Minister allegedly signed Land Bank contract illegally
Publish date: 16 July 2008
Issue Number: 2111
Diary: Legalbrief Today
Category: Corruption
Land and Agriculture Minister Lulu Xingwana's insistence that she has never interfered in the Land Bank's affairs is contradicted by documents Business Day says it has in its possession showing she signed a contract on the bank's behalf, binding it to a financial transaction.
In a letter dated May last year, Xingwana engaged auditing firm Deloitte & Touche to conduct a forensic investigation into financial management at the bank. The report says the bank's legal department later twice obtained independent legal opinion warning Xingwana had no power to sign a letter of engagement for the bank, and that doing so invalidated the Deloitte contract. 'Based on provisions of the Public Finance Management Act, the Minister has no power to bind the Bank to any transaction,' the legal opinion states. 'The appointment of the auditor was illegal.' Xingwana's decision has cost the bank dearly. Correspondence shows Deloitte initially estimated the job would cost R2.5m, but the final payment apparently topped R6m. Full Business Day report
