EXCLUSIVE: PetroSA said to be on verge of promoting previously suspended officials | Fin24
 
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EXCLUSIVE: PetroSA said to be on verge of promoting previously suspended officials

Apr 13 2018 18:02
Khulekani Magubane

Cape Town – A fresh furore over structural changes in the executive leadership of the beleaguered PetroSA has sources close to the entity claiming individuals are trying to keep the state capture project going at the entity.

Sources have told Fin24 that three executive positions that do not exist in the company's current organogram have been advertised internally in a bid to undermine formal structures at the organisation. The source said individuals who have long faced allegations of impropriety could soon be calling the shots at PetroSA.

The state owned company has suffered various setbacks, including a R1.4bn loss in the 2016-17 financial year and the resignation of board members in the midst of its financial bedlam.

PetroSA’s holding company, the Central Energy Fund, has committed to probing the entity as well as Strategic Fuel Fund amid evidence of the illegal sale of fuel reserves dating back to late 2015. However, the CEF says PetroSA itself has been non-responsive to its calls for past tenders to be investigated.

The source close to the latest state of affairs at PetroSA told Fin24 of an “engineered crisis” still at play at PetroSA.

“CEF has internally advertised three roles, not nationally in order to attract the best available talent as required. They advertised three posts for the executive for manufacturing, executive for exploration and production and executive for trading and marketing which don’t exist in the current organogram,” the source said.

Power play

The source said these roles advertised internally were not agreed on with the broader organisation, meaning that there was a significant power play at the company. He said acting CEO Khonny Zono was appointed to the position of COO, leaving him hamstrung with no real authority.

“They appointed the acting CEO as the COO. They then appointed someone in trade and should nothing happen to the board, they will just elevate those roles up to the same status as the board. PetroSA remains captured,” said the source.

They told Fin24 that CEF chair Luvo Makasi was neutralising the power and independence of PetroSA's board with a view of neutralising the interim board’s authority until a new board is announced.

“It is merely survival. This is because they were told how this would transpire. Those positions were authorised by the CEO and the board. The main guy is Luvo Makasi who is pushing this thing. He has also been planted,” the source claimed.

He said individuals who were suspended for irregular conduct as far back as 2010 were on the cusp of reemerging in powerful positions at PetroSA. This includes operations manager Micheal Nene, who was suspended along with then-chief executive Sipho Mkhize and then-CFO Nkosomtu Nika after a probe by Gobodo Ntsabula found evidence of tender rigging and financial misconduct at the entity.

"Nene, who was suspended previously for underhand dealings, has been given the Executive: Trading and Marketing role. Zono has been appointed COO even without the job being advertised as per public service regulations," the source alleged.

PetroSA board itself to blame

However, Makasi told Fin24 the PetroSA board itself was to blame. He denied any interference with board matters saying that only the board could have approved new positions at PetroSA.

He said the PetroSA interim board had not responded positively to the CEF’s calls to probe its contracts. He said the board failed to appoint a chief financial officer despite having a dozen applications for the job.

Makasi said the CEF gave the PetroSA board multiple opportunities to present them with a plan that would turn PetroSA around, but that they failed to present one which would turn the entity’s fortunes around and reduce its exposure to risk. He said consultations to address this was ongoing.

“We will have to speak to the minister [Jeff Radebe] before responding to the details in some of your questions so as not to skip protocol and undermine the minister. But we do intend to submit a plan to the department within the next week,” Makasi said.

DoE tight-lipped

The Department of Energy is keeping a tight lid on how it plans to stabilise PetroSA’s leadership structures and operations ahead of its meeting with Parliament’s portfolio committee.

The imbroglio surrounding the fuel reserves not only means that SA lost R3bn in the sale, but may have to fork out a further R6bn to replace the oil barrels or buy them back. The CEF is also seeking a court declaration invalidating the sale.

This comes amid speculation that for years there have been moves afoot to keep PetroSA perpetually incapacitated to deal with its various fronts of instability. This includes the appointment of interim boards on contracts and executives being hamstrung in multiple positions, sources say.

“We resolved that we are not going to make any pronouncement until the minister briefs the media of the state of his new portfolio. I guess you would understand, we would not want to jump the gun on matters the minister would address,” Central Energy Fund spokesperson Jacky Mashapu told Fin24.

petrosa  |  soe  |  state capture  |  energy
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