Eastern Cape Development Corporation (ECDC) CEO Sitembele Mase has been suspended following allegations of unauthorised use of funds, the ECDC board said on Wednesday.

"The board wishes to note that suspension is a neutral act intended to minimise disruption to the business and protect the interests of the employee and the employer while an independent investigation is completed," it said in a statement.

"For the sake of fairness and due process, until the investigation is concluded, neither the board nor the corporation will communicate further on this matter..."

Reggie Naidoo would be acting CEO until the disciplinary process against Mase had been completed.

The Dispatch Online on Wednesday reported that R22-million was used for memorial services for former president Nelson Mandela in the Eastern Cape.

The money allegedly came from a R330-million infrastructure grant the provincial treasury had channelled to the ECDC for projects. The funds were meant for providing running water, electricity, sanitation, ablution facilities, replacement of mud-schools, and refurbishing hospitals in the province.

The publication reported that a substantial amount of money was instead spent on takeaways and T-shirts.

It said R5-million was paid to a football boss in Cape Town to print thousands of shirts bearing Mandela's face. Another R333 360 was spent at McDonalds in Mthatha and R441 560 at the KFC.

The spending contravened treasury regulations for Mandela events, which stipulated that the use of taxpayers' money be used for transport and booking of venues.

ECDC spokesperson Nopasika Mxunyelwa was quoted by the Dispatch Online as saying the ECDC had paid a total of R22.2-million.

"ECDC was appointed only as a paymaster and it effected payments on transactions already authorised by treasury," she said.

Hawks spokesperson Paul Ramaloko confirmed that the matter was being investigated. He was unable to provide specific details.