/ 27 February 2015

Energy minister shields ‘key Zuma nuclear ally’

Tina Joemat-Pettersson
Tina Joemat-Pettersson

Nuclear boss Phumzile Tshelane is seen as a lynchpin in President Jacob Zuma’s contested plan for new nuclear power stations. He is the chief executive of the South African Nuclear Energy Corporation (Necsa) and, like the president, he has held several meetings with the Russians, the barely disguised frontrunners in the nuclear build race.

Necsa, a state-owned entity, is earmarked to drive the nuclear programme’s local skills development and industrialisation plans.

But early this month, Necsa’s board suspended Tshelane for disciplinary lapses, which included allegedly donating state money to the ANC.

Now, in an astonishing about-turn, Energy Minister Tina Joemat-Pettersson stands accused of stepping in, allegedly under pressure from above, to protect him.

Six weeks earlier, in mid-December, she wrote to the Necsa board indicating her support for taking disciplinary action against him.

On February 1, the board confirmed its suspension of Tshelane on a raft of allegations, including making an unapproved R150 000 payment towards the ANC’s 103rd birthday celebrations in Cape Town in January. But a day later, Joemat-Pettersson intervened.

Minister’s swift intervention
At a hastily convened special board meeting on February 2, she and her two ministerial advisers called the Necsa board off Tshelane’s back, and urged it to let him return to work and for all of them to focus on the entity’s “strategic direction”, which includes playing a leading role in the new nuclear build programme.

But most of the board members refused to lift his suspension. She then announced a task team last Friday to investigate “the affairs” of the board.

“This investigation has been prompted by numerous complaints and allegations levelled against board members and the management … alleging serious mismanagement in relation to corporate governance and management issues,” read a media statement issued by her spokesperson.

It added that the minister had also asked the task team to investigate the National Radioactive Waste Disposal Institute board, but a source familiar with the events believes this is a red herring. The institute was launched less than a year ago.

In a written directive to the Necsa board on the same day that she announced the task team, Joemat-Pettersson confirmed the instruction allegedly issued at the February 2 meeting: “The board and the [chief executive] must return to their normal duties of attending to the mandate and function of Necsa”.

She listed “the following urgent issues” they should attend to, which include:

  • “The plans indicating the state of readiness for Necsa to take up a significant role in the nuclear new build programme of government”; and
  • “The strategy and plans for leading the national skills training and development for the nuclear and energy programme.”

A board divided
The resultant standoff has torn Necsa apart, with the board pitted against management. Tshelane returned to work this week but the board refused to lift his suspension. The minister’s about-face is made clear by correspondence seen by amaBhungane.

It is understood the board had kept Joemat-Pettersson informed about the allegations mounting against Tshelane since August last year, and that she had encouraged it to suspend and discipline him as recently as December.

In a December 19 letter to the board’s social and ethics committee, seen by amaBhungane, the minister wrote: “I am of the opinion that Necsa should initiate a disciplinary process for all misconduct on the part of the Necsa chief executive officer [Tshelane] which is currently not the subject of any court litigation processes.

“Furthermore, and in accordance with … Necsa’s disciplinary code and procedure, Necsa should consider the appointment of a vastly experienced external chairperson to preside over these proceedings.”

So what changed?

The board notified Tshelane of its intention to suspend him in a January 28 letter, also seen by amaBhungane, which set out the key allegations against him (see The case against Tshelane below).

Behind the minister’s back
A source familiar with these events said a belligerent Tshelane, instead of giving reasons why he should not be suspended, demanded to see the minister’s December letter authorising the board to act against him.

The source, who claims to have been “reliably advised by someone in the [energy] department”, claimed that Tshelane approached the minister’s adviser, Senti Thobejane, at the same time.

“Senti went to Zuma and that’s how Tina [Joemat-Pettersson] got an instruction,” the source said.

Although this is hearsay and has been denied by Tshelane, Thobejane and Joemat-Pettersson (see The players respond below), there is circumstantial evidence to suggest that Thobejane has Zuma’s blessing.

Presidency spokesperson Mac Maharaj did not respond to questions by the requested deadline.

All the president’s men
Like Tshelane, Thobejane is allegedly also a lynchpin in Zuma’s nuclear energy plans. Nominally a special adviser to Joemat-Pettersson, Thobejane was in fact retained by two energy ministers before her, allegedly at Zuma’s insistence.

Thobejane is himself a one-time chief executive of Necsa but resigned in 2005, allegedly after irregularly approving a 25% pay rise for himself. He has denied the allegation.

The Sunday Times reported in December that Thobejane doubles as a nuclear adviser to Zuma. Thobejane told the newspaper: “I was appointed by the ministry of energy, but one of my functions is to provide advisory services to the president.”

Another source, also a part-time adviser to Zuma, has since told amaBhungane that Thobejane advises both Zuma and the ANC on nuclear issues.

The special meeting called by Joemat-Pettersson was held amid tight security – all those attending were apparently asked to leave their cellphones outside. She opened the meeting but then handed it over to Thobejane.

“It appeared to the board members present that the minister was steering a middle line between holding a meeting and simultaneously distancing herself from its outcome,” said a source well placed to give an account of the meeting.

“Senti asked the board to stay disciplinary proceedings against Tshelane, and the minister’s other adviser, Archie Lucas, told everyone to go back to work and focus on the strategic direction of the company.”

The source said some board members expressed their unhappiness privately that the instruction was “tantamount to being asked to ignore their fiduciary duty”.

Board upholds Tshelane’s suspension
Although Necsa is wholly state owned, with the energy minister as its nominal shareholder, the board that she appoints is legally entitled to perform an independent oversight role.

Despite the minister’s alleged instruction, the majority of the board members later resolved to uphold Tshelane’s suspension.

As chief executive, Tshelane is also a board member but amaBhungane understands that his influence on the board has been whittled down gradually, so that he now enjoys the support of only the chairperson and another board member.

The chairperson, Mochubela Seekoe, is the former South African ambassador to Russia. Russian-educated and Russian-speaking, Seekoe is regarded by critics as another lynchpin in the plan to champion Russia’s nuclear bid, an allegation he denies.

Several of the board’s allegations made against Tshelane include him approving irregular payments of one sort or another to Seekoe (see The case against Tshelane below).

Last Sunday, two days after the minister’s directive to the board and chief executive to all go back to work and her announcement of the task team investigation, Tshelane filed an urgent application in the Labour Court.

In it, he asked the court to overturn the board resolution to suspend and discipline him, and also asked it to dissolve the board.

But Tshelane withdrew his application before Judge Anton Steenkamp on Wednesday morning. His legal representative, Andrew Laka SC, said Tshelane “was back at work”, rendering his application irrelevant.

The fight gets messier
Advocate George Avvakoumides, representing the five board members and Necsa’s company secretary, told the court that Tshelane had “taken the law into his own hands and managed to somehow access his office”.

“Steps will be taken today [Wednesday] to remove him from the premises,” Avvakoumides warned.

Steenkamp noted Tshelane’s withdrawal, but ordered him to pay the costs of bringing his application to court.

Meanwhile, the standoff between Tshelane and the board has divided Necsa, with its executive committee (exco) issuing a directive to all staff in his support on Monday.

“Exco regrets that neither the staff of Necsa nor the exco was informed of the decision by some board members to deny access by the [chief executive] to the Necsa site.

“Exco is totally opposed to the actions, which embarrassed both the [chief executive] and Necsa,” the communiqué said. Tshelane allegedly had a hand in the appointment of at least four of the exco members, whose appointments are currently being contested in court.

This week members of the National Education, Health and Allied Workers’ Union picketed outside the company’s cafeteria at Pelindaba in support of Tshelane.

But other Necsa employees affiliated to the trade union Solidarity are understood to have written to Joemat-Pettersson, alerting her to allegations of “nepotism”, “financial mismanagement” and “misappropriation of funds” by Tshelane.

AmaBhungane has also seen a detailed dossier of allegations made against Tshelane, compiled by the Solidarity-affiliated Necsa employees.

The case against Tshelane

The chief executive of the South African Nuclear Energy Corporation (Necsa), Phumzile Tshelane, allegedly sanctioned a R150 000 payment from the state-owned nuclear company towards the ANC’s 103rd birthday celebrations in Cape Town in January – and then sought board approval afterwards.

According to the board’s January 28 letter to Tshelane informing him of the grounds for his suspension, this is not the first time he has diverted funds to the governing party without permission.

He also approved a R76 000 payment for a Necsa table at the ANC’s gala dinner following the launch of the party’s election manifesto in Nelspruit in January 2014, and approved a board appearance fee for Necsa chair Mochubela Seekoe for sitting at the table.

The letter states that the board is proceeding against Tshelane following a “directive” from Energy Minister Tina Joemat-Pettersson.

Earlier correspondence between Joemat-Pettersson and the board shows that, as early as October last year, the minister was aware of a wide range of other allegations made against Tshelane, including:

  • Using a company luxury car and driver for private purposes; and
  • Approving remuneration for Seekoe’s board appearances in 2013-2014, which was approximately three times that received by the next highest-paid board member, and R452 480 more than the stipulated guideline.

A board member has also brought a court application that seeks to reverse the appointment of four group executives who Tshelane played a key role in appointing, allegedly without full board approval.

Necsa, responding on behalf of Tshelane and Seekoe this week, said: “Like other companies and state-owned enterprises, participation in such meetings [of the ANC] allows for unique high-level networking with decision-makers.”

It also said:

  • “All executive appointments were properly concluded with all the required checks, approved by the board, and are valid; and
  • All the other allegations are unfounded.”

A dossier of other allegations compiled by Necsa employees claims that the company’s financial position has nose-dived from an R18-million cash surplus at the end of the 2013-2014 financial year to a projected shortfall of R62-million as of this month.

“This will have a serious impact on Necsa honouring its obligations to the nuclear regulator, employees and creditors,” the dossier states.

Necsa declined to confirm or deny these figures, but said “no such scenario has occurred or been envisaged”. – Lionel Faull

The Players Respond

The South African Nuclear Energy Corporation (Necsa), and on behalf of Phumzile Tshelane and Mochubela Seekoe:

1. About Phumzile Tshelane allegedly appealing to Senti Thobejane for help with reversing his suspension:

  • The … statements contained in your question do not deserve a comment from Necsa. They appear based on made-up speculation and conjecture.

2. About the February 2 2015 special board meeting, called by Energy Minister Tina Joemat-Pettersson and allegedly led by Thobejane:

  • There is no substance to such statements.

3. About Tshelane, Seekoe and Thobejane being alleged lynchpins in President Jacob Zuma’s nuclear energy plans:

  • This would seem to be an unfortunate allegation that has no basis in fact. It also seeks to impugn the image of the president. Government, through many public statements, has explained in detail the nuclear build process.

Necsa board members:

  • AmaBhungane tried to contact all five board members who endorsed Tshelane’s suspension. Three declined to comment and two did not respond to phone calls and SMSes.

Energy department, and on behalf of Thobejane and Joemat-Pettersson:

  • The department of energy is unable to comment or issue any further statement on this matter. We appeal that the task team must be given the necessary space to conduct its investigation and, thereafter, report on its findings and recommendations without prejudice.
  • We also wish to state that the minister took the decision independently without any instruction whatsoever from the president, and such rumours are devoid of any truth, which seeks to cast aspersions on the standing and integrity of the persona of our state president.

President Zuma:

  • Presidency spokesperson Mac Maharaj did not respond to questions by the requested deadline.

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The M&G Centre for Investigative Journalism (amaBhungane) produced this story. All views are ours. See www.amabhungane.co.za for our stories, activities and funding sources.