Latest news with #MusaMbhele
IOL News
13-06-2025
- Business
- IOL News
eThekwini Municipality's legal challenges: Officials clarify the impact of recent court rulings
eThekwini Municipality's head of Legal, Malusi Mhlongo and municipal manager Musa Mbhele at a media briefing held on Thursday on recent court judgments against the City. Image: Doctor Ngcobo / Independent Newspapers An official who issued an illegal instruction to offer a settlement to a service provider, which has subsequently resulted in the eThekwini Municipality having to pay R53 million, will be dealt with. This was said by senior municipal officials who were at a media briefing held yesterday by the City, which was aimed at dispelling concerns about the mismanagement of ratepayers' money through fruitless litigation. The officials also defended city manager Musa Mbhele. They asserted that he is being unfairly maligned when the cases predate his term, emphasising that he has acted with integrity and has the full authority and support of the council. The City's Head of Legal, Malusi Mhlongo, discussed various legal cases involving the municipality. One significant case was the dispute between the City and Daily Double Trading. Recently, the Constitutional Court concluded the matter by denying the City the right to appeal an earlier judgment that found in favour of the company. At issue in the court case was a settlement agreement that the municipality entered into years ago after being sued by the service provider. The City contends that the agreement was illegal because the official who authorised the settlement lacked the necessary authority. While the company initially claimed R30 million, the total has now escalated to R53 million, including accumulated interest. Mhlongo stated, 'We are in the process of complying with the order. As soon as the judgment from the Constitutional Court was issued, we instructed the representatives of the company to produce an invoice.' He added that action was initiated on the first day following the judgment, and the payment process is now underway. When questioned about the role of the city's lawyer who entered into this arrangement, Mhlongo clarified that it was a city official who provided an illegitimate instruction for the settlement agreement without the power to do so. 'With the records available, the identity of the person who gave the instruction has become known, but I am not at liberty to publish his or her name at the moment because it is a matter that is still under discussion,' he said. It was not immediately clear how long the City has known the identity of this person and the exact nature of the discussions that are taking place. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading The City also dismissed any suggestion that it failed to put up its case in court, stating that it provided evidence through affidavits rather than via individuals who were summoned to testify. Mhlongo also addressed two other cases. He revealed that on Wednesday, another judgment went against the City concerning the rental of a marquee from a company called Bless Joe Trading. The City had been renting a marquee to accommodate displaced individuals at a cost of R208,000 per day, which was intended to last for only 14 days but ended up remaining for over a year. The owner of the marquee is now demanding close to R73 million from the City. Mhlongo clarified, 'The judgment stated that we must pay for a year at market-related prices. 'The R208,000 a day was unaffordable, so even if we have to pay R50,000 as a market-related price, that is still a saving compared to R208,000 per day. Therefore, the judgment is not for R73 million.' Additionally, Mhlongo mentioned another case involving a company where it was reported that R500 million was being claimed from the City. He stated that the claim they are aware of from the company is for approximately R41 million. Following the departure of Sipho Nzuza as city manager, the service provider approached the municipality, claiming to have conducted intelligence work on behalf of the municipality. However, the service provider could not provide a contract or evidence of the work performed, stating that it was too sensitive. Mhlongo said, 'We cannot just give money to a service provider when we do not know what work they have done; we could be implicated in having paid our friends, and we advised him to sue. That way, he can present his evidence in court, ensuring a transparent process.' He said the company did take the matter to court and they were now waiting for a court date, adding, in the meantime, they have been bombarded with letters from politicians and the media (about the matter). Mhlongo asserted that it is improper for critics to label court losses as wasteful expenditure. He stated, 'We are defending ratepayers' money, and such actions can never be construed as wasteful.' Mbhele expressed his commitment to defending the interests of ratepayers. He said a few court rulings against the City were being used to paint it in a negative light, adding that the municipality had won the majority of the cases brought against it. THE MERCURY
IOL News
12-06-2025
- Business
- IOL News
eThekwini city manager defends decisions amid court rulings and financial scrutiny
eThekwini Head and City Manager Musa Mbhele and Malusi Mhlongo, the eThekwini Legal and Compliance Services head. Image: Doctor Ngcobo / Independent Newspapers eThekwini Municipality City Manager Musa Mbhele said he has saved the municipality millions of rand by not signing off on documents while wearing a blindfold. Mbhele has come under public scrutiny following three court cases that cost the municipality millions, involving Daily Double Trading 479 CC, Solbeth Security and Risk Management Services, and Bless Joe Trading CC. The Constitutional Court dismissed the municipality's attempt to overturn a prior ruling, which held it liable for R30 million that is owed to a service provider, Daily Double Trading 479 CC, stemming from 2013. Daily Double Trading challenged the municipality's decision to cancel its contracts, and an out-of-court settlement agreement was reached between the parties. However, the city argued that the lawyer who was involved in the agreement had not been authorised to make such a deal. The city challenged the settlement agreement in court, but the courts have ruled against it, and the municipality's latest bid to appeal was dismissed this week by the Constitutional Court, which found it had no reasonable prospects of success. In another case, businessman Siyabonga Xulu is demanding payment of over R413 million due to his company, Solbeth Security and Risk Management Services. Xulu alleged that the municipality refused to pay for the critical security services his company provided to senior officials, including former city manager Sipho Nzuza, dating back to 2019. Lastly, the municipality hired tents and ablution facilities from Bless Joe Trading CC in April 2019 to provide temporary emergency accommodation for flood victims in Tehuis, Umlazi. In court papers, Bless Joe Trading CC provided a marquee, flooring, eight public toilets, and 50 chairs at R190,000 per day for 14 days. In March 2020, the municipality cancelled the contract, stating that they would provide alternative shelter for the flood victims, but Bless Joe Trading CC argued that the marques were not evacuated. In court papers, the company owner alleged that when he went to pick up his marquee and toilets, he was told by the occupants that they would not move because they had not found alternative accommodation. He, therefore, billed the city even though the contract expired, claiming R73 million. Malusi Mhlongo, the Legal and Compliance Services head, and Mbhele addressed key issues affecting the city administration and recent legal matters. Mhlongo said there has been criticism about the conduct of the legal strategy of cases, most of the time directed at the city manager. 'Any decision that the city manager takes, he takes it on my concurrence on the basis of my advice. He relies on me for legal matters,' Mhlongo explained. He said they respected the court's decision and that payment of legal costs to legal practices does not constitute wasteful expenditure because they paid for the service they received. He said that when the City Integrity and Investigations Unit (CIIU) recommended that two contracts be terminated because they found misconduct at Daily Double Trading 479CC, the company then sued the city for R44 million. 'We are paying R30 million and interest to a service provider for no services received, and that is what the city manager is trying to resist. We are paying because it was authorised by a person who was not properly authorised to give that instruction. Nobody had the authority to reach a settlement that was over R5 million without going to council. This was handled by former city manager Sipho Nzuza. The judge ruled on the matter,' Mhlongo said. He said the matter with Bless Joe Trading CC went through the court process, and they were now abiding by the court ruling to pay based on a market-related amount for a year. 'If the market-related value is between R5,000 and R20,000 per day, it will be a saving. If we are unable to agree on what constitutes a market-related amount, we can argue the amount in court,' he said. Mhlongo said the Solbeth matter had a long history preceding Mbhele's tenure in office. 'The service provider indicated that he would not be able to share what he was doing because it was top secret and involved intelligence work. Our hands are tied because we cannot pay for something we do not know about. We are waiting for a court date over the matter,' Mhlongo said. Mbhele said the municipality had won many complex legal battles under Mhlongo's supervision that were not published in the media. "We protected and defended the ratepayers, right up to the Constitutional Court. The city is in a far better position than it would have been if we just signed an agreement blindfolded," he said. [email protected]
IOL News
08-06-2025
- Business
- IOL News
Opposition parties demand action over eThekwini's costly legal disputes
Pressure is piling on eThekwini Municipality mayor Cyril Xaba to take action after the City incurred legal and interest costs after failing to pay a service provider. Image: File Photo Opposition parties in the eThekwini Municipality have called for accountability from the officials who have caused the City to incur costs in a R30 million tender legal battle between the City and the service provider which ended up in the Constitutional Court. Last week, the Constitutional Court dismissed the City's leave to appeal the Supreme Court of Appeal judgment - the City wanted the upper courts to overturn the Durban High Court ruling in 2022 which ordered it to pay Daily Double Trading an amount of R30 million as a settlement to the R43 million claim the company had made for work done. The City's argument was that it did not authorise an attorney who reached a settlement with the service provider therefore it could not be liable for the payment, however, the City did not oppose the matter in court. With the matter dragging on from 2018 at a cost of 10% interest, the City is now liable for an extra R20 million in costs - with significant legal costs on top of this. In the wake of the Concourt decision, the DA on Sunday called for the immediate suspension of City Manager Musa Mbhele and his referral to the Financial Misconduct Board. In a statement, the party said the damages stem from the municipality's 2013 decision to cancel contracts with Daily Double Trading 479CC, adding that courts previously ruled that the cancellation was unlawful. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading 'The DA believes that, as the head of the city's administration, Mbhele has a duty to safeguard public funds and not act recklessly when ratepayers' money is at stake. The party believes that his conduct in this matter warrants a formal investigation by the Financial Misconduct Board and that he should be suspended from his duties pending the outcome. "The City manager had every opportunity to comply with previous court orders related to this matter but refused to, in the process, wasting public money to defend the indefensible,' said the party. Joining the calls, ActionSA provincial leader, Zwakele Mncwango also called on Mbhele to be liable as an accounting officer or else tell the council who had provided legal advice to him to continue defending the matter after several court judgments. Mncwango also questioned the capabilities of the City's legal services unit as the continued dismissal of the case right up to the Constitutional Court meant that the City had been receiving poor legal advice. 'There is a serious problem here, whether Mbhele was appealing this matter (based) on his opinion that the City legal services are incompetent. It is not a legal opinion but a political one,' said Mncwango. The EFF's eThekwini chairperson Themba Mvubu said while his party commended the effort by the municipality to try and save taxpayers' money, there was a need find the officials who illegally authorised to negotiate a settlement with the service provider, without the necessary authority.
IOL News
08-06-2025
- Business
- IOL News
eThekwini City Manager under fire over R53 million payout due to service provider, call for suspension
eThekwini Municipality City manager Musa Mbhele has come under fire after the Constitutional Court dismissed an appeal by the City over a contractual dispute with a service provider. As a result, the City will have to pay the service provider R53 million. Image: Supplied / eThekwini Municipality eThekwini Municipality City Manager Musa Mbhele has come under fire with an opposition party calling for his suspension following a recent court order which requires the City to pay a service provider R53 million. The Democratic Alliance (DA) in eThekwini has demanded that Mbhele be placed on immediate suspension and referred to the Financial Misconduct Board. This demand comes in the wake of a Constitutional Court decision that dismissed the municipality's attempt to overturn a prior ruling, which held it liable for R30 million in damages. The damages stem from the municipality's 2013 decision to cancel contracts with Daily Double Trading 479CC. Courts previously ruled that the cancellation was unlawful, and the municipality's latest bid to appeal was dismissed this week by the Constitutional Court, which found it had no reasonable prospects of success. Lawyers for Daily Double Trading have given the City five days to pay or risk having their assets seized by the sherrif of the court to the value of the judgement. 'The DA believes that, as the head of the city's administration, Mbhele has a duty to safeguard public funds and not act recklessly when ratepayers' money is at stake. The party believes that his conduct in this matter warrants a formal investigation by the Financial Misconduct Board and that he should be suspended from his duties pending the outcome. He had every opportunity to comply with previous court orders related to this matter but refused to, thereby wasting public funds defending an indefensible position," said councillor Thabani Mthethwa in a statement. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Last week, in a statement, eThekwini mayor Cyril Xaba said he fully respects the decision of the apex court. Once again, I accept the court's decision and await the finalisation of the quantum. I have already initiated a process to review how and why this happened, including the legal advice provided to the City. This will allow Council to determine what consequence action should be taken and how such monies can be recovered,' he added. He said where consequence management or recovery of state resources is recommended, such will be applied without fear or favour. 'This is an effective way of rooting out collusive corruption and other malfeasances.' THE MERCURY
IOL News
07-06-2025
- Business
- IOL News
Constitutional Court dismisses eThekwini Municipality's appeal over R30 million payout
eThekwini City Manager Musa Mbhele. Image: Supplied The Constitutional Court has dismissed eThekwini Municipality in its long legal battle over R30 million payout to the service provider, Daily Double Trading 479 cc /Pholobas Projects. The municipality had approached the apex to appeal an earlier Durban High Court and Supreme Court of Appeal ruling that favoured the service provider. The Constitutional Court said the application brought by the municipality bears no reasonable prospects. The city revoked its contracts after discovering anomalies in the company's tender award during its investigations a few years ago. It was reported that in 2021, the company took the municipality to the Durban High Court, demanding that the cancellation of the contracts and blacklisting be declared unlawful, and for the court to rule that the municipality was indebted to it in the sum of R44.1m the amount owing for the cancelled contracts. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ However, before the Concourt could hear the matter, an out-of-court settlement was reached by the parties. A deal was struck where a municipal attorney, identified as Mr Moloi at the time, agreed that the municipality would give Daily Double R30 million as a settlement for its illiquid damages. According to the affidavit of City Manager Musa Mbhele, when this came to the attention of the former city manager, Sipho Nzuza, he refused to approve the R30 million payout. 'He stated he would not approve such a transaction as no one, including himself, had the authority to sanction payments above R30 million. He said whoever had told Moloi to strike a deal with Daily Double had been misguided,' Mbhele wrote in his affidavit. Mbhele stated that Nzuza indicated that this matter would need to go before the eThekwini full council for a decision. 'This matter was never placed before the council, and Nzuza made it clear in his affidavit before the High Court that he had refused to sanction the questionable settlement,' he added. Former eThekwini city manager Sipho Nzuza. Image: Zanele Zulu / Independent Newspapers Mbhele said that to this day, he has no idea who authorised or told Moloi to offer the company R30 million. 'If the municipality were to pay this money, no one would account for it,' he said. Additionally, Mbhele said this case raised questions of law that will impact not only eThekwini Municipality but also other municipalities throughout the country. He said the case required the Constitutional Court to clarify the ambit of an attorney's competency to enter into settlements in respect of municipalities and similar organs of state.
