Issued by: SA Communication Service
MINISTER CENSURES BOARD OF UMGENI WATER
Prof. Kader Asmal, MP, Minister of Water Affairs and Forestry, today censured the Board of Umgeni Water over its gilt trading activities which led to an independent investigation by a firm of auditors.
The Minister appointed the firm Fisher Hoffman Sithole in June 1995 to conduct the investigation after criticism of Umgeni Water had appeared in the media.
The report, which is released today by the Minister, stated that Umgeni Water received no Ministerial approval for its market-making activities. The report also found that a partnership of financial advisers had been appointed by Umgeni Water from April 1993 "in most inappropriate circumstances" and had been paid commission of more than R4 million to date.
Accepting the report's broad findings, the Minister said at the media conference today: "Although the investigating auditors did not detect any illegal transactions by the directors or staff of Umgeni Water, I must express my misgivings about some of the disclosures made in the report ... such as those concerning directors' dealings in UW bonds or options, the quantum of what was paid to financial advisers, accounting procedures, and failure fully to inform the Board on all issues."
Professor Asmal noted Umgeni Water's adoption of better control and remedial measures, and stressed that Umgeni Water was found by the auditors to be in sound financial condition, and that there is no question of any compromise of its ability to meet its obligations. Water prices to consumers have not been affected. The new Board, appointed in 1995 has been restructured, is now more representative and has already shown itself to be more activist in its role than in the past.
In addition to those copies of the report and executive summary made available at the media conference, copies may be scrutinised at head regional offices of the Department of Water Affairs and Forestry.
Enquiries: Mr Claus Triebel Deputy Director-General: Utilisation (012) 299-2206/7