Court orders former NHLS CEO Mogale to pay R22 million for losses

The National Health Laboratory Service (NHLS) welcomed the Labor Court's decision ordering former CEO Joyce Mogale to pay R22 million to the NHLS for the losses caused by her actions.

The Labour Court dismissed the unfair dismissal claim against the former officials, including the estate of the late Chief Financial Officer, Sikhumbuzo Zulu, who passed away before the court case began.

"The judgment is a victory for governance and recoups losses which the NHLS has suffered as a result of the conduct of its most senior employees," the NHLS said, SA News reported.

The NHLS said that Judge Connie Prinsloo of the Labour Court ruled the dismissal of Mogale and Zulu was fair. The judge described their actions as severe negligence and incompetence, noting they failed to follow the Board's orders and ignored limits set by their authority.

In her ruling, the judge stated they had not followed their employer's lawful and reasonable instructions. She also mentioned that they did not show proper care and called Mogale's conduct "astonishing."

Judge Prinsloo also said that Mogale did not take responsibility for her actions and kept shifting the blame, even onto the media.

The NHLS noted that the Board discovered irregularities in 2017, leading to the suspension and dismissal of Mogale and Zulu in 2019 after a disciplinary hearing. The court upheld their dismissal based on three irregular commercial contracts.

One issue involved Afrirent vehicle leasing, where Mogale approved a R72 million contract without Board approval and beyond her authority. She later increased the contract value to R79 million without following proper procedures.

"She signed a Service Level Agreement with an unwarranted penalty clause which ballooned the cost even further. The Afrirent irregularities led to a judgment that Mogale must pay back R22 million to the NHLS," the entity explained.

In the Blue Future IT equipment issue, the NHLS Board had approved an R25 million procurement. However, Mogale bypassed a competitive tender and procured R83 million worth of equipment, much of which was not related to the original tender.

In the DV8 wide area network issue, the NHLS reported that an R63.5 million addendum to the contract was signed without a tender process and without detailing the goods to be purchased, which opened the door for potential misconduct.

Chairperson of the Board Professor Eric Buch said that when Mogale and Zulu were suspended, the NHLS owed more than R800 million to suppliers, which was more than its available cash.

Currently, Mogale, former Head of Supply Chain Management Graham Motsepe, Manager of Contracts and Tender Compliance Mthunzi Mthimkulu, Legal Manager Sibusiso Mthenjane, and Blue Future owner Kapai Pierre Petersen are on trial in the commercial crimes court in Palm Ridge.

Petersen has been found guilty of fraud related to his tender submission to the NHLS and is waiting to be sentenced. Buch expressed hope that those involved in the Afrirent and DV8 issues will also face charges.