Mungo Soggot
The downfall of state oil chief Don Mkhwanazi this week came after the Cabinet blocked an earlier attempt by the Minister of Minerals and Energy, Penuell Maduna, to keep him at the helm of the Central Energy Fund (CEF).
Maduna tried to persuade the Cabinet that Mkhwanazi, the fund’s chair, and his board should be retained when their contracts expired this week, despite the scandal surrounding Mkhwanazi that has rocked the state oil industry. Mkhwanazi resigned only after a Cabinet committee ordered Maduna to compile a new list of nominees for the CEF board.
Mkhwanazi’s appointment of his close friend, Liberian politician Emanuel Shaw II, as a highly paid CEF consultant, triggered a damning government commission of inquiry which recommended the oil company’s board be sacked. The public protector and the Office for Serious Economic Offences are also investigating.
Mkhwanazi threatened to sue the government if he was sacked. But he resigned just before Maduna asked the Cabinet to endorse him again. On Tuesday, the day before the Cabinet met and the day after his last CEF board meeting, he officially rejected his nomination. A Cabinet statement suggested Mkhwanazi had resigned, but his departure was not a prejudgment of the public protector’s findings.
Maduna – who has consistently backed Mkhwanazi, despite the advice of his top officials – was unavailable for comment this week.
The minister did not interview any new applicants for the CEF board. Instead, he retained most of the former board members, and appointed his advocate as a new addition.
All but one of the old CEF board had stood by Mkhwanazi throughout the turmoil, following the exposure of Shaw’s unusual appointment.
Shaw’s R3-million CEF contract remains in place until it expires in June, and is unlikely to be renewed.
The Director General of Minerals and Energy, Sandile Nogxina, confirmed that the Cabinet committee “referred back the first list because it did not include enough women”. Nogxina said the department had not interviewed any of the 100 applicants who responded to an advertisement calling for nominations for a new CEF board. He said the CEF Act made it the prerogative of the minister to pick the board.
Those who have stayed on include Mkhwanazi’s close associate and friend Keith Kunene, who will become acting CEF chair until a permanent replacement is found. Kunene has also been made chair of the state fuel-from-gas operation Mossgas which, like the other CEF companies, will get its own board.
Mkhwanazi’s departure closes the door on a disastrous 12 months for the CEF, which last year appointed its first board since 1994. The scandal over Shaw’s appointment came months after a messy squabble over the suspension of the CEF’s top oil trader, Kobus van Zyl.
Maduna has spent R2,5-million on a team of accountants, dispatched to find evidence to justify the suspension. Van Zyl, who has been suspended on full pay for the past year, has still to be formally disciplined.
The investigators have compiled several weighty tomes – including an affidavit from Van Zyl’s secretary saying he asked her to remove documents from his safe – after their initial findings threw up insufficient evidence to hang him.