The board of the Passenger Rail Agency of South Africa (PRASA) has instituted an internal inquiry into its chair Leonard Ramatlakane following a report that he moved his family into a luxury house belonging to the State-owned company.

The Sunday Times reported at the weekend that Ramatlakane moved into the house in Newlands, Cape Town because his own home was undergoing renovations, and he ended up hosting a 70th birthday party there. According to the report, the home is meant to be used by its execs on work trips, to avoid hotel costs. PRASA recently spent R2.5-million on upgrading the house.

PRASA told the Sunday Times that he was renting the home with a lease valid from December to February, but that this was later extended to March.  

The agency then said in a statement on Thursday that its board had an urgent meeting in the week and "after much deliberation, the board resolved to refer the allegations for an internal inquiry, in line with applicable PRASA policies and the law."

A report is expected in the next two weeks, and if the findings "affect the chairperson", they will be referred to the minister of transport to make a decision.

"PRASA is focused on successfully executing its mandate. In discharging our fiduciary duties and in line with the board charter, we must ensure that our members comply accordingly and uphold a high standard of integrity and vigilance", one of the board's directors, Ndidi Mpye, said in a statement.

PRASA suffered a loss of R1.9-billion in 2020/21, with its revenue declining by R500-million.

It is currently in the midst of a legal battle over its decision to suspend its head of legal, Martha Ngoye, who exposed alleged corruption at the agency.

Ramatlakane approached the Johannesburg Labour Court earlier in February to take an arbitration award that made findings in Ngoye's favour on review.

In February, PRASA's former interim chair Judge Tintswalo Nana Makhubele faced a Judicial Conduct Tribunal hearing into allegations of gross misconduct.

Makhubele has been accused of breaching the separation of powers principle by serving as a High Court judge while in the position of PRASA chairperson.

She is also accused of improper conduct while serving as PRASA chairperson. This was after Civil society organisation #UniteBehind lodged a complaint with the Judicial Service Commission three years ago.

Ngoye testified against Makhubele at the tribunal hearings.