Auditors to examine tender process, 'unfair appointment'
Auditors Ernst and Young have been appointed by Phalaborwa Mining Company (PMC) to probe allegations of corruption, nepotism and racism against the Palabora Foundation, a developmental organisation under the auspices of PMC.
Ernst & Young, which specialises in fraud investigations, started probing the foundation last week. They will report to the foundation's board of trustees, which will in turn forward the report to PMC.
The investigations, confirmed by the board of trustees, come after the foundation was rocked by allegations of corruption in a tendering process early this year. A lucrative tender involving several thousands of rands was awarded to Ilanga Construction.
However, it was alleged that proper procedures were not followed in the adjudication process.
In less than two months, the foundation was again rocked by allegations of racism after a white manager was controversially appointed at Ilanga.
Sources within the foundation again claimed proper procedures were not followed when the appointment was made.
They claimed the post was not advertised, a short-list was not drawn up and interviews were not conducted.
Shortly after the appointment, the manager's daughter was allegedly offered a job at the Bollanoto Tourism Centre. Bollanoto is a division of the foundation dealing with tourism and hospitality in Phalaborwa.
Mark Demmer, director of the foundation, described the allegations as "null and void"
Chairman of the foundation's board of trustees, Charles Ausobontent confirmed that investigations were under way.
Ausobontent also confirmed that both PMC and Rio Tinto, its global parent company based in the UK, together with the board of trustees of the Palabora Foundation, were worried about the negative publicity since the allegations emerged.
"We will leave no stone unturned and will report back to the media as soon as investigations have been completed," said Ausobontent.