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Radebe was wrong to axe Necsa board members - here's why

Aug 19 2019 16:50
Lameez Omarjee, Fin24

The North Gauteng Court on Friday ruled that the removal of two board members from the South African Nuclear Energy Corporation late last year was unlawful.

The matter, which was heard on June 10 and 11, dates to November 2018 when former energy minister Jeff Radebe axed Necsa board members Kelvin Kemm, Pamela Bosman and former director and CEO Phumzile Tshelane over governance issues.

Necsa conducts research and development in the field of nuclear energy, radiation sciences and technology. It is also responsible for uranium enrichment.

The board members challenged Radebe's decision on the basis that their reputations would be affected. They sought to be reinstated as board directors and to have their removal and the suspension of Tshelane set aside.

Although the court found that the removal of the board members was unlawful, they could not be reinstated, as their three-year term on the Necsa board expired on March 23, 2019.

There was no outright winner in the matter and parties were ordered to bear their own costs.

According to the judgment, the applicants were "not totally successful", nor was the minister. The applicants have every right to restore their dignity, the judgment said, but at the same time, the minister was not found to have "any ulterior motives" in his actions. Rather, it argued, he was hasty in wanting to "restore the stature of Necsa as an institution". 

The Department of Energy has said it is studying the judgment before making any pronouncements on it.

Here are five key findings from Judge Mtati.

1. Radebe already made up his mind

The judgment shows that after the minister received reasons from the applicants petitioning why they should not be dismissed on December 4, the minister still dismissed them and subsequently appointed a new board the next day.

"The board was dissolved and new members were appointed the following day," the judgment reads. 

2. Board members not given a chance to present a fair case

The judgment indicates that the minister called a meeting on November 20 with the directors to raise concerns with them, relating to the closure of the shutdown of a Necsa subsidiary NTP Radioisotopes, which affected jobs.

According to Bosman and Kemm, the meeting only lasted 20 minutes. Subsequently, on November 22, the board members were given notice of their removal in a letter and asked to provide reasons why they should not be dismissed.

"This meeting cannot be viewed with the intention to comply with the Companies Act. No proper notice [was] given to directors, no agenda was provided," the judgment reads.

"Any meetings before 22 November cannot be viewed as providing applicants [with the] opportunity to make presentations."

3. Radebe applied blanket accusations

Radebe sent the board members similar letters raising various concerns, such as issues of unauthorised international travel, remuneration of the CEO, dissemination of false information to the media, unauthorised increases of board remuneration, and an MoU signed with Rosatom without the minister's approval.

Judge Mtati, however, argues it would be inconceivable to apply the allegations across the board. For example, Bosman could not account for allegations of conflict of interest which applied to Kemm. Nor could she have been liable for signing a Rosatom agreement.

4. Radebe did not consider 2 000-page submissions

On December 4, Kemm and Bosman submitted a 2 000-page document responding to 10 allegations made against them.

Within an hour, the minister sent them letters of termination.

"Once again the minister does not deal with each response raised by the applicants but comes to a generic all-encompassing response," the judgment read.

"The minister did not comply with S71 of the Companies Act by failing to provide Kemm and Bosman an opportunity to make presentations at a meeting providing reasons why they should not be removed as directors.

"Secondly, I find that the minister did not consider their written representations before making a decision to remove them as directors of Necsa," Mtati said.

5. Tshelane suspension lawful

The judge upheld the minister's decision to suspend Tshelane as it was not unlawful.

"In conclusion, I am not convinced that the position in which Tshelane finds himself can be equated to that of Kemm and Bosman.

"The minister was authorised to suspend Tshelane pending a disciplinary inquiry; however, the same does not apply to Kemm and Bosman."

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