Legal showdown over the reinstatement of corruption-accused CFO in major South African town
A fierce legal and political battle is erupting in the City of Matlosana following a controversial council decision to reinstate former Chief Financial Officer (CFO) Mercy Phetla.
She was dismissed in January 2026 following a disciplinary inquiry into allegations of serious fraud and corruption.
However, Phetla was voted back into office on Tuesday, 4 February 2026, by a coalition of political factions comprising factions of the ANC, the EFF, the PA, and the ACDP.
The move has sparked immediate threats of criminal charges and warnings of a legal crisis in the financially distressed municipality.
The reinstatement resolution was passed during a marathon council meeting, with 34 votes in favour and 25 against.
The proposal, led by the Single Whip of Council Rose Tabanchu, instructs the Municipal Manager to reverse the enforcement of the disciplinary findings and withdraw the termination letter issued to Phetla last month.
The council’s decision comes despite the fact that Phetla was officially dismissed on 23 January 2026 after an independent disciplinary process found her guilty of gross misconduct.
The resolution has been described by critics as a “defiance of law,” with opponents arguing that the council acted outside its legal authority.
The municipality did not respond to queries from Newsday by time of publication.
Legal showdown
The Democratic Alliance (DA) has condemned the reinstatement vote as illegal, arguing that the council has no jurisdiction to act as an appeal body for disciplinary hearings of senior managers.
DA caucus leader Gerhard Strydom claimed that the Disciplinary Regulations for Senior Managers are clear: once a presiding officer makes a determination, the council cannot interfere.
“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,” Strydom said.
He added that the resolution requires the Municipal Manager to rectify “nonexistent” mistakes, which constitutes an illegal instruction.
The DA has announced it will lay criminal charges against the council members who voted for the resolution under Section 119 of the Local Government Municipal Systems Act 32 of 2000.
The party notes that the Speaker, Stella Mondlane-Ngwenya, allowed the motion to proceed despite receiving a written explanation from the presiding officer confirming the council’s lack of authority in the matter.
A showdown is now expected between the council and the administration. The Speaker is set to request that Municipal Manager Lesego Seametso reverse the termination.
However, the DA has warned that any implementation of the resolution by the Municipal Manager would be unlawful.
As the opposition prepares to file charges, the municipality faces a period of intensified instability, with the governance of a vital town hanging in the balance.
The scandal
The controversy surrounding Phetla is rooted in the so-called “Variegated” scandal, a corruption saga that has plagued the municipality since early 2024.
Phetla was arrested by the Hawks in January 2024 regarding allegations that she received a VW Amarok bakkie worth R1.4 million from a service provider, GMHM Construction and Projects, without declaring it as a gift.
As investigations deepened, Phetla and several co-accused were implicated in payments totaling more than R6 million to Variegated (Pty) Ltd for electrical materials.
Investigators described these transactions as “ghost deliveries,” alleging that the goods were paid for but never arrived.
In late 2025, the Asset Forfeiture Unit obtained a preservation order to seize luxury assets worth approximately R2.7 million linked to Phetla, including a Maserati Levante, a Range Rover, and a Mercedes-Benz.
A municipal disciplinary inquiry chaired by Advocate S. Sethene concluded in December 2025 that Phetla’s actions were not merely administrative errors but “calculated acts designed to defraud the municipality”.
The report upheld five charges, including the unauthorised payment of R2.9 million for undelivered materials, exceeding delegated authority, and irregular acceptance of gratification.
The presiding officer’s report explicitly warned that Phetla “cannot be left anywhere near the municipality’s purse”.
Political fractures
The vote has exposed deep factional battles within the ANC. The move by local councillors to reinstate Phetla appears to defy the ANC North West provincial leadership.
In late January, ANC Provincial Chairperson Nono Maloyi explicitly warned councillors to uphold constitutional processes and stated that the party would not interfere with the disciplinary outcome,.
The reinstatement raises fresh concerns about the ability of the municipality to restore financial stability.
Matlosana is currently under provincial intervention and faces severe financial strain, including a debt of around R1.5 billion owed to Eskom.
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Political appointments in South Africa do not take education, experience or any other factor that would be considered prudent in many many other countries.
Instead, our appointments are based on who is friends with who and they are transactional in nature – “If I appoint you, what will you do for me?”, “Remember that thing I did for you, I now want you to appoint me” and so on.
This goes a long way to explain the complete break-down of South African infrastructure. Little or no maintenance, little or no new infrastructure. But that does not matter as long as the connected people drain the money for their own purposes. Luxury car dealerships are not complaining.
Whether someone is accused or guilty of crimes, serious or not, is not one of the criteria taken into account when appointing positions.
The fact that ANC, the EFF, the PA, and the ACDP voted her in comes as no surprise.