations.
Roopa denied that the 10 companies that were invited to bid were nominated by board members.
“The companies were not identified by the board members. The minutes show that the CFO requested members of the board where necessary to make reference to companies with such expertise, as it was an RFQ [request for quotation]. This referral request was confirmed in a board meeting. To the best of our recollection only about three companies out of the 10 were forwarded to the company secretary, with the other seven coming from the SCM, following the CFO referral request.”
While the NHFC’s policies provided for eight board meetings a year, additional meetings were necessary as the issues that the directors had to address were extensive, said Roopa, denying that the board had hijacked the entity’s day-to-day operations.
The board had to lift the general manager’s suspension as it was procedurally flawed, unauthorised and compromised by a conflict of interest. Roopal said Mayekiso’s decision to suspend the general manager followed the lodging of a grievance against her by the manager.
“The board’s decision to intervene and lift the suspension does not constitute interference in administration. The board acted within its lawful oversight mandate, and based on sound legal advice, after it became clear that the suspension had been imposed irregularly, without authority, and in violation of the NHFC’s policy.”
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