Uncategorized 23.7.2015 07:03 pm

PetroSA’s R15b loss confirmed in court

Image courtesy of: www.petrosa.co.za

Image courtesy of: www.petrosa.co.za

South Africa’s state-owned petroleum company PetroSA suffered a R15 billion loss in the 2014/15 financial year under the watch of the company’s suspended bosses, the Western Cape high court heard on Thursday.

The company’s suspended chief financial officer (CFO) Lindiwe Mthimunye-Bakoro brought an urgent application to have two of the company’s board meetings in which directors voted in favour of her suspension, as well as that of chief executive officer (CEO) Nosizwe Nokwe-Macamo, declared invalid.

PetroSA maintained that both board meetings were legally constituted and that the embattled company’s board had every right to suspend Mthimunye-Bakoro and Nokwe-Macamo.

“There are concerns and there’s reservations and there’s an investigation,” said advocate Jeremy Muller, for the PetroSA board.

“Under her [Mthimunye-Bakoro’s] watch and under that of the CEO, the company managed to suffer a loss of R15 bln.”

Advocate Iain Bremridge, for Mthimunye-Bakoro, countered and said: “The correct fact is that R13 bln of that [amount] was spent before she was employed.”

Muller further argued that Mthimunye-Bakoro should have approached the labour court, and not the high court.

“There is a jurisdictional bar to this application being entertained by you [Judge Dennis Davis] and we are right [in that] the rest becomes moot,” he said.

But Bremridge told Davis that they were not seeking to declare his client’s suspension invalid, but rather the board meeting, as they took issue with how the meeting was conducted.

The board originally suspended both the CEO and CFO on June 18 at a board meeting to which the two were not invited.

Then, on July 13 the board held another meeting after it invited both parties to make written representations on their suspensions.

The board argues the women could not participate in the lead up to the vote on their suspensions as the Companies Act precluded them from doing so because they had a direct personal financial interest in the matter which the board was considering.

Bremridge, in turn, argued this was not true as Mthimunye-Bakoro was still being paid while on suspension and therefore the matter did not impact her financially.

Davis said he would rule on the application next week.

 

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