General financial misconduct, not adhering to shareholder instructions and repetitive legislative non-compliance are among a litany of challenges that led to the government this week replacing the old NECSA board.
The reasons were on Friday revealed by Energy Minister Jeff Radebe during a press briefing in Pretoria.
Radebe said the challenges at the South African Nuclear Energy Corporation (NECSA) were so severe that the ministry was left with no option but dissolve the board. The challenges, he said, had continued to hover and were not addressed, despite repeated calls.
The governance issues raised by the Minister ranged from:
- repetitive instances of legislative non-compliance;
- non-adherence to specific shareholder instructions and/or directives;
- financial mismanagement;
- remuneration irregularities, to
- unauthorised international travel.
He also accused the board of issuing misleading, inaccurate and/or defamatory media statements on a number of matters sensitive to the industry, NECSA and/or other relevant stakeholders.
The former board, he added, signed Memoranda of Understanding with foreign entities against the expressed instructions of the shareholder.
“The numerous irregularities and concerns raised by the Auditor-General of South Africa during the 2017/18 audit process, which to date remain incomplete and compromise the financial integrity of the organisation,” he said.
Radebe added that the NECSA Board’s inability to ensure the return to full operation of the NTP Radioisotopes manufacturing facility was another reason for its dissolution. This was almost 12 months since the facility was shut down by the National Nuclear Regulator due to serious safety irregularities.
“As the Department of Energy, we have over some time now been engaged with NECSA over various serious challenges encountered, which impacted their capacity as they executed their statutory mandate,” Radebe said.
He said upon his appointment earlier this year, he attempted to familiarise himself with the challenges at NECSA with a view to ensure their speedy resolution.
“However, the continued ineptitude and deliberate acts of defiance by some of the board members resulted in various setbacks and losses, such as the non-production of medical isotopes for over a year following the shutdown of the NTP, which the NECSA board failed to resolve when it was within their capacity to do so,” he said.
Radebe said the defiance of some of the board members affected the efficacy of the entire board.
“On a number of occasions, the NECSA Board failed to execute its statutory mandate in a satisfactory and prudent manner. In many such instances, it appeared to be deliberate acts that ran contrary to the fiduciary duty of the Board over the affairs of NECSA,” he said.
With challenges seemingly unresolved, Radebe said he convened meetings with the NECSA board with the purpose of bringing attention to the unsatisfactory conduct and to find solutions to NECSA’s governance challenges.
“In a meeting with the NECSA Board, both myself and the Deputy Minister Thembisile Majola emphatically expressed our concerns about the Board’s failure in its statutory duties to address the very serious transgressions and failures raised above,” he said.
It was in this meeting that the two requested the NECSA Board members to give compelling reasons they should not be relieved from their positions.
“Following the receipt of the NECSA Board members’ representations, we were still not convinced that the Board would be able to resolve the challenges at NECSA hence we decided to relieve the entire Board membership of its duties,” he said.
Following the dissolution, a process to appoint a new Board began. Cabinet on Wednesday approved the appointment of a new NECSA board.
The new board is made up of:
- Dr Rob Adam – Chairperson
- Dr Ramatsemela Masango
- Aadil Patel
- Bishen Singh
- Pulane Kingston
- Matlhodi Ngwenya
- Jabulani Ndlovu
- Dr Pulane Elsie Molokwane
Radebe is confident that the new board will bring “stability and insight necessary and essential for the successful implementation of the NECSA board’s institutional mandate”.
The Minister also announced that NECSA CEO Phumzile Tshelane has been placed on precautionary suspension.
“An investigation will be initiated to ascertain the complete extent of the alleged irregularities, and dependent on the results thereof, the institution of disciplinary proceedings may (or may not) be necessary,” he said.
Former NTP Managing Director Don Robertson has in the interim been appointed the acting CEO.
Radebe said the Department of Energy remained committed to ensuring good governance and the long-term financial and operational sustainability of NECSA.
“This is more so as nuclear energy continues to play a multiplicity of critical roles in our economy, amongst which is the production of the crucial medical isotopes through the NTP, which as a consequence of failures by the former NECSA board had been seriously compromised over the past 12 months.
“Consequently, South Africa, which currently produces over half of the global market needs, was at risk of losing its market share and competitive edge in the production and sale of the medical isotopes,” Radebe said. – SAnews.gov.za