Council votes to reinstate corruption-accused CFO of vital South African town

The City of Matlosana’s council has voted to reinstate former Chief Financial Officer Mercy Phetla, reigniting a politically charged corruption saga that previously led to her dismissal earlier this year.

Phetla was officially dismissed in January 2026, following an internal disciplinary process linked to serious allegations of corruption, fraud, and gross misconduct.

Her reinstatement, voted for through a council vote made up of factions in the ANC, EFF, and the PA on 4 February 2026, has immediately raised fresh concerns about political interference and the municipality’s ability to restore financial stability amid ongoing provincial intervention.

The vote was 34 in favour of rejecting the report that led to her dismissal, and 25 against.

Councillor JM Mosupa, seconded by M Mangesi, requested the division. The speaker, Stella Mondlane-Ngwenya, is now set to request that the Municipal Manager (MM) reverse her enforcement of the findings of the damning disciplinary report.

The resolution also instructs the MM to reverse the termination letter sent to Phetla.

This vote for a reinstatement comes despite strong assurances from the ANC in the North West that it would not interfere with the outcome of the disciplinary process and would allow the council to act in accordance with the law.

In late January 2026, ANC Provincial Chairperson Nono Maloyi told Newsday that councillors should uphold constitutional and legislative processes when dealing with the damning disciplinary report against Phetla.

He warned that any councillor undermining the rule of law would be dealt with decisively.

At the time, the party insisted it respected municipal autonomy and had no authority to intervene in internal disciplinary matters.

The saga surrounding Phetla dates back to January 2024, when she was arrested by the Hawks over allegations that she received a VW Amarok bakkie worth about R1.4 million from GMHM Construction and Projects.

The company was a service provider doing business with the municipality, and she allegedly failed to declare the vehicle as a gift. She was bailed out by the son of one of the directors of the service providers.

The controversy deepened over the course of 2024 and 2025, as Phetla and several co-accused were implicated in what has become known as the “Variegated” scandal.

In that matter, the municipality allegedly paid more than R6 million to Variegated (Pty) Ltd for electrical materials and services that were reportedly never delivered, with investigators referring to the transactions as “ghost deliveries”.

In late 2025, the National Prosecuting Authority’s Asset Forfeiture Unit also obtained a preservation order to seize assets worth approximately R2.7 million linked to Phetla and her co-accused.

Among the assets listed were luxury vehicles, including a Maserati Levante, a Range Rover and a Mercedes-Benz.

The municipality did not respond to questions from Newsday by time of publication. Comment will be added if received.

‘Calculated acts’ of misconduct, not negligence – report

A disciplinary inquiry finalised in late December 2025, chaired by Advocate S. Sethene, produced a comprehensive and highly critical report on Phetla’s conduct.

Phetla has consistently denied wrongdoing, describing the charges as politically motivated, even as investigations and legal processes continue.

Regardless, the report concluded that her actions did not amount to administrative errors but were “calculated acts designed to defraud the municipality”.

Among the charges upheld in the report were:

• Unauthorised payment of R2.9 million to Variegated (Pty) Ltd for electrical materials not delivered.
• Exceeding delegated authority by approving large transactions without the municipal manager’s consent.
• Wasteful expenditure of hundreds of thousands of rands on undelivered goods.
• Irregular acceptance of gratification — notably a R1.4‑million VW Amarok bakkie from a municipal service provider.
• Bringing the municipality into disrepute amid extensive media coverage of her criminal charges.

The report’s severity was underscored by a warning that Phetla “cannot be left anywhere near the municipality’s purse” following the findings.

The disciplinary outcome set the stage for bitter political conflict within the council.

A council sitting scheduled for 22 January 2026 to resolve the matter collapsed amid reports of an internal ANC factional battle, with claims that senior officials attempted to block the dismissal by disputing the validity of the charges.

After the deadlocked council meeting, Municipal Manager Lesego Seametso moved ahead with administrative action.

On 23 January 2026, Phetla was issued with a formal termination letter, with her removal framed as a necessary intervention to restore governance in a municipality already facing severe financial strain, including debt of around R1.5 billion owed to Eskom.

Responses from the opposition

The reversal comes amid ongoing factional battles within the ANC and concerns over governance stability in a municipality already under provincial intervention and struggling with financial distress.

Critics argue the reinstatement undermines both administrative due process and the disciplinary findings, while supporters within council have framed it as a corrective response to procedural irregularities in how the dismissal was handled.

DA caucus leader Gerhard Strydom expressed his dissatisfaction, saying that “notwithstanding that the council does not have any jurisdiction in the matter, the report of the presiding officer was rejected and voted for by the ANC corrupt faction, EFF and PA.”

“The resolution entails that the municipal manager must rectify the mistakes, which are nonexistent, and reinstate the CFO, which she cannot do, as it is an illegal resolution.”