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- Leonard Ramatlakane was fired as Prasa chair following an investigation into his discounted lease of a Prasa house.
- He has now launched legal action against the transport minister and Prasa to set aside his dismissal.
- Ramatlakane also wants a "stipend" of R100 000 per month for five months.
Leonard Ramatlakane, the fired chair of the Passenger Rail Agency of SA (Prasa), wants his job back.
Ramatlakane has launched legal action against Transport Minister Sindisiwe Chikunga, who dismissed him, as well as Prasa, in the Western Cape High Court, insisting his dismissal was "unconstitutional, unlawful and void". He contends that he was fired for allegations that were never made or investigated, and on findings that were never made by any investigation.
Not only does Ramatlakane want his dismissal and the investigation report reviewed, but the former ANC MP also wants Prasa to pay him a "stipend" of R100 000 per month for five months. This will cover the period since his dismissal up to October 2023, which will be the end of the board's term.
He was appointed to the board by then transport minister Fikile Mbalula in 2020 and then fired in May this year by Chikunga following an investigation into his lease of a Prasa residential property in Newlands, Cape Town. The lease for the house, which is reserved for travelling Prasa employees, started in December 2022 and ended this March.
According to court papers obtained by News24, Ramatlakane said in an affidavit that he moved his family into the house during renovations to his own property in the suburb of Monte Vista. It being December, he said he could not find a property to rent for such a short period in Cape Town.
Ramatlakane contends that he asked Prasa if it had any residential properties available for a short-term lease in the Retreat and Newlands areas. He had been looking for a two-bedroom property to rent for two months.
Ramatlakane was initially informed by Prasa employees that an independent market rental valuation for the 440-square-metre Newlands house had been established as R30 000, plus rates of R2 475 per month back in June 2016. This rental came with a recommended 8% annual escalation until 2020. The escalation would drop to 6% per year between 2021 and the following year.
Ramatlakane said he only wanted to lease half the house, which would be 228 square metres. He was told that this would come to almost R25 000 per month, excluding electricity, water and an administration fee of R1 500. For this, he would be required to pay the whole amount of almost R56 400 upfront ahead of him taking occupation of the property for the two months.
When he informed the Prasa officials that this amount was "out of reach" for him and checked if there was any alternative property available, Ramatlakane said the Prasa officials responded that they would "waive the market rates as Mr Ramatlakane is internal and it is a short (lease) period".
He said he was offered a rental of R12 500 per month, half the rental rate determined six years earlier.
Significantly, Ramatlakane admits he moved into the property on 15 December 2022, and only signed the lease agreement two days later.
He said he was not party to the internal discussions by the staff that culminated in the lower rental, and that he did not ask for a discounted rental. He said he only became aware of internal emails about the matter after he received the investigation report into the transaction.
"I should here emphasise that, although I realised that the amount was reduced from the original amount which had been proposed in the Letter of Acceptance, the reasons for this were not apparent. Certainly, there was no statement in the document that any reduction was being offered to me by virtue of my being a member of the board."
'Procedurally unfair'
Ramatlakane insisted his lease agreement was an opportunity for Prasa to generate revenue on a property that had not attracted a tenant for eight years and had stood vacant. "The rental by me of the property accordingly constituted a profitable exploitation of that asset. I did not know, nor was I told, that this rental was below market value," he said.
Prasa's board decided to investigate the transaction once it was alerted to it by a Sunday Times article.
But Ramatlakane says this was not for the Prasa board to investigate. Instead, the investigation should have been initiated and acted on only by the transport minister, who appoints the board.
He contends the process followed was "procedurally unfair" as the minister relied on a "flawed" report produced at the insistence of the Prasa board, which conducted an "unauthorised and unwarranted" investigation into the lease.
The audit firm SizweNtsalubaGobodo Grant Thornton (SNG Grant Thornton) prepared the report. He claims Chikunga had also denied him an opportunity to make representations in person on the report produced - instead she asked for written representations.
"I was not afforded the opportunity to consider and respond to the allegations in the Grant Thornton report before it was approved by the (Prasa) board and delivered to the minister," said Ramatlakane in his affidavit. "Likewise, I was not afforded a proper opportunity to explain the situation to the minister."
Ramatlakane said he was only interviewed by SNG Grant Thornton after the fact, which was "going through the motions" when it had already submitted a draft to the Prasa board for approval.
"I was not afforded an opportunity to consider and respond to the allegations in the Grant Thornton report before it was delivered to the board and delivered to the minister. The interview I was granted took place at a time when the report had already been finalised," he said.
Ramatlakane had also made an undertaking to Chikunga to "paying any amount later deemed to be due to Prasa. The fact is that, to date, I have already, in good faith, paid R98 000, including the initial rental agreed to, following the Grant Thornton report and prior to the minister's decision to dismiss me".
Procedure 'unlawful'
When Chikunga invited Ramatlakane to make written representations why he should not be fired, "this was in relation to various transgressions many of which in fact the Grant Thornton report had not accused me of, let alone found I had committed", he claims.
In her dismissal letter, Chikunga said the lease agreement was a "prohibited conduct between Prasa and yourself; and further the lease agreement was not entered in the best interest of Prasa, as the rental fee was significantly reduced in your favour".
The minister further said the transaction had "resulted in a significant conflict of interest by yourself; contravened the Board Charter and your fiduciary duties". The fact this transaction was negotiated with "junior officials of Prasa constituted a significant conflict of interest, abuse of power, contravened the Legal Succession of Transport Services Act, the Public Finance Management Act as well as the Board Charter".
This brought Prasa into disrepute, broke the relationship of trust between the minister as the shareholder and the chairperson of the board, amongst board members, and eroded public confidence in the governance of Prasa.
Particularly given the many instances of "past maladministration, sleaze and malfeasance" at Prasa, it was expected of Ramatlakane to lead the parastatal "with honesty, integrity and demonstrate the highest levels of ethics, which you failed to exercise when entering into this lease agreement", wrote Chikunga.
But Ramatlakane said the procedure was unlawful because the investigation giving rise to it was not initiated or overseen by the minister, but instead emerged from an internal investigation whose purpose was not to gauge the advisability of his dismissal.
Neither was the investigation initiated to check whether he had contravened the PFMA, the Companies Act or the Legal Succession to the South African Transport Services Act, as alleged by the minister in the dismissal letter. The report certainly did not make these findings and the minister's decision to fire him "was not rationally connected to the purpose" for which the investigation had been undertaken, insisted Ramatlakane.
