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Previous Necsa board inept, defiant – Radebe

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Previous Necsa board inept, defiant – Radebe

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Energy Minister Jeff Radebe

7th December 2018

By: Rebecca Campbell
Creamer Media Senior Deputy Editor

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Energy Minister Jeff Radebe has made most serious allegations against the previous and recently dismissed board of the State-owned South African Nuclear Energy Corporation (Necsa). He was briefing the media, in Pretoria, on Friday.

He accused the previous board members of failing to properly and prudently execute their statutory mandate; failing to comply with legislation; ignoring directives and instructions from the shareholder (that is, the government); mismanaging finances; irregularities regarding renumeration; undertaking unauthorised international travel; issuing media statements on several sensitive issues that where inaccurate, misleading and/or defamatory; and the signing of a memorandum of understanding (MoU) with a foreign entity against the explicit instructions of the shareholder.

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Also, he said, the dismissed board had failed to properly address the many concerns and irregularities highlighted by the Auditor-General during the 2017/18 audit, which was still unfinished and damaged the financial integrity of Necsa.

In particular, he stressed its failure to get subsidiary company NTP Radioisotopes, manufacturer of crucially important medical radioisotopes, back to full production for almost a year.

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He also accused some unnamed board members of defying him and Deputy Energy Minister Thembisile Majola.

"After my recent appointment as the Minister of Energy, I endeavoured to familiarise myself with the challenges at Necsa with a view to ensure their speedy resolution," he said.

"However, the continued ineptitude and deliberate acts of defiance by some of the board members resulted in various setbacks and losses, such as the nonproduction of medical isotopes for over a year following the shutdown of the NTP (a subsidiary of Necsa), which the Necsa board failed to resolve when it was in their capacity to do so. The acts of some defiant board members unfortunately affected the efficacy of the entire board, thereby seriously compromising its ability to collectively discharge its fiduciary duties in respect to Necsa and its subsidiaries, particularly NTP."

On several occasions, he affirmed, the Necsa board had failed to satisfactorily and prudently carry out its statutory mandate. Often, these seemed to be deliberate acts, counter to the board's fiduciary duty, the Minister stated.

Continued defiance of explicit orders from the shareholder, "whether by commission or omission", hampered action to quickly settle the regulatory concerns and restart production at NTP, he said.

Radebe reported that he had met with the Necsa board to highlight "their very unsatisfactory conduct" and to solve the "many governance challenges" concerning the board, Necsa and its subsidiary operations. Following on from this, he asked the board members to give good reasons why they should not be removed from the board. Their responses did not convince the Minister and Deputy Minister that the board would be able to address Necsa's problems and so they decided to remove the entire board.

In response to a question from a journalist, Radebe confirmed that the MoU with a foreign entity referred to the MoU signed between Necsa and Rusatom Healthcare – a subsidiary of Russia's State-owned nuclear group Rosatom.

This was signed on the fringes of the Brazil, Russia, India, China and South Africa Summit in July. Radebe stated that this was against his direct instructions.

The agreement with Rusatom Healthcare would have conflicted with an existing agreement between Necsa and an Australian company.

Government on Thursday announced the names of the new Necsa board members, including new chairperson Dr Rob Adam.

Radebe on Friday also confirmed that Necsa CEO Phumzile Tshelane has been placed on precautionary suspension. An investigation will be initiated to ascertain the extent of alleged irregularities against the suspended CEO and, dependent on the results thereof, the institution of disciplinary proceedings may or may not be necessary.

A former NTP MD Don Robertson has been appointed interim CEO of Necsa.

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