Transport Minister insists Letsoalo was right to seek 350% salary increase

Transport Minister Dipuo Peters has defended former Passenger Rail Agency of SA (Prasa) acting CEO Collins Letsoalo's move to raise his salary, saying that he shouldn't earn less than his subordinates

Peters’ justification for Letsoalo’s astronomical pay rise was contained in an affidavit filed in the Pretoria High Court on Thursday in response to the former Prasa board’s legal challenge.

She said some employees who were Letsoalo’s subordinates were earning R4 million and as such, he was entitled to receive the R5,9 million package that former Prasa Group CEO Lucky Montana earned.

“Indeed it would have been anomalous for Mr Letsoalo to continue earning an amount of R1,3 million [per annum] when his immediate subordinates at Prasa were earning upwards of R4 million,” she said.

Her comments seem to be contradictory to a secondment letter she signed and sent to the Prasa board in July last year, stating that Letsoalo’s “rank, salary and seniority date remains unchanged” during his secondment period.

Peters argued that the agency’s additional 12% allowance policy allocated for senior management employees in acting positions didn’t apply to Letsoalo because he wasn’t a permanent employee of Prasa.

READ MORE: Former Prasa board to appear in Pretoria High Court

She was responding to a court challenge brought by former Prasa chairman, Popo Molefe, on behalf of the board over her decision to dissolve the board, citing its failure to adhere to good corporate governance practices in its management of the organisation.

Molefe had earlier submitted an affidavit claiming that Peters had ignored a preferred list of candidates the board had suggested to take over as CEO, choosing instead to second Letsoalo, who he says acted with impunity.

“Mr Letsoalo, far from advancing his understood mandate, which was to improve Prasa’s core service and deliver a turnaround strategy, seemingly embarked on a personal campaign to restructure Prasa and enrich himself,” Molefe said, adding that the board had never approved the pay hike.

The matter was set down for Thursday, but was postponed after Advocate David Unterhalter requested a postponement to file an answering affidavit in response to former Prasa acting group CEO, Collins Letsoalo’s intervening affidavit.

He was looking to join the axed board’s application.

In a letter to Webber Wentzel attorneys, Letsoalo’s lawyer argues that his client has a substantial interest in the matter.

Webber Wentzel attorneys are representing Prasa’s former board members, including chair Popo Molefe. They say that Letsoalo identified serious and false allegations which sought to tarnish his reputation in the founding affidavit.

READ MORE: Interim Prasa board appointed

“Your client’s failure to join our client as a respondent has been prejudicial to our client. As a result, our client has decided to make an application to court to be permitted to intervene in the application and to be joined as a respondent,” Letsoalo’s attorneys wrote.

They added that he has been left with little time to file court papers and requested that the matter be postponed until next week.

In a letter to Letsoalo’s attorneys, the board cautioned that should he approach the court to join in as a respondent, he should not prevent the proceedings from being heard.

The former board members warned Letsoalo that they would seek punitive costs against him in his personal capacity, and argued for a finding of contempt of court, should he request a delay.

Molefe was seated in the front row during the short appearance in the packed courtroom.

He filed an urgent application for the court to declare the board’s dissolution unlawful, to reinstate the board members to their former positions, and to prevent an interim board from being appointed.

– With additional reporting by News24Wire