The office of the auditor-general (AGSA) has set its sights on beleaguered state passenger rail company Prasa after allegations of irregular spending and mismanagement of funds relating to more than R33m of payments to two law firms since 2021.
AG Tsakani Maluleke’s office confirmed to the Sunday Times this week that it was investigating the allegations made against Prasa’s legal division, led by acting legal head Thato Tsautse.
" AGSA can confirm it has received the disclosure you are inquiring about. The matters raised are being processed as part of the Prasa external audit, which is still under way. After the audit has been concluded, the AGSA will provide formal feedback to the writers of the memo,” said the auditor-general’s spokesperson Harold Maloka.
This is after Maluleke’s office received a whistle-blower complaint under the Protected Disclosures Act from Prasa employees accusing Tsautse of misconduct and irregular expenditure in the appointment of Sandton law firm Thipa Attorneys.
The Sunday Times understands that in the complaint to the AG, which has yet to be tested, employees allege that Thipa Attorneys, which has already invoiced Prasa about R16m, was irregularly appointed to conduct investigations and review work previously done by “other Prasa attorneys” regarding the agency’s insurance claims.
The Prasa employees said they decided to approach the AG after attempts to get their board members and the office of the acting group CEO to act on them failed.
Part of the protected disclosure to Maluleke’s office reads: “Taking into consideration the size and nature of the project, various attorneys specialising in forensic investigations under the approved Necsa [South African Nuclear Energy Corp] panel ought to have been called upon by Prasa to provide quotations for the services, failing which a transparent, fair and equitable appointment process ought to have been concluded with the assistance of supply chain management.”
Prasa does not have a panel of attorneys because the AG found them to have been irregularly appointed. Instead, Prasa was directed to use the services of law firms on the approved panel at Necsa, another state agency, to ensure the rotation of law firms and a fair and transparent process. Prasa issued a request for proposals to appoint a panel of attorneys of its own only this month.
The employees allege there is now a parallel legal structure at Prasa that is “causing confusion, disunity and alienation” of the agency’s permanently employed legal advisers. They further allege fraudulent activities as attorneys from Thipa have been assigned Prasa email addresses.
“Ms Tsautse has flouted the procurement processes to achieve the appointment of Thipa Attorneys,” reads their disclosure.
Thipa Attorneys MD Thabo Thipa declined to comment on Friday, saying he needed time to consult.
The Prasa employees also asked Maluleke to investigate the appointment of Pretoria law firm De Swardt Myambo Hlahla Attorneys, which Prasa has allegedly paid about R17m since 2021 despite the National Treasury declining a deviation to allow for its appointment in March last year.
Prasa has used De Swardt Myambo Hlahla Attorneys for most of its disciplinary cases against senior executives. These include the dismissals of former CEO Zolani Matthews and executives Martha Ngoye and Tiro Holele, which were overturned by the courts.
Mxolisi Myambo of De Swardt Myambo Hlahla Attorneys declined to comment and referred all questions to Prasa.
The whistle-blowers also alleged that Prasa paid too much for Thipa Attorneys.
“Thipa Attorneys has up to seven resources on any one matter assigned to it by Ms Tsautse and is further invoicing outside the prescribed hourly rates. It would therefore appear that Thipa Attorneys is exempt from the very same prescripts and directives issued from Ms Tsautse’s office,” they wrote in their disclosure.
“Unfortunately, there has been no action taken on the part of the acting group CEO or a substantive response or update provided to the reporting officials. This inaction is, in itself, extremely concerning.”
After receiving questions from the Sunday Times this week, Prasa spokesperson Andiswa Makanda said that the agency will not comment as it was now investigating the allegations.
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