PetroSA, the state oil and gas company, will ”have nothing to do” with Imvume Management in future and it has been ordered to pay back monies owed to it, says PetroSA chairperson Popo Molefe.
The former North West premier — who became chairperson of PetroSA in September last year — faced tough questions from opposition MPs in the standing committee on public accounts on Wednesday morning.
He was first cross-questioned by the Democratic Alliance’s Anchen Dreyer for half an hour, who established that payments to Imvume — for condensate — were normally made to a dollar-denominated bank account, but payments had been in a rand-dominated account because Imvume was cash-strapped at the time.
The hearing arose after a Mail & Guardian exposé indicated that a double payment of R15-million had been made in December 2003 by PetroSA to Imvume, which in turn paid R11-million to the African National Congress for its April national election campaign last year.
PetroSA CEO Sipho Mkhize — who had not been CEO at the time — said R7-million has already been paid back to PetroSA in an arrangement with Imvume, which is paying back the amount at a rate of R500 000 a month. He promised to go to court if the next payment is not made by September 1. The monies are being paid back with an interest rate of prime plus 2%, he told Dreyer.
Molefe said Imvume Management was at the time given an advance payment as it had been experiencing cash-flow problems ”in that month”. If money had not been paid to Imvume, the delivery of condensate ”was going to be affected in a matter of days”.
Asked by Dreyer if he had ”any idea of the close relationship” between Imvume and the ruling ANC, the former premier said: ”No, no.”
He said that from a PetroSA board discussion, there was no indication that Imvume had reported its relationship with other companies or political parties. It was a contractual relationship between PetroSA and Imvume, he said.
Mkhize stated that without the condensate from Imvume, PetroSA would have had to ”shut down the plant”. He did not indicate which plant, but it is understood to be the plant at Mossel Bay.
He said if that had happened, PetroSA would have suffered and would have lost ”a million dollars per day”. PetroSA had also been engaged in negotiations ”on the insurance side” at the time, which made matters difficult, he said, without further explaining this point.
PetroSA officials said the advance cash payment was requested to address Imvume’s temporary cash-flow problems and PetroSA did not keep uncommitted dollars — ”so that is why the request was made in rands”.
When asked by Dreyer if this was not a highly unusual request, Molefe agreed that it was ”a new one [request]”. It had happened at the time when the CEO of PetroSA was on leave and there was an acting chief executive. There ”appeared to be an admission by the acting CEO that it was an oversight. As an acting CEO he did not monitor that particular transaction.”
Asked if this constituted negligence, Molefe said: ”Certainly there was a lapse in monitoring this transaction closely into a different account.”
PetroSA officials, however, argued that there was a policy of advance payments to black economic empowerment companies that suffered cash-flow problems. — I-Net Bridge