PetroSA board fires CEO
THE board of PetroSA yesterday fired CEO Sipho Mkhize with immediate effect, but did not give reasons for the dismissal.
The dismissal is a continuation of the leadership crisis at some of SA’s state-owned enterprises. Senior managers who have been unceremoniously sacked recently include Eskom CE Jacob Maroga and former Transnet Freight Rail CEO Siyabonga Gama.
There have been suspicions that Mr Mkhize has been skating on thin ice since he and two colleagues, chief financial officer Nkosemntu Nika and operations vice-president Michael Nene, were reportedly suspended in May this year over allegations of irregularities.
These were reportedly uncovered in an investigation of tender- rigging and financial mismanagement conducted by Gobodo Forensic & Investigative Accounting. According to the reports, the three were quickly reinstated a week later.
PetroSA did not confirm the suspensions.
In a terse statement yesterday, the PetroSA board, chaired by businessman Popo Molefe, said: “The board of directors of PetroSA hereby confirms that following the outcome of a disciplinary process in respect of the CEO, Mr Sipho Mkhize, his contract of employment has been terminated, with immediate effect.”
PetroSA spokesman Thabo Mabaso yesterday declined to comment further and did not confirm if Mr Mkhize’s dismissal was related to the Gobodo investigation.
“The PetroSA board acknowledges that Mr Mkhize has rights that he may choose to exercise, as a result of the decision against him,” the board’s statement read. It was not clear who the board had appointed to act as CEO. “The board will, in the meantime, continue to provide all necessary support to the PetroSA management in order to ensure minimal disruption to the company’s operations,” it said.
Energy Minister Dipuo Peters, who has authority over PetroSA, yesterday confirmed the board had informed her of its decision. Department of Energy spokesman Bheki Khumalo said Ms Peters relied on the boards of state-owned enterprises to ensure that proper corporate governance was followed.
PetroSA has a substantial procurement budget. In the 2008 financial year, the company spent R7,1bn on goods and services. This is likely to increase substantially as the company embarks on its ambitious 10bn crude oil refinery project in Coega, near Port Elizabeth. The company is also an important contributor to government coffers. It paid the Central Energy Fund , its shareholder, dividends of R725m in the 2009 financial year.
The leadership vacuum that Mr Mkhize’s sudden departure is going to cause comes when the government has placed PetroSA at the centre of its plans to ensure security of energy supply. The government wants PetroSA to procure at least 30% of the country’s crude oil needs, increase refining capacity and invest in liquid fuels logistical infrastructure. This is one of the reasons the company has embarked on the 400000-barrel- a-day Coega refinery.
Mr Mkhize was CEO when PetroSA was hit by the Oilgate scandal. In December 2003 the company paid R15m to Imvume, an empowerment company, as an advance in connection with the procurement of oil condensate. But a large portion of the money was suspected to have gone to the African National Congress, instead of Glencore International, the supplier. An investigation by the public protector found Mr Mkhize did not approve Imvume’s request for an advance as he was on leave at the time.
Source: BusinessDay - 24 August 2010