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A mysterious letter, which states that Minister of Mineral Resources and Energy Gwede Mantashe has removed the mandatory powers of the board at the Nuclear Energy Corporation of SA (Necsa), landed on the desk of the company’s acting chief executive, Ayanda Myoli, at the end of last month.
The document, which the Necsa board handed over for legal opinion, purports to grant Mantashe far-reaching powers over the corporation.
It cites Thabane Zulu, director-general of the department of mineral resources and energy, as the document’s author.
However, it is undated and it does not bear Zulu’s signature.
City Press has learnt that Mantashe has had skirmishes with Necsa’s remaining board members.
The board took office in December 2018 on a three-year term ending in 2021, but four members have since resigned.
When asked about this on Friday Mantashe declined to comment.
However, confidential records in City Press’ possession show that Mantashe was of the opinion that the Necsa board did not quorate, and so the body was illegitimate.
In one of the records, Mantashe claimed that the board had manipulated a quorum.
Records also show that Mantashe insisted that Matlhodi Ngwenya, one of the remaining four board members, had resigned, and so the numbers were no longer quorate.
But Necsa said Ngwenya was still part of the board, which is made up of five members when Myoli is counted, and therefore makes a quorum.
According to the letter attributed to Zulu, “the Necsa board should avoid making decisions which may result in independent third parties initiating litigation that may directly challenge the legitimacy of the decisions”.
The author advises Necsa to seek support and guidance from Zulu where “urgent decisions” are required, or from Mantashe’s office where a high-level political intervention is required.
According to a legal opinion given to the Necsa board by senior counsel Michael Katz, who is chairperson of the law firm ENSafrica, “the limitations contained in the letter, to the extent that they detract from the wide powers and authority of the board, are not binding on the board”.
“I would also point out that the common law principle with regard to any attempt by the shareholder to direct or limit the board, is that it is not lawful to do so and not binding on the board,” Katz said in a report dated December 2 2019.
On Thursday, Necsa said that, “concerning the ‘undated letter’ from [Zulu] … a formal signed version thereof has not yet been received by Necsa”.
Board spokesperson Ntombikhona Mthombeni said: “According to legal advice we have received from our attorneys, we have no reason to believe that the Necsa board is illegitimate. In addition, neither the [mineral resources] department nor the minister have challenged the legitimacy of the board. We are aware that the minister is in the process of augmenting the board.”
Mthombeni said the procedure to augment the board included appointing shareholder representatives from both the department of international relations and cooperation, and the mineral resources department.
She said that Ngwenya remained a member of the board, as did the other four board members.
Nathi Shabangu, spokesperson for the mineral resources ministry, told City Press that “the letter … has no legal standing”.
But, added Shabangu, “the ministry is on record that among its priorities is the need to ensure proper governance at all state-owned enterprises (SOEs) in the minerals and energy portfolio, including Necsa”.
He said this would include finalising board appointments to ensure that these SOEs were stabilised and could focus more effectively on delivering on their respective mandates.
Read: ‘Nuclear deal’ claims first scalp: Necsa’s CEO Phumzile Tshelane
The letter attributed to Zulu also instructed that Necsa settle matters with its former chief executive Phumzile Tshelane and former chief legal adviser Vusi Malebana, as well as suspended chief financial officer Hlengiwe Khumalo.
Mthombeni said Tshelane and Malebana were charged with serious offences and were dismissed in May 2019 and October 2019, respectively.
The charges against Khumalo were withdrawn and she had returned to work, added Mthombeni.
“The details concerning these disciplinary matters are internal and cannot be discussed in public,” she said.
Regarding fears that Necsa would be unable to pay salaries, suppliers and statutory obligations from Tuesday until March 2020, Mthombeni said the company had been in financial distress since 2017, “which has increasingly become untenable”.
Read: Necsa still has a nuclear role to play
She said a turnaround and sustainability strategy was developed and submitted in October to Mantashe for his approval.
City Press has seen letters written to Zulu and Mantashe between November 18 2019 and December 10 2019, in which Myoli and the Necsa board requested financial help to avoid the nonpayment of salaries.
Shabangu said the department would not comment on the management affairs of Necsa.
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