Third time unlucky for corruption charged Mhlathuze Water boss

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Former Mhlathuze Water chief executive Mthokozisi Duze allegedly ran the entity as a personal fiefdom, removing supply chain management (SCM) staff to manipulate procurement processes and tender awards from as far back as 2016.

Duze survived at least two internal investigations sparked by whistleblower complaints — one in 2016 and another in 2019 — before eventually being placed on suspension last year by the water board in northern KwaZulu-Natal and being arrested over corruption totalling R37 million.

Whistleblowers had accused him of forcing out SCM staff who were unwilling to go along with his activities, which allegedly included him being awarded two bonuses totalling R1 million in a single year, but Duze had dismissed their allegations as an attempt by aggrieved former staffers to smear him.

According to internal documentation, Duze was cleared by successive Mhlathuze boards in 2016 and in 2019, but was placed on suspension along with several other staffers in December 2021.

Duze, who resigned in December, is out on bail over irregular legal services contracts awarded during the Covid-19 lockdown, along with lawyer Ralph Mhlanga, Nonhlanhla Mkhize, the director general in the office of KwaZulu-Natal premier Nomusa Dube-Ncube, and several other people.

Mkhize, Mhlanga, Duze and co-accused Sipho Mabaso also allegedly attempted to intimidate Mhlathuze board chairperson Thabi Shange to stop her from acting on a forensic investigation the entity had appointed into Duze.

A November 2019 complaint to the Mhlathuze board by former employees, submitted through the whistleblowers’ ethics hotline, points towards earlier malfeasance on the part of the former chief executive.

The 2019 complaint, which Mail & Guardian has seen, claims that Duze had “terrorised” supply chain management staff since his arrival on secondment for three months from the cooperative governance and traditional affairs department in 2016.

The complaint was sent to the chair of Mhlathuze’s audit and risk committee, Mxolisi Xulu, who was asked by the whistleblowers to call in the auditor general and other external agencies and commission a forensic audit of the entity’s spending under Duze’s tenure.

In the complaint, the former staff members said that they had taken a “moral” stand to “expose the serious irregularities and shenanigans” taking place at Mhlathuze Water under the leadership of Duze.

They accused Duze of “instilling fear and panic among employees so as to create a state of confusion and paralysis” on their part.

“That is when he masterminds his dodgy dealings because even if people do see what he is doing, they would be scared to death to tell anyone.

“Since he joined Mhlathuze Water, skilled and experienced employees are being forced to leave in droves in the name of consequence management and ridding the organisation of incompetent and or corrupt individuals,” they said.

They said that two service providers based in Durban and Pietermaritzburg, which were “very close” to Duze, were being used to conduct disciplinary hearings and investigations against staff members to remove them and make way for more malleable replacements.

They were also being used to fleece Mhlathuze by inflating their bills and, as a result, the entity’s legal bill had tripled.

“There are two particular service providers which get the lion’s share of the disciplinary work done at Mhlathuze Water; be it disciplinary hearings or investigations. Invoices are then submitted with abnormally high figures and sometimes without a breakdown of the activities carried out,” they said. “The legal bill has doubled, if not tripled, since.”

They also questioned the procedures followed regarding the appointment of Duze to oversee a R140 million drought-relief programme on the department’s behalf.

Duze had been appointed with no security clearance and no vetting process had been carried out by Mhlathuze or at its request.

“Till today, his security clearance is yet to be received. 

“He is no doubt widely connected politically, socially and otherwise and he cunningly and surreptitiously uses these connections to fend off any allegations against him at any time.”

The former Mtlathuze staffers said Duze had been awarded two bonuses totalling more than R1 million in the course of a year and expressed concerns that some of the board’s members might have been “captured” by him and his associates.

They also said Duze enjoyed a “flamboyant lifestyle” and boasted about his wealth, and was a “law unto himself” at the entity.

“No one can stand up to him, including the board members,” they said.

Duze was apparently asked to make written representations to the Mhlathuze board in response to the whistleblowers’ complaints.

In his submission, Duze dismissed the allegations, saying that they were a repetition of claims made by staff during 2016 and over which he had  been cleared by the previous Mhlathuze board.

“I note with dismay that the whistleblower report resurrects allegations that were contained in a whistleblower report that was submitted in October 2016, three months after I arrived at Mhlathuze Water,” Duze said.

“It is disheartening that the whistleblower persists with his or her attempts to derail the organisation into being leaderless in administration and to force the organisation to incur exorbitant costs investigating unfounded, vague and vexatious allegations against me,” he said.

He said the whistleblowers “make numerous unfounded allegations, and without a shred of evidence demand people to be suspended and a forensic investigation” undertaken.

“This is an extraordinary sense of entitlement. It is not for me to prove my innocents [sic] but the onus is on the whistleblower to prove the allegations prima facie at least,” Duze said.

He denied “each and every allegation” against him and said that the claims were a pushback by staff members because of the clean-up he had conducted at Mhlathuze since his arrival.

Duze, Mkhize, Mhlanga and Mabaso are out on bail over the attempt to intimidate Shange, in which Mabaso allegedly impersonated a National Intelligence Agency official and said he had been sent by the premier’s office to retrieve a forensic audit report into R37 million in irregular payments made to Mhlanga during the Covid-19 lockdown.

Duze and Mhlathuze chief financial officer Babongile Mnyandu were arrested in September 2022, several months after they were placed on suspension by the water board, which provides municipalities in north KwaZulu-Natal with water.

In December, the Asset Forfeiture Unit seized homes and luxury 

vehicles belonging to Mhlanga, Duze, Mnyandu and others in an attempt to recover the losses sustained by the state during the looting by the group.

Mhlathuze’s spokesperson, Siyabonga Maphumulo, said that the entity had received “a number of allegations” against Duze.

“These were investigated and flowing from the outcome of these, disciplinary and legal steps were taken. The chief executive has since resigned from Mhlathuze Water,” Maphumulo said.

Last year, Water and Sanitation Minister Senzo Mchunu announced that he plans to merge the board of Mhlathuze with that of Umgeni Water Amanzi, the province’s other water board, in a bid to improve the efficiency of administration and water delivery.