CONTRARY to her denials in the National Assembly last Friday, Energy Minister Tina Joemat-Pettersson recommended Tshepo Kgadima to serve as chairman of the board of PetroSA.
Mr Kgadima’s suitability has been questioned following allegations that he committed fraud that led to the loss of millions of rand by investors while he was CEO and president of LontohCoal.
Questioned during a debate in the National Assembly last week about why she hired "corrupt people" and an "alleged fraudster", Ms Joemat-Pettersson said the appointment of a chairman was the responsibility of the board of PetroSA’s holding company, the Central Energy Fund (CEF), and was not a Cabinet decision.
CEF chairwoman Sankie Mthembi-Mahanyele has declined to comment on the appointment and Ms Joemat-Pettersson did not respond to requests for comment on Sunday when it emerged that she had, in fact, recommended Mr Kgadima to the board, pending the Cabinet’s agreement.
In a letter sent to Ms Mthembi-Mahanyele on October 10 — on a minister of energy letterhead and signed by her — Ms Joemat-Pettersson said she had considered the demands placed on the CEF board and recommended Mr Kgadima’s appointment, along with three other candidates.
She wrote: "It is recommended that the aforementioned potential appointments are made for a three-year period, effective 1 December 2014 to 30 November 2017, and ultimately subject to the concurrence of Cabinet.
"Copies of all four potential candidates’ CVs are attached ... for your consideration. In addition, please note that I have sent letters to the aforementioned candidates informing them that I have recommended their appointment to the CEF board."
Ms Joemat-Pettersson also wrote in her letter that advocate Brenda Madumise retain her position as interim chairwoman of the PetroSA board "until such time that the minister, in consultation with the CEF board, identifies a potential candidate who can suitably perform the role of chairperson of the PetroSA board. Please note that the SOE (state-owned enterprises) oversight unit shall inform the CEF as soon as Cabinet’s concurrence has been received."
A day before the CEF’s announcement of the new PetroSA board on November 13, Mr Kgadima’s CV was e-mailed to the CEF board, with five others. The e-mail was sent by Nduduzo Kleinbooi, assistant director, legal and governance compliance, in the Department of Energy, and noted Ms Joemat-Pettersson intended to replicate its contents in an official letter later that day. The e-mail said the minister recommended Mr Kgadima for appointment as PetroSA chairman.
Zodwa Vissers, Ms Joemat-Pettersson’s spokeswoman, did not respond to calls and SMS questions on Sunday.
CEF spokesman Mandla Tyala also did not respond to questions sent to him.
Mr Kgadima is accused of swindling more than 250 investors who allegedly put money into LontohCoal between 2010 and 2012 for projects that did not exist. He claimed to have mines in Zimbabwe and SA, but this is denied by authorities in both countries.
A Zimbabwean minister, who met Mr Kgadima in 2011, dismissed his claims, saying: "That guy (Mr Kgadima) is a big criminal. He never invested anything here, nor does (he) own anything. Not even a latrine toilet."
The minister declined to be named for diplomatic reasons.
Mr Kgadima is allegedly barred from doing business in mining in Zimbabwe after misrepresentations pertaining to Liberation Coal and Makomo Coal, the mines he claimed he owned.
On Friday, a merchant banker who was approached by Mr Kgadima in May 2012 to advise on his intended Hong Kong initial public offering (IPO), said the bank "walked away after making a few calls and (trying to) verify his claims, which were all untrue".
"This is probably the biggest fraudulent case we have seen in recent years. We stopped working with him as soon as it became transparent to us that the business case was fraudulent." The banker asked not to be named.
According Mr Kgadima’s CV, sent to the CEF by Ms Joemat-Pettersson, he "is currently leading LontohCoal to achieve game-changing strategies".
The other candidates’ CVs were lengthy documents listing their employment histories, references and in some instances copies of their degrees and diplomas. Mr Kgadima’s sole qualification is a "postgraduate diploma NQF7" obtained in 1992.
His one-page CV lists attributes rather than accomplishments. His employment record is as CEO of Lontoh SA from April 2003 to February 2008, and president and CEO of LontohCoal from March 2008 to the present. He says he is a former investment banker and company director with 18 years’ experience. "He is an effective thinker and doer with proven skills and expertise in investment banking, corporate finance, strategic planning and corporate turnaround," the CV reads.
"He is founding president and CEO of LontohCoal and has been instrumental in its corporate and commercial success as a mining and exploration company with coal and energy assets and transport infrastructure projects in SA, Mozambique and Zimbabwe. In the last 11 years he has gained considerable experience and success as an investment banker with mineral resources industry focus on platinum, gold, coal and iron ore."
He lists "game-changing" strategies including the drive to "become one of the first African companies to IPO on the Hong Kong Stock Exchange; design and build the longest coal slurry transportation pipeline in the world and design and build a 50,000 barrels-per-day coal-to-liquids plant in Zimbabwe".
He has "executed client mandates and structured trade finance deals for private and public sector clients in Equatorial Guinea, Guinea-Conakry, Ghana, Ivory Coast, Kenya, Tanzania, Zambia and Zimbabwe valued in excess of $500m".
Additional reporting by Linda Ensor