The Minister of Communications and Digital Technologies, Mr Mondli Gungubele has this morning, Thursday 14 September 2023, removed the Board of Directors of the South African Postbank following the pre-emptive resignation of some Non-Executive Directors ahead of today’s Annual General Meeting of the Postbank.

The removal of the Board follows damning allegations from a forensic investigation report by KPMG that the Postbank has continued to use service providers that have not been lawfully contracted. These service providers were being paid millions without valid contracts and proper procurement processes being followed. The forensic report recommended that the shareholder must act against the Board of Directors, a recommendation that was supported by Senior Counsel’s legal opinion, taking into account the details contained in the report.

In light of the forensic report, the Minister followed due process and indicated his intention to make his final decision at today’s AGM in terms of Section 71 of the Companies Act which sets out the process a shareholder must follow to remove directors. The Board of Directors tendered their resignation on 12 September 2023 ahead of today’s AGM. The only remaining Non-Executive Director was removed by the Minister at this morning’s AGM in line with Section 71 of the Companies Act.

Prior to the forensic report, the Minister had several engagements with the now former chair and the full board concerning governance matters which, if not attended to, will impede the ability of the Postbank to continue its journey to a full banking license in the interest of the Postbank being a developmental state bank.

The Minister further condemns the public stunts of leaking documents and refutes with the contempt they deserve the spurious allegations on his person by the former board members in their letter that they chose to leak via WhatsApp groups. The Minister has no intention to engage on these as they are void and without substance and would detract him from his singular commitment to ensure that the Postbank becomes a quality state bank to promote financial inclusion ensuring that the unbanked and the underbanked masses of the people of South Africa have access to bank accounts, bank facilities as well as financial services of any kind.

As required by the Postbank Act, the Department has issued an advertisement for the appointment of a new Board of Directors and will seek the opinions of the relevant regulatory authorities on the suitability of members to be appointed.

To avoid a vacuum in governance, and in accordance with section 25 of the Postbank Act, the Minister has appointed Mr Khayalethu Ngema as the administrator of the Postbank pending the appointment of the new board.

“Mr Ngema has extensive experience in leading complex and large public sector organisations through difficult turnarounds and corporate stabilisation. In addition, he has had to lead various programs of operational improvement and service delivery innovation. As he will assume the role of the Board, he will work closely with the recently appointed Chief Executive Officer, Ms Mbengashe and her management team in turning around the Postbank,” said Minister Gungubele.

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Issued by the Department of Communications and Digital Technologies

Download Document here: Minister Gungubele acts to stabilise the Postbank by making changes to the Board of Directors