The appointment of an administrator to Enoch Mgijima Local Municipality (EMLM) saved former mayor Luleka Gubhula and Municipal Manager (MM) Nokuthula Zondani from facing jail time after a full bench of Makanda High Court judges ruled in their favour on an appeal.
The municipality was the first appellant, Gubhula and Zondani second and third respectively.
This follows a ruling by judge AJ Mfenyana that Gubhula and Zondani were in contempt of a high court order dated back to December 12, 2019 for failing to abide by the order of a payment plan to Eskom. The debt at the time was estimated at R265-million. They had been taken to court by Border Kei Chamber of Business, Twizza (PTY) LTD and Crickley Diary (PTY) LTD, Farmhouse Frozen Foods CC, King Fisher Industries CC and Sightful 142 CCt/a Shell Ultra City.
The order by Mfenyana stated that Gubhula and (Zondani) be held in contempt of court and that (Gubhula) and (Zondani) be committed prison for a period of 12 months.
“They were also supposed to pay for the costs. The outcome of this application is that the parties reached a settlement agreement that was made an order of the court by Mfenyana AJ. The order incorporated an acknowledgement of debt by the municipality to Eskom as well as a carefully crafted payment plan vis-à-vis themselves that would in the parties’ view provide a panacea to the problem and avert certain disaster,” the judgement read.
In their unanimous judgement, Judges Belinda Hartle, Richard Brooks and Sunil Rugananan noted that, “With regard to the terms of reference of the administrator she (Zondani) suggested that it was really no longer in the hands of the appellants to carry forward the implementation of the Mfenyana order since, and because of, his official appointment. In other words, it was out of her (Zondani) hands or sphere of influence how and under what circumstances its indebtedness to Eskom might be liquidated since the administrator had assumed responsibility for the implementation of the financial recovery plan.”
It however also emerged that the municipality had failed to disclose it had received its Equitable Share from National Treasury to the amount of R89 million leading to Mfenyana to believe that the conduct demonstrated beyond a reasonable doubt that the non-compliance with the order was willful.
The trio of judges ordering: “The appeal is upheld. The order of the court below is altered to simply read as follows: “The application is dismissed.”
