Minister denies CEF board suspension

Johannesburg - Energy Minister Mmamoloko Kubayi denied on Tuesday afternoon that she had suspended the board of the Central Energy Fund (CEF).

Instead, the minister said she merely handed the board members letters on Wednesday last week “requesting an explanation on concerns”.

Her denial came after media reports on Tuesday indicated that Kubayi had suspended the entire board, including its acting chief executive, chief financial officer and company secretary. Chair Luvo Makasi was also reported to be one of the casualties.

READ: Energy Minister suspends Central Energy Fund board, including acting CEO and CFO

Her spokesperson Nomvula Khalo at first did not deny the suspensions when first queried. The CEF also refused to comment, referring all questions back to the minister.

Khalo emphasised all matters between Kubayi and the CEF board would be treated with confidentiality. “Should there be a need to make (a) public announcement on any matter relating to the issues, minister Kubayi will do so at an appropriate time.”

The minister's action against the board comes amid an investigation into the secret sale of 10.3 million barrels of the country’s strategic oil reserves at alarmingly low prices by the Strategic Fuel Fund (SFF) in December 2015.

The SFF forms part of the CEF. 

The sale of the crude oil was done without the permission of Treasury, it later emerged. A whistle blower also indicated in a letter that 300 000 barrels of oil were loaned out to a private entity without proper procurement processes.

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. But she told parliament's energy portfolio committee that the current CEF board was not complicit in the sale. She said the department is considering laying criminal charges against those involved.

After the minister's admissions, the Department of Energy appointed a law firm to investigate all contracts at the SFF. 

But now it appears that the minister has redirected her wrath to the current CEF board.

Another issue at hand is that its chair, Makasi, gave state-owned oil company PetroSA - which also falls under the CEF - its marching orders in May as part of his cleanup campaign.

Democratic Alliance spokesperson on energy Gordon Mackay said the minister could clarify her actions against the board by agreeing to answer questions relating to this saga under oath in parliament. He said the DA would request the minister to come to parliament, and if she had nothing to hide she would do so.

Before the minister's denial Mackay said the reported suspensions was a smokescreen to protect the real culprits at the CEF. The current CEF board only became aware of the sale in May last year, he said.

He pointed out that the CEF chair and the two other board members, Mosimaneotsile Besnaar and Neville Mompati, were only appointed in December 2016, well after the issues of the sale, which occurred in December 2015.

“Removing a new chairperson who is actively trying to clean up the fund and PetroSA is also highly suspicious,” he said. “The firing of these board members is highly irregular and seems politically motivated – it has nothing to do with the board’s performance.”

He said he would urgently write to Kubayi to request that she table the findings of the law firm's investigations in parliament.

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