/ 26 January 2010

DA: ‘Failed’ parastatal CEOs cost SA R260m

Payouts to “failed” departing chief executives of South Africa’s parastatals have cost the South African public at least R262,1-million over the last decade, a Democratic Alliance (DA) MP said on Tuesday.

Pieter van Dalen said the cost of the payouts would jump to R347-million if former Eskom chief executive Jacob Maroga was successful in a lawsuit against the parastatal.

“If paid out, Jacob Maroga’s R85-million claim would be just the latest in a series of staggering salary payouts to unsuccessful executives,” Van Dalen said.

“Since 2001, at least R262,1-million has been awarded to parastatal bosses for their part in running their respective parastatals to the ground.”

These payouts include an R8-million settlement received by former South African Airways (SAA) chief executive Khaya Ngqula after he was fired for his role in a R1-billion tender-rigging saga in 2009.

Before Ngqula, SAA paid CEO Andre Viljoen R3,6-million on top of a salary of R2,2-million and a performance bonus of almost R1-million.

During Viljoen’s last two years at the helm of SAA, the company made losses of R15-billion.

In 2001, former SAA CEO Coleman Andrews received a golden handshake of R232-million, even though the airline posted a net loss of more than R700-million for that year.

In 2009 the South African Broadcasting Corporation (SABC) paid R11-million to its former group CEO, Dali Mpofu. Mpofu took the SABC to court after he was suspended for suspending then-head of news and current affairs Snuki Zikalala.

Former Denel chief executive Victor Moche, who was fired from his position by then-public enterprises minister Alec Erwin, walked away from the parastatal with a golden handshake of about R3-million in 2005.

Land Bank CEO Alan Mukoki received R4,5-million after he quit in 2007 amid R2-billion-worth of fraud.

“This list, it should be noted, is limited only to payouts received by departing CEOs of parastatals.

“The culture of golden handshakes, however, extends far beyond that under the ANC. Recent examples of Lawrence Mushwana [R7-million] and Vusi Pikoli [R7,5-million] illustrate precisely that point.”

Van Dalen said the party would pose questions to the Minister of Public Enterprises Barbara Hogan to establish the true cost of severance packages over the last few years.

“We cannot continue to pay for incompetence like this. This is money that could be spent on ensuring that parastatals deliver quality services to the public that they are required to.” — Sapa

‘Deeper into trouble’
Meanwhile, about R9-million in Eskom shares previously awarded to Maroga will be transferred to him later this year and next year.

“This means that Maroga, despite having left the company last year already, could still make R9-million out of the company if he decided to sell the shares,” trade union Solidarity’s deputy general secretary Dirk Hermann said in a statement on Tuesday.

According to research conducted by the trade union, Maroga will receive 2,9-million shares on March 31 this year.

“The shares were awarded to him on April 1 2007.”

A further four million shares awarded to him on April 1 2008 will be transferred to him on March 31 2011.

Maroga received shares in Eskom worth more than R2-million last year, despite his “poor management” of the company, Hermann said.

In addition, he received a salary of more than R5-million in 2009.

“This is more than double the salary of the country’s president and more than three times the salary of the minister overseeing Eskom.

“In other words, Maroga has already made millions out of Eskom, despite the fact that he led the company deeper into trouble.” — Sapa