Is Joburg’s Helen Botes the next Dudu Myeni?

“How do you eat an elephant? Piece by piece,” says advocate Stefanie Fick of the Organisation Undoing Tax Abuse (Outa) about the behemoth task lying before it.

Fick’s group is one of the very few to take an activist stance against crooked officials wasting, or stealing, taxpayer money. In May 2020, it led the campaign to have Dudu Myeni, the disgraced former chair of SAA and one-time head of the Jacob Zuma Foundation, declared a “delinquent director” – a precedent-setting case.

Now, it’s Helen Botes, the longtime head of the Joburg Property Company (JPC), which manages, or rather mismanages, one of the largest state property portfolios: 28,193 properties owned by the city worth, at last count, R9.2bn.

Outa has now launched legal action to have Botes declared a delinquent director under the Companies Act, which, if it succeeds, would make her the second director of a state-owned entity to land this unwanted accolade.

It reckons Botes should be held accountable for the “gross abuse of her position as a director of the JPC”, including negligence, wilful misconduct and taking personal advantage of opportunities in managing the JPC.

Botes has been CEO of the JPC since 2008, and her Teflon-like ability to stay in that role despite a myriad scandals has surprised analysts.

Outa has based its action on just two of these scandals: the Usindiso Building fire in the old Post Office building, which claimed 76 lives in August 2023, and her role in the unlawful purchase of Covid services for the JPC.

Despite the fact that a government-led commission, the Khampepe commission, found last year that the JPC’s board should act against Botes for her “total disregard of managing the Usindiso Building despite knowledge of the disastrous state since at least 2019”, nothing has happened.

And as for the Covid scandal, the Special Investigating Unit (SIU) referred the JPC and Botes to their litigation unit after finding that R18.6m of the city’s money was wasted on cleaning and sanitising services that never came to fruition.

“The law is clear, and so is the evidence,” says Fick. “Helen Botes’s failures cost lives, and accountability is not optional – it is mandatory.”

Though Botes is probably not the only transgressor at the JPC, going after her is the most practical way to seek accountability, says Outa CEO Wayne Duvenage.

“Her name is specifically mentioned in the Khampepe and the SIU reports,” he says.

Duvenage says that were Outa to include all the other directors, each of them could lodge interlocatory applications to have themselves recused, which would drag out the case for years.

Closing loopholes

When Myeni was declared “delinquent” back in 2020, it set an important precedent – but no further rulings have been obtained against other directors who oversaw widescale wrongdoing, partly because of the expense of such a court action.

Vanessa Jacklin-Levin, a partner at law firm Bowmans, said last year that many companies take a commercial decision to “settle” with a rogue director, and let them leave quietly. But this allows that person to hold directorships elsewhere.

To remedy this, Outa plans to set up a “delinquent director unit” to compile cases against other nefarious directors within the public sector. In addition, the unit will try force the authorities to bring their own delinquency charges against those people.

Duvenage says the limitation is that many state-owned entities aren’t governed by the Companies Act, so the board members of these entities “cannot be declared as delinquent directors”.

This means that board members of any entity governed by the Public Finance Management Act (PFMA), or organisations governed outside of the Companies Act, can ostensibly behave as they want, facing few repercussions as directors.

This is a serious limitation, given that most public entities, such as the National Lotteries Commission, SA Tourism, the Sector Education Training Authorities and the Road Accident Fund, to name just a few, are governed by the PFMA.

Outa isn’t content to let this lie. Duvenage says the organisation has its sights set on these PFMA-governed bodies next, in which they hope to make the case that directors of these entities should also be declared delinquent.

“We want to close that loophole. Our papers are being finalised, and we will be filing this in due course,” says Duvenage.

Outa served Botes with the legal papers on Wednesday, and she has 10 days to file a notice of her intention to defend. By the time of publication, she had not issued any response.

While it is hoped more delinquency actions follow, the lack of action in the courts in recent years has not been encouraging.

Parmi Natesan, CEO of the Institute of Directors, a voluntary professional body, has argued that more mechanisms are needed to hold errant directors accountable, beyond simply declaring them delinquent.

Addressing parliament last year, Natesan said a professional body should be set up to license directors to practice. This would make it easier to hold them accountable for wrongdoing, in the same way that accountants are held accountable.

“The new body would ensure standards are upheld, that knowledge and skills are vetted and kept up to date and that directors abide by a code of conduct, failing which their licence to practice could be removed,” the institute argued.

_{Top image: Helen Botes. Picture: Gallo Images/Frennie Shivambu; Rawpixel/Currency collage.}