The Limpopo Division of the High Court in Polokwane has ordered Ernest Rachoene, MEC for Public Works, Roads, and Infrastructure, to reinstate Roads Agency Limpopo (RAL) CEO Gabriel Maluleke and the RAL board following their illegal removal. 

This ruling, delivered by Judge Marisa Naude-Odendaal on Tuesday, October 8th, set aside Rachoene’s decision to dissolve the board on 31 July 2024, leading to Maluleke’s suspension on 30 August 2024. 

The dissolved RAL board is led by businessman Matome Ralebipi, who is credited with turning around the once-ailing agency into an effective and well-oiled machine. The court order raises questions about the extent of political interference in public entities’ governance and Limpopo. 

The court order also nullified Rachuene’s decision to replace the RAL board with a one-man board under former ANC Member of Parliament Moses Tseli, appointed as the agency’s “Interim Accounting Authority” with authority to oversee operations pending the appointment of the new board. He immediately appointed Makhitha Chesane as acting CEO.

On September 25, 2024, Maluleke filed an urgent application in the High Court, challenging the legality of the board’s dissolution and his suspension. Maluleke argued that these actions violated the Limpopo Province Roads Agency Proprietary Limited and Provincial Roads Act, 7 of 1998 and the provisions of s17 of the Companies Act, 2008. 

Additionally, he sought to have Tseli’s appointment as the Interim Accounting Authority declared unlawful.

In his affidavit, Maluleke explained that Rachoene’s decision to dissolve the RAL board on July 31, 2024, was made without notice to the board members. 

Maluleke argued that this was in direct conflict with Section 17 of the Companies Act, 2008, which mandates that a director must receive notice of any meeting and resolution considering their removal, and must be given the opportunity to make representations before the resolution is passed.

“On July 2024 the MEC during a pressing briefing announced the dissolution of the Board of the Agency. The MEC purportedly dissolved the board without cognizance of the provisions of s17 of the Companies Act, 2008, which provides that before the shareholders of the of a company may consider a resolution to remove a director – (a) the director concerned must be given notice of the meeting and resolution, at least equivalent to that which a shareholder is entitled to receive, irrespective of whether or not the director is a shareholder of the company; and (b) the director must be afforded a reasonable opportunity to make a presentation, in person or through a representative, to the meeting, before the resolution is put to a vote.” read the affidavit.

Maluleke emphasised that neither he or any of the other board members were informed of any such meeting or resolution, effectively nullifying the legality of their removal.

On August 19, 2024, Rachoene appointed Tseli as the Interim “Accounting Authority” of RAL, stating that the former National Assembly member would oversee operations until a new board could be appointed. 

However, Maluleke contested this appointment, arguing that it was in “direct disregard of the provisions of s12 of the Roads Act.”

Maluleke also argued that Tseli’s decision to place him on suspension on 30 August 2024 was “unlawful and in conflict with the provisions of the Roads Act that provides that the Board may suspend the Chief Executive Officer at the request of the Board.” 

He added that Tseli did not have the authority or powers of the Board.

Furthermore, Maluleke contended that his suspension lacked compliance with the Roads Act in that no process had been followed, he was not informed of the allegations against him, and he was not given an opportunity to respond or defend himself.

“The suspension in case further lacks compliance with the provisions of the Roads Act in that no process has been followed. The purported allegations that led to the suspension have not been put to me nor has any impartial person been appointed to investigate the allegations (whatever they may be) nor have I been given the opportunity to respond to the allegations.” stated Maluleke in his affidavit.

On Tuesday, October 8th, 2024, the Limpopo Division of the High Court in Polokwane ruled in favour of Maluleke, reinstating him as CEO and the dissolved RAL board. 

The court also nullified the appointment of Tseli as the Interim Accounting Authority.

The Limpopo Department of Public Works expressed shock at the ruling and announced its intention to appeal in a media statement released on October 9, 2024.

“The Limpopo Department of Public Works, Roads and Infrastructure has noted with disappointment and shock the order of the Limpopo Division of the High Court made on 8 October 2024 in the matter between Maluleke vs the MEC of the Department of Public Works, Roads and Infrastructure and others” read the statement.

“Immediately after the court outcome the department consulted with its legal representatives for advice, and after the consultation, an advice obtained from Senior Counsel, the Department decided to appeal against the order of the High Court with immediate effect.”

“The Department confirms that the application for leave to appeal, which immediately suspended the order of the Court was filed on 9 October 2024, together with a notice of request for written reasons from the presiding Judge.”