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Allegations of fraud lead to resignation

By unknown | Nov 14, 2006 | COMMENTS [ 0 ]

Karin Johansson

Karin Johansson

Cellphone operator MTN said yesterday that its South Africa managing director Maanda Manyatshe had resigned with immediate effect after allegations made in the Mail & Guardian newspaper that he was involved in fraud while heading the South African Post Office.

"I am cognisant of the possible negative effect the allegations related to my tenure at the South African Post Office might have on a listed company such as MTN. I have therefore decided to resign as managing director of MTN South Africa to protect and uphold MTN's reputation and image," Manyatshe said.

"This will also afford me the opportunity to focus on and consider the legal matter in my private capacity."

Phuthuma Nhleko, MTN president and chief executive, said: "I support and respect Maanda's decision to act in the interests of the company. Maanda joined MTN Group during a challenging period and his management of the operation has been exemplary."

Brian Gouldie, MTN South Africa's consumer business executive has been appointed as acting managing director of MTN South Africa.

Manyatshe is currently involved in a legal battle with the Post Office, where he was chief executive before joining MTN in 2004.

His dispute with the postal service came to light in September when the Mail & Guardian published an article in which Manyatshe was accused of pushing through a R100million, and potentially more than R2billion, deal without a tender process, while he was head of the South African Post Office.

Khutso Mampeule, Manyatshe's successor at the post office, has laid criminal complaints against Manyatshe, two other former post office executives and Vision Design House, the company that got the contract.

The Mail & Guardian said Mampeule finally cancelled the deal in October last year, amid allegations that post office tender regulations and board decisions were ignored and costs to the post office were fraudulently inflated by Vision Design.

Manyatshe had sought to prevent the Mail & Guardian from publishing the story, with his legal team arguing that his rights to privacy, dignity and reputation should outweigh the Mail & Guardian's right to free speech. But Judge Suretta Snyders dismissed, with costs, the interdict application brought against the paper and the article was published the next day, on September 22.

Snyders ruled that the media had a constitutional duty to help in uncovering wrongdoing and bringing it to the attention of the public. She said that the seriousness of the allegations against Manyatshe, his failure to give a proper response to the Mail & Guardian or in his version to the court, and his public stature "persuades me of the reasonableness" of publishing the expose.

MTN shares jumped more than 4 percent shortly after the news of Manyatshe's resignation as investors showed their support for the decision. - With Reuters and Sapa


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