air
Mungo Soggot
FORMER Central Energy Fund chair Roy Pithey has swatted suggestions this week from Minister of Mineral and Energy Affairs Penuell Maduna that the operation engaged in irregular accounting practices.
Maduna told Parliament that the results of his investigation into the fund’s post-1992 operations would be handed over “soon”. The probe -which triggered the suspension of state oil trading chief Kobus van Zyl in March – has been conducted by auditing firm Ntsaluba Nkonki Sizwe.
The fund is the holding company for the state’s fuel and energy operations, and ran the former government’s sanctions-busting efforts.
But fears have been growing that Maduna’s investigation has failed to discover evidence to justify Van Zyl’s public ousting. The auditor general’s office, which checks the fund’s accounts, is also privately voicing concerns about Maduna’s probe.
Reacting to such concerns, Maduna told Parliament the report would “embarrass” certain people on its release. He then mooted two accounting incidents that he believes show improper financial management. Neither relates to the original contracts cited in Van Zyl’s suspension.
Maduna quoted from a letter, dated October 1994, addressed to “Roy” about the “Salem” affair – a reference to the 1979 sinking of an oil tanker full of Shell oil bound for South Africa.
The letter, written by Van Zyl, said he and Shell had agreed not to publicise the origin of a long overdue insurance pay-out the state was due from the ship’s sinking. “We again agreed on secrecy,” the letter read. “Shell gets acknowledgment from the top that we have the money but we don’t disclose the origin in the books.”
Pithey, who resigned from the fund earlier this year, said he had informed the then minister, Pik Botha, about the matter, but had not believed it necessary to “specifically inform” Parliament.
“My main concern was getting the money for the shareholder [government].” He added that the origin of the cheque was in any case recorded in the fund’s accounts.
Maduna also referred to a February 1994 document submitted to Botha, by accountants Price Waterhouse, the private accounting firm that helps the auditor general check the fund’s books.
The document referred to a “loss” of R170- million relating to the transfer of oil, which Maduna said should have been reported to Parliament by the auditor general.
But fund officials say the figure arose from a normal accounting practice when oil was transferred from Mpumalanga to Saldanha Bay. The oil had been valued at its original cost rather than market value in the transfer. The difference between market value and cost would have been taken into the profit account when the oil was sold.
Maduna’s efforts have sparked a feud between his office and the auditor general. The minister showed Parliament that he doesn’t trust the auditor general’s office to dig deep enough, saying he felt it necessary “to go outside the ranks of the state and look for people who would give me the answers I was looking for.”