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Nelson Mandela Bay Municipal Manager, Dr Noxolo Nqwazi, has been suspended on full pay after the majority of councillors voted in favour of suspension and also possible disciplinary action.
Council proceedings were behind closed doors on Friday as the matter was placed on the "green paper" which means the public and media were excluded from the debate.
Nqwazi is currently on trial along with several co-accused in a multi-million rand toilet tender saga in which she faces charges of fraud and corruption.
Chief Operations Officer, Sidim Dyani, has been appointed as the Acting Municipal Manager.
ACDP councillor, Lance Grootboom, told Algoa FM News that the item was tabled by the current governing coalition and supported by 62 councillors.
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He said opposition parties, which included the ACDP, DA, Good Party, and DOP, voted against the item, while the UDM abstained and the Freedom Front Plus was not represented at the meeting.
Grootboom said they opposed her removal on the basis that it item table was "incompetent" in terms of procedure, and there was no "evidence in the report" to warrant Nqwazi's suspension.
He said the Council decision could open the City up for further legal challenges.
Council Speaker, Eugene Johnson, confirmed the "precautionary suspension" of Dr Nqwazi, which she said was based on an SIU report.
She said it was also to show the Minister (of Finance) that the City was acting on his correspondence calling on the city to place the matter before Council.
Johnson would not be drawn to comment any further.