Central energy fund board, including acting CEO and CFO, suspended

August 1st, 2017, Published in Articles: EE Publishers, Articles: Energize, Featured: Energize

 

Mmamoloko Kubayi, the minister of energy, has suspended the Central Energy Fund (CEF) board, including its acting chief executive, chief financial officer and company secretary.

Mmamoloko Kubayi

Fin24 was tipped off about the suspension by a source on Monday. CEF spokesperson Jacky Mashapu declined to comment, pointing journalists to their shareholder, Kubayi. Her spokesperson, Nomvula Khalo, told Fin24 on Tuesday that the minister is unable to respond to questions related to CEF as they are “internal matters”.

A report in the Business Day confirmed the tip-off on Tuesday, explaining that the suspension occurred after the board was called to a meeting last Thursday regarding the controversial stock rotation issue. They were given until 17h00 on Monday to respond to questions regarding the issue, the paper reported.

Without naming its source, the newspaper said those suspended included board chairperson Luvo Makasi, acting CEO Mojalefa Moagi, chief financial officer Lufuno Makhuba and company secretary Abdul Haffejee.

Makasi, who was appointed by former Energy Minister Tina Joemat-Pettersson, was in the news for his apparent close relationship to Nomvula Mokonyane, the minister of water affairs and sanitation this year.

City Press reported in February that Mokonyane is “allowing her young male companion to call the shots in her department – so much so that he has gone so far as giving orders to her director-general”.

Khalo told Fin24 that “any correspondence between the CEF and the minister as a shareholder is confidential and not for public consumption. Should there be a need for the minister to brief the public on any matter it shall be done. On matters related to the sale of the country’s reserves; we are almost at the end of internal process and should be able to brief the nation by September 2017.”

Stock fuel rotation or sale?

Kubayi admitted in May that the disposal of South Africa’s strategic fuel stock had in fact been a sale and not a mere stock rotation as her predecessor Tina Joemat-Pettersson had claimed. A week later, she told Parliament that her department is considering laying criminal charges against those involved in the sale of strategic fuel stocks by the Strategic Fuel Fund (SFF), which forms part of the CEF.

Thabane Zulu, the director-general at the department of energy, was seconded as CEO of the SFF in May.

The SFF, which controversially sold 10-million barrels of crude oil without the permission of Treasury, made an operating loss of R215-million in the 2015/16 financial year, while PetroSA’s operating loss amounted to R449-million – significantly less than the previous financial year’s R14,5-billion.

In March 2016, the SFF came under heavy criticism when it emerged that it was in contravention of the Public Finance Management Act by selling off the crude oil reserves.

The deal is currently the subject of an investigation, but as a rule the SFF is supposed to keep 20 days’ worth of oil stockpiles in reserve for emergencies.

According to legislation, national assets, such as fuel stocks may not be sold off without approval from National Treasury.

Acknowledgement

This article was first published by Fin24 and republished here with permission.

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