Four Necsa board members resign and slam Gwede Mantashe
In a letter sent to Mantashe’s office on Tuesday‚ the board laid bare a raft of problems facing the company. The resignations at the start of a new year add to an air of instability in state-owned firms‚ and follows closely the resignation of Eskom chair Jabu Mabuza last week.
The letter‚ seen by SowetanLive's sister publication TimesLIVE‚ revealed that Necsa has been “technically insolvent” since 2016. “Upon assuming our positions as directors [late in 2018] it became apparent that Necsa has been making losses from as far back as 2014‚” it reads.
The company‚ tasked with research in nuclear energy and the processing and storage of nuclear material‚ had struggled to pay salaries to staff in December last year.
In order to mitigate years of losses amounting to as much as R554m‚ said the former board members‚ Necsa had extended debt through loans‚ overdraft facilities and even dipping into emergency funding.
“Necsa has been technically insolvent since 2016 and has survived using ringfenced funds which has cumulatively had an impact of the going concern status which the new board face.”
They alleged that Mantashe‚ as the state shareholder of the company‚ had been warned of the company's dwindling cash reserves and parlous financial state.
The four board members who submitted their joint resignation‚ Pulane Kingston‚ Dr Pulane Molokwane‚ Mathlodi Ngwenya and Bishen Singh‚ said that four other board members had resigned in 2018 but were never replaced‚ despite their pleas to Mantashe. “Despite our repeated requests to you since July 2019 to urgently augment the board‚ this matter has not been prioritised making to more difficult to function properly.”
The four said that despite their best and strained efforts to keep the firm afloat‚ they had consistently lacked Mantashe’s support.
“A clear example of this lack of support includes your [Mantashe’s] public utterances that there was no board of Necsa while continuing to interact with us‚” they wrote.
They went on to accuse Mantashe’s ministry hamstring their oversight function.
“Your unavailability and non-responsiveness is concerning. This‚ together with the overreach by your officials which undermines the responsibilities and authority of the board‚ renders it untenable for us to continue serving as directors‚” the four said.
Efforts to contact Mantashe were unsuccessful at the time of publishing. Any comment or response will be added once received.