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Now chair quits embattled PetroSA

The interim chairwoman of the board of state oil company PetroSA has quit, plunging it further into chaos after it suspended two executive directors last month.
Now chair quits embattled PetroSA
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Nonhlanhla Jiyane resigned on Monday, 27 July 2015, after clashes with board members over a letter she wrote to the Central Energy Fund (CEF) - of which PetroSA is a subsidiary - raising concerns about its intervention in PetroSA's turnaround strategy.

CEF chairwoman Sankie Mthembi-Mahanyele on Monday confirmed Jiyane's resignation. "Yes, I did receive her resignation today but I am yet to study it," she said.

In her resignation letter, Jiyane refers to a letter from Mthembi-Mahanyele, dated July 15, which she describes as "disturbing".

"As a consequence, it has become extremely difficult for me to continue serving in the PetroSA board," she says.

In the letter MthembiMahanyele takes issue with Jiyane over delays in the approval of a turnaround proposal and a Project Appollo (sic).

"The apparent lack of urgency on the part of the PetroSA board is obstructing the efforts of the CEF to assist PetroSA and commence with the proposed intervention," Mthembi-Mahanyele says.

According to the CEF, the PetroSA board needs nine members to function but after the suspension of CEO Nozizwe NokweMacamo and chief financial officer Lindiwe Mthimunye-Bakoro and Jiyane's resignation, it only has six.

PetroSA is due to report losses of close to R14.9bn.

Its project Ikhwezi - exploration for feedstock for Mossgas - was a huge failure as it did not find the amount of gas reserves it had hoped to.

It was also forced to abandon Project Irene, an attempt to buy retail service station network Engen and an oil refinery owned by Malaysian state-owned company Petronas.

Chairman of Parliament's portfolio committee on energy, Fikile Majola, Monday said the board had to be reconstituted to rescue PetroSA.

"We still hold the view that the entire board must resign and it must be reconstituted; all the remaining members must resign," he said.

Mthimunye-Bakoro is challenging her suspension, saying the bulk of the R14.9bn loss arose mostly from impairments prior to her tenure, which began 15 months ago.

She and Nokwe-Macamo were first asked by the board chaired by Jiyane to take "gardening leave" while an investigation was done, but refused and were later suspended.

Confidence in PetroSA's board had been low for some time. An email circulated recently by board member William Steenkamp said board members should prepare to be replaced, because parliamentarians had lost faith in them.

Jiyane was part of the previous board of PetroSA that approved Project Ikhwezi in 2011, which insiders said lacked "due consideration of the risk appetite and tolerance of the company".

Jiyane had been in the position since November, following the removal of Tshepo Kgadima from the post.

Source: Business Day


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