Ingonyama Trust Board (ITB) chairperson Jerome Ngwenya has declared a dispute with the auditor general over its recent adverse finding against the entity, which missed the deadline for submitting its annual financial statement last year.
More than R20-million in funding was delayed over the failure, which has now resulted in Land Reform Minister Thoko Didiza, whose department funds the board, deploying staff to the entity to boost its capacity to deal with its finances.
Didiza has also appointed a land audit team to carry out a survey of the nearly three million hectares of tribally controlled land in KwaZulu-Natal, which the ITB administers on behalf of King Goodwill Zwelithini kaBhekuzulu.
The survey aims to ascertain the value of the land under the board’s control and the revenue collected annually from people living on the land and businesses trading on it.
For years, residents have challenged the ITB’s residential lease programme, backed by several NGOs. The entity faces at least five court challenges from residents and business people allegedly dispossessed of their land.
Reports from two panels appointed by the presidency and parliament have recommended the dissolution or repeal of the ITB, sparking a backlash from Ngwenya, some traditional leaders and the monarch.
ITB fighting everyone
A source at the ITB, who asked not to be named fearing victimisation, said that Ngwenya had declared the dispute following a meeting between the board and Didiza, which had preceded a parliamentary session with the auditor general and the land reform portfolio committee.
“The chairperson doesn’t enjoy a harmonious relationship with the portfolio committee or the auditor general. He has declared a dispute with the auditor general over the most recent audit as he doesn’t agree with the finding or the auditing process,” the source said.
At the parliamentary hearing, Ngwenya noted his intention to dispute the audit finding, which he said was “wrong,” arguing that while the ITB was accountable to parliament and Didiza over its funding, the Ingonyama Trust itself was not subject to the Public Management Finance Act (PMFA).
Didiza’s spokesperson, Reggie Ngcobo, said the minister was aware of Ngwenya’s unhappiness with the auditing process but felt that a dispute was unnecessary.
“The minister does not see a need for him to lodge a dispute. Where the auditor general sees a gap, we must close that gap. There is a mechanism within the Auditor-General Act that says one can engage further. They are within their rights to make use of that,” Ngcobo said.
The office of the auditor general’s spokesperson, Africa Boso, said the ITB had received a qualified audit for 2019-20 because it did not disclose the full extent of its irregular expenditure. Similar findings had been made over the past two years.
The auditor general was aware of the dispute, he said.
“The dispute is receiving our attention, and will be processed through the internal dispute procedures. The dispute relates to the interpretation of the PFMA with the assertion that they are not an entity that has to be audited by the national audit office,” he said.
“The lodged dispute will not have any impact on the audit opinion […] issued by the auditor general as the findings are based on the requirements of the accounting framework, as well as the laws and regulations that govern our operations,” Boso said.
Didiza’s spokesperson Ngcobo also confirmed the deployment of officials to conduct the land survey and assist with getting the ITB’s finances sorted out.
“They were unable to get their financial statement together on time, so we will provide help in the auditing of their books. They lack capacity in that area,” he said.
“The other key area was around the land survey. We need to survey the land they own, so it is easier to know how many hectares they have, [and] the income from it, as they don’t quantify this in the statement,”’ he said.
Ngcobo said the investigation into allegations by traditional leaders that Ngwenya had paid “bribes’’ to certain amakhosi and had enriched himself appointed by Didiza had not been completed.
The move back to level 3 Covid-19 restrictions in December had prevented investigators from visiting several areas to meet with traditional leaders and their communities.
The current interim ITB board was appointed by Didiza last year after the term of office of the previous board came to an end. The lockdown and the monarch’s recent ill-health — who nominates the board’s chairperson — had created delays in appointing a new board, Ngcobo said.
At present, the board has an acting chief executive after Lucas Mkhwanazi retired last year.
Private company created
However, Mkhwanazi was still at the ITB premises this week, where he was contacted by telephone by the Mail & Guardian.
It is not clear what role he is playing there.
In 2019, Mkhwanazi and Ngwenya were registered as the sole directors of Ingonyama Holdings, a private company, which, according to company records, is registered at the ITB’s Pietermaritzburg offices.
It is unclear whether the company was appointed through a board resolution or what exactly it does.
An online search reveals that the company and a US tech company, Quantum Age Corporation, have entered a joint venture, Quantum Zulu.
According to the QZulu website, Ingonyama Holdings “has a mandate to maximise the material welfare and social well-being of the members and constituents of the Zulu Nation, as well as the other communities inhabiting the 2.883-million hectares that it administers in the province of KwaZulu-Natal, South Africa.”
“The goal of Ingonyama Holdings is to ensure the sustainable development of the Ingonyama region.”
Staff at the ITB said that Mkhwanazi had continued to work from the ITB offices despite retiring and had conducted several meetings with investors on the premises.
“This is a real can of worms,” said one staff member. “There are people in and out of here meeting with the former CEO. Nobody knows where this comes from.”
Mkhwanazi refused to comment and referred the M&G to the acting chief executive, Bheki Gabela.
“I’m no longer in that space. I am no longer allowed to comment on those issues. I am not with the ITB, so I don’t want to comment on things I no longer have authority over. I don’t want to be in trouble,” Mkhwanazi said.
Gabela and Ngwenya did not respond to emails and phone calls requesting comment.
If they do respond after publication, their responses will be included to this article.