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Tuesday, June 25, 2024

Exodus of SOE officials not due to political interference – Gordhan

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Public Enterprises Minister Pravin Gordhan has dismissed a suggestion that the exodus of high-ranking officials from state-owned entities (SOEs) was due to his undue political interference at the entities.

The SOEs falling under Gordhan have seen resignations of top officials in recent months.

Former Transnet CEO Portia Derby’s resignation was announced at the end of September and was followed by that of Transnet Freight Rail CEO Siza Mzimela. Former Transnet CFO Nonkululeko Dlamini took up a position at Telkom, and former Transnet managing executive for the critical export coal line, Ali Motala, left for “personal reasons”.

Former Eskom CEO André de Ruyter resigned in December 2022, former Eskom chief operating officer Jan Oberholzer retired in April, and former Eskom board chairperson Mpho Makwana also called it quits, as did Popo Molefe from the Transnet board.

In his response to EFF MP Sinawo Thambo, Gordhan said the board of directors, which was entrusted with the ultimate responsibility and guided by their fiduciary duties, was empowered to manage all facets of the SOE’s business.

“In instances of significant operational challenges affecting both the company and the broader economy, as exemplified by Transnet, I have tasked certain boards, including Transnet’s, with developing and implementing a recovery plan.

“This strategic initiative aims to reassess and enhance operational effectiveness, ultimately leading to a substantial improvement in the SOE’s performance.

“The boards are wholeheartedly committed to ensuring operational continuity and the successful implementation of the turnaround plans,” he said.

Gordhan said his department as the shareholder at the SOEs had a responsibility to hold the boards of SOEs accountable in line with relevant laws, including the Companies Act and Public Finance Management Act.

“Furthermore, the shareholder exercises shareholder rights in line with the Memorandum of Incorporation. There has not been any political interference in the SOEs that resulted in any leadership vacuum.”

He said while the departments ensured that there was stable leadership at SOEs, they had appointed interim leaders who possessed the necessary experience and expertise to effectively manage and guide Eskom and Transnet.

“We have recently directed the Transnet board to promptly formulate solutions for a variety of operational challenges, which encompass matters such as accountability, cost structure, and employee engagement,” he said.

Gordhan said during extremely challenging times it was found that more often than not changes in leadership at both board and executive level were necessitated in order to drive urgent change and performance of an organisation based on its operational requirements and the need for a review and refocus of operational effectiveness.

“This has been the case in the instance of Transnet and Eskom in recent months.”

He also said the leadership change was but one of the levers utilised to drive strategic enhancement of the organisations.

“It is on this basis that a review of executive management to determine whether they were fit for purpose and capable of executing the board’s revised strategies and plans was undertaken by the SOE boards.

“Coupled with leveraging of existing resources to pursue long-term success, the boards of some entities in the Department of Public Enterprises’ portfolio, namely Transnet, Eskom, and Denel, are undertaking rigorous and comprehensive recruitment processes to fill key positions of group executives and prescribed officers.

“While the recruitment processes are under way, the boards have appointed interim executives and prescribed officers from within their existing management structures, with immediate effect.

“This ensures leadership continuity and stability, and operational sustainability.

“Any assertion of the so-called ‘interference’ is rejected emphatically,” Gordhan said.

Meanwhile, the department had no capped amount at which it would cease to provide financial relief to SOEs.

“Each request for financial relief is assessed on its own merit.”

Cape Times

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