City Power board launches corruption probe after News24 exposé

News24

2 days ago

News24's ongoing Power Connections investigation has seen City Power's board state it will take action.
A string of alleged governance failures has led to the municipal entity being saddled with a negative R16 billion bank balance.
The board hinted that it would wield the axe for what it said were internal control weaknesses at the firm.
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City Power's board of directors announced a sweeping investigation into alleged corruption following News24 reports detailing apparent mismanagement and governance failures at the loss-making power entity.
In a late-night media statement on Tuesday, City Power's board chairperson, Makhosini Kharodi, said the utility's structure 'noted' the latest article of News24's ongoing Power Connections investigation.
On Monday, the Power Connections series revealed an alleged nepotism racket headed by the entity's CEO, Tshifularo Mashava, who allegedly appointed her blood relatives, causing angst among usurped workers.
Kharodi said the board-sanctioned probe sought to strengthen governance, accountability, and integrity within City Power.
'The review, initiated through the Audit and Risk Committee, will focus on the issues highlighted in the News24 article, including allegations of nepotism, unqualified appointments, and internal control weaknesses, as well as other concerns raised in the public domain,' the chairperson added.
The claims of unqualified persons being appointed to senior positions as electrician team leaders come after the SA Municipal Workers' Union (Samwu) had two of its shop stewards and one branch secretary promoted despite not meeting the requirements, including academic qualifications and at least five years' experience.
Samwu's Johannesburg regional spokesperson, Thobani Nkosi, admitted that the three union leaders benefited from what he called 'irregular deviations' that he said City Power's management sanctioned in appointing people who did not meet the team leader requirements.
Moreover, Kharodi acknowledged the electricity company's cash-strapped financial status. The utility is saddled with a more than R16.3 billion negative bank balance as of September 2024, the end of the first quarter of City Power's financial year.
The perilous financial position was contained in official City of Johannesburg reports, which Mayor Dada Morero allegedly concealed from the council and the public.
The chairperson further conceded that there were alleged internal control weaknesses at the company, an assertion echoed by the Auditor-General's November 2024 report, laying bare the struggles of the municipal entity.
The AG's report, which found that the electricity firm made a R2.8 billion loss in the 12 months ending 30 June 2024, recorded that City Power could fail as a company, owing to its liabilities exceeding its assets by more than R1.1 billion.
The November report chastised Mashava and her senior management for handling the entity's affairs. It said there was a lack of 'adequate oversight' regarding compliance with municipal laws and regulations.
The AG added that this followed management's failure to ensure that 'reasonable steps were not taken to prevent' irregular expenditures of nearly R4.9 billion, including fruitless and wasteful spending of more than R150.9 million.
On Tuesday, Kharodi said the company's board took News24's revelations seriously, adding that 'interventions' had begun to fix City Power, including a structural review aimed at enhancing operational efficiency and oversight, and a 'revenue enhancement and protection strategy to address losses and improve financial sustainability'.
On the investigation, Kharodi said: 'The aim of this process is to establish the facts, ensure appropriate consequence management where warranted, and reinforce ethical leadership throughout the organisation.'
He added: 'City Power remains committed to delivering reliable service to the residents of Johannesburg while holding itself to the highest standards of public accountability.'