HomeIndustry SectorsFinance and PolicyCourt finds the Radebe-appointed Necsa board, unlawful

Court finds the Radebe-appointed Necsa board, unlawful

The effect of Friday’s (16 August) judgement in the North Gauteng High Court in the case brought by Dr Kelvin Kemm, Phumzile Tshelane and Pam Bosman against former minister of energy Jeff Radebe is that the appointment of the current Necsa board by the former minister in December 2018 was declared unlawful, and was set aside.  

According to legal opinion at Edward Nathan Sonnenberg, Necsa now effectively has no board in place. It follows from this that, any and all decisions that the unlawfully-appointed board now makes, and has made, stand to be reviewed.

There is an urgent need for a lawfully appointed board to now be put in place by the current Minister of Mineral Resources and Energy, Gwede Mantashe, which could be either an interim or permanent board.

The Friday court decision does not return the previous board chairman, Dr Kelvin Kemm, and board finance head, Pam Bosman, to the board. Also, the unlawfully-appointed Radebe board should have served only until the end of March 2019, which was the remaining statutory period of that board’s term of office, according to legal opinion.

A media statement pointed out that the previous board had always had confidence in Phumzile Tshelane as Group CEO and were amazed when he was suspended by Radebe.

The Radebe-appointed board then charged Tshelane with mismanagement allegations, which were a set of collective board decisions, taken by people who in the majority had no knowledge or experience of running a nuclear organisation and had no experience of working with him. The accusations included allegations that the Group CEO had held a golf day for suppliers and customers.

Selling off Necsa nuclear medicine division

Necsa is a world leader in the production of advanced nuclear medicine. Over previous years daily exports were taking place to over 60 countries, earning significant money in foreign exchange.

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Necsa had become one of the few SOEs that had made an operating profit and which paid tax to SARS.

However, it had earlier been revealed in the media that former minister Radebe had secretly undertaken negotiations with an American medical company to sell a ‘substantial portion’ of a national asset, the highly profitable Necsa nuclear medicine division to them.

The former minister had admitted in court papers that he had started to assemble his new board some four months before informing the incumbent board of any of his allegations. Radebe then dissolved the board after instructing them to answer his allegations within five days, which included a weekend.

Their extensive reply was rejected by Radebe in under two hours and they were then ordered to leave office immediately. Tshelane was ordered off the Necsa property within the hour.

Nuclear medicine

Members of the previous board are impressed and supportive of Minister Gwede Mantashe’s pronouncements during his recent budget speech dealing with pressing Necsa related matters. These included the launching of the pharmaceutical company Ketlaphela to produce HIV medicine locally.

Necsa had become the only company in the southern hemisphere to have been able to successfully develop this complex medicine, which is desperately needed by South Africa. It seems that under the current board any progress with implementing HIV vaccine production has ground to a halt.

In addition, Mantashe recognised the collaboration between Mintek and the Necsa chemicals division, Pelchem, which has been able to produce critical chemicals for uses in industrially important processes such as speciality steel making and in producing critical chemicals used to manufacture high-strength magnets, such as found in cell phone speakers. These chemicals are derivatives of nuclear chemicals processing. This work had effectively been stopped by the current board.

Dr Kemm commented: “It is a great relief that the court has found that my board was guiding Necsa in a direction which is in the interests of the country and of corporate profitability

“It was extremely upsetting to have been confronted by the former minister and informed that he was conducting discussions with a foreign company with a view to selling a ‘substantial portion’ of our profitable division to them, but had not consulted me or the Group CEO.”

He continued: “I have been proud of the incredible achievements of Necsa staff who for some years have worked 24 hours a day seven days a week to export life-saving medicine daily to countries around the world”.

Bosman also commented: “While I oversaw the financial affairs of Necsa, we won an award from the Auditor General for excellence in our accounting practise and for submitting totally clean books. I was very offended when Jeff Radebe made accusations against me of unprofessional conduct and poor practise. He was wrong. The court decision has vindicated me.”

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