Estate Agency Affairs board CEO wants former member declared 'a delinquent director'

Image: 123RF/ginasanders

A former board member of the troubled Estate Agency Affairs Board has been accused of causing the agency to lose more than R2 million through irregular contracts and overspend budget.

The agency's CEO Mamodupi Mohlala levelled these allegations against Sedzani Mudau who resigned over a week ago as board member and chairperson of its  Audit and Risk Committee (ARC).

Mohlala said she has approached the courts to declare Modau a delinquent director for allegedly failing to perform in her fiduciary duties leading to the organisation suffering losses amounting to R2.4m. 

But Modau has denied the allegations and hit back at Mohlala whom she said was driving a "personal attack" against her. The troubled state agency falls under the department of human settlements and its mandate is to regulate and control certain activities of estate agents in the public interest.   

It has been plagued by internal battles among executives in recent months. In the latest saga, Mohlala wrote a letter to board in response to Mudau's resignation accusing her of jumping ship after subjecting the organisation to losses allegedly due to the bad advice given over an internal audit tender. 

"Ms Mudau, a chartered accountant, who has been chairing the ARC since 2018, failed in her fiduciary duty as defined in the Companies Act 2008 allowing the irregular appointment (of a company to render internal audit services) as such I initiated a court process to declare her a delinquent director," Mohlala said. 

Mohlala said some of the losses include the awarding of a R3.7-m internal audit contract which auditors found it to have been irregularly awarded, and when it was canceled more than R1.5-m had been spent on it already.  She said the committee Mudau chaired had overspent on its R333 769 budget by 109% due to holding extended meetings. 

"An example of the bloated claims from Ms Mudau, who is self employed, is an amount of R31 000 charged for a meeting that was stretched over three days for the same subject matter," Mohlala said in her letter. 

Mudau has threatened to take legal action against Mohlala for making the allegations. "The allegations by CEO are nothing but another personal smear campaign as alluded in my resignation letter," Mudau said. 

On March 15, in her resignation letter, Mudau had accused the board of failing to hold Mohlala accountable and of allowing her to make personal attacks on her.

"The ARC has four astute professional members; recommendations made are that of the committee as a whole and not me. The board is yet to indicate that we have given them wrong advice on anything." 

Mudau said some of their meetings had to overrun because they were dealing with incomplete submissions from management.   

"The current environment of impunity with no consequences has become a professional reputational risk, which is beyond my risk appetite for such assignments," Mudau said in her letter. 

"In my assessment, it has become very clear that the Board of EAAB is either incapacitated or unable to hold management to account."​

Board chairman Nkosinathi Biko; "the assertions in the correspondence by Ms Mudau were yet to be tested. For this reason they will be subjected to the normal processes of the board in order to settle facts from the allegations." 

He said the email attributed to Mohlala which is a supposed response to Mudau's letter is "as unfortunate as it is deplorable."

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