Watch the video – update by the Department of Electricity and Energy regarding governance matters at the South African Nuclear Energy Corporation (NECSA).
- South Africa’s Electricity and Energy Minister, Dr Kgosientsho Ramokgopa, downplayed the recent resignation of five NECSA board members including three non-executive board members, plus the board member representative of the Department of Energy & Electricity (Dr Philemon Magampa), plus his alternate (Ms Bessie Makgopa), which have left the board inquorate.
- He was addressing the Parliament’s Portfolio Committee on Electricity and Energy on Thursday.
It has subsequently emerged that the resignations are due to his inaction after receiving a report by the Board on excessive, unreasonable and unauthorised executive pay hikes implemented by NECSA CEO Loyiso Tyabashe and CFO Precious Hawadi. About R5-million in executive salaries was allegedly processed outside the CEO’s cost centre.
The board moved to suspend both but Tyabashe and Hawadi, accusing them of mismanagement of public funds and a serious breakdown in corporate governance. The two turned to the courts to stop the suspension arguing that only the minister has authority to suspend the CEO, and since the CEO appoints the CFO, only the CEO may suspend the CFO.
Ramokgopa has retained the services of both Tyabashe and Hawadi and announced that that his ministry has initiated a call for expressions of interest for new board members and expects a new board to be in place within three weeks.
NECSA has previously been troubled with allegations of incompetence and corruption. The state owned nuclear company reported financial losses in several previous years, including a loss of R318 million in 2021 followed by a R30 million loss, before improving to sustainable profits of R148 million and R149 million in the two years after 2021. Prior to this, NECSA had faced significant financial difficulties, with a R1.75 billion net loss in the year leading up to December 2019 and a previous loss exceeding R1 billion, alongside a government bailout of R1.8 billion.
NECSA has since stabilised its finances, improving its performance to above 80%. It also achieved clean, unqualified audits for it and its subsidiaries, with the remaining work being to address some of the findings made by auditors. Earlier this year, Tyabashe confirmed that the state-owned nuclear body is prioritising six programmes, estimated to cost approximately R50 billion. Read more
Author: Bryan Groenendaal
