Ramokgopa says inquorate Necsa board to be replaced by new board within three weeks

Electricity and Energy Minister Dr Kgosientsho Ramokgopa says a new board will be appointed at the South African Nuclear Energy Corporation (Necsa) before the middle of October, replacing the current board which has been inquorate for weeks following a slew of resignations.

Speaking during a meeting convened by the Portfolio Committee on Electricity and Energy specifically to discuss the governance crisis at Necsa, the Minister said the resignations had coincided with preparations for the appointment of a new board in January, but that the process would now be accelerated.

Names of potential candidates had been short listed and would be presented at an upcoming Cabinet subcommittee meeting, before being presented for Cabinet approval at its next meeting.

The Minister said he was not intending simply to fill the vacancies but would instead announce an entirely new board, which could include some current members in the interest of retaining institutional memory.

The process should be completed within three weeks, with the usual Cabinet schedule having been shifted out by a week as a result of the upcoming Heritage Day public holiday, which falls on a Wednesday – the day typically reserved for Cabinet subcommittee or Cabinet meetings.

In the interim, governance authority had been delegated to CEO Loyiso Tybashe, who, together with CFO Precious Hawadi, was at the centre of the salary disputes that resulted in the board resignations.

Some board members had raised questions about the way salary increases had been implemented by Tybashe, resulting in an internal audit being instituted.

The audit reportedly raised concerns about whether the board had been provided with accurate financial information by the executives when seeking to prove there was sufficient budget for the increases.

When the board sought to place Tybashe on precautionary suspension, he opposed the action legally, while Necsa chairperson David Nicholls refused to sign the notice and resigned.

However, Ramokgopa refused to accept his resignation, and Nicholls remains in place, having subsequently expressed his full confidence in Tybashe, who withdrew his legal action at the Minster’s request.

A separate anonymous complaint sent to the Minister alleges that the relationship between Nicholls and Tybashe is too close, highlighting that the two individuals had travelled overseas together.

The Minister told the portfolio committee that he had requested a subcommittee of the board to investigate the complaint, but no report had been delivered prior to the resignations.

The Minister also did not accept the board’s move to suspend the CEO, arguing that it was his prerogative, and requested a meeting to seek clarity.

The resignations of five board members, including the shareholder representatives from the Department of Electricity and Energy itself, then followed, leaving the board inquorate.

Ramokgopa did not disguise his irritation with the board members who had resigned and even went so far as to suggest that their fixation on the salary issue was because too few of them had genuine nuclear or scientific backgrounds.

“So, you'll see that the board that's going to be appointed is going to have a presence of scientists, people who are going to help us to steer this [organisation] in the right direction,” Ramokgopa said.

The Minister also insisted that a financial and operational turnaround was under way at Necsa, arguing that this would be evident in the group’s upcoming financial results to Parliament. He added that the results would also include an unqualified audit from the Auditor-General South Africa.

The board crisis comes only weeks after the Minister appeared before the portfolio committee for a separate emergency meeting into an error made by the National Energy Regulator of South Africa, which resulted in a settlement with Eskom, which is now entitled to recover R54-billion in additional revenue through higher electricity tariffs.