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Kubayi refutes CEF board suspension report

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Kubayi refutes CEF board suspension report

Energy Minister Mmamoloko Kubayi

1st August 2017

By: Creamer Media Reporter

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Energy Minister Mmamoloko Kubayi on Tuesday refuted a media report stating that she had suspended the Central Energy Fund (CEF) board.

The Minister confirmed, however, that board members had been handed letters in July 26 requesting “an explanation on concerns”. No details were provided, however, as to the nature of these concerns.

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Business Day reported on Tuesday that it has seen a copy of a suspension letter sent to one of the board members.

The letter reportedly raises questions about whether the board member met with Allen & Overy investigators regarding the Strategic Fuel Fund (SFF) “stock rotation”. Allen & Overy was appointed by the previous Energy Minister, Tina Joemat-Pettersson, in 2016 to review all SFF contracts since 2014, including the illegal sale of a 10-million barrel crude stockpile, while KPMG compiled a financial analysis report.

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The Business Day report indicates that the letter also enquired into the nature of any meetings with the investigators and asks whether board members had given any instructions or suggestions regarding amendments to the Allen & Overy report. Similar questions were asked about KPMG.

After being appointed Energy Minister on March 31, Kubayi had instituted an investigation into the alleged illegal sale of crude oil previously held by SFF as a strategic stock. It has been reported that the crude was sold at a material discount to the already depressed spot prices prevailing at the time.

Besides SFF, another CEF company, PetroSA, is facing serious financial and governance problems of its own. PetroSA announced a loss of R449-million for 2015/16, after reporting a record operating loss of R14.6-billion in 2014/15. It has projected losses of R2.2-billion for the year to end March 2017.

In addition, CEF chairperson Luvo Makasi wrote to the PetroSA board asking them to resign with immediate effect, while Kubayi herself dubbed the national oil company a “problem child”.

In refuting the suspension of the CEF board, the Energy Ministry emphasised Kubayi’s position of CEF shareholder Minister, while adding that  “all matters relating to governance at the State-owned company would be dealt between herself and the board” and would be extended the “confidentiality” they deserve.

“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 Ministry said in a statement.

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