Tshepo Kgadima. Picture: THULANI MBELE
Tshepo Kgadima is removed from the Times Media Limited building in Rosebank, Johannesburg. Picture: THULANI MBELE

THE board of the Central Energy Fund (CEF) on Thursday rescinded the appointment of Tshepo Kgadima as chairman of state oil company PetroSA, following a two-week media storm that erupted after his appointment, when allegations of fraud were made against him.

Board chairwoman Sankie Mthembi-Mahanyele, who had remained silent since his appointment, said on Thursday: "In the light of the current controversy, the board felt it would be impossible for Mr Kgadima to carry out the responsibilities of the chairperson of PetroSA effectively and, accordingly, has decided to rescind the appointment."

Mr Kgadima is accused of swindling more than 250 investors who put money into his company, LontohCoal, between 2010 and 2012 for projects that did not exist. He claimed to have mines in Zimbabwe and SA, but this has been denied by authorities in both countries.

Among the accusers is former cabinet minister and African National Congress (ANC) stalwart Zola Skweyiya, who says he lost R1m in pension money to Mr Kgadima. Mr Skweyiya said on Thursday he was pleased the appointment had been rescinded.

Despite the accusations, Mr Kgadima was recommended for the chairmanship by Energy Minister Tina Joemat-Pettersson, an action she has since denied.

In another indication that Mr Kgadima is well connected politically, he is linked to ANC-owned investment company Chancellor House, where he serves as a director of subsidiary Chancellor House Financial Services.

While it is not clear whether the subsidiary actively trades — Chancellor House Holdings is a private company and not many of its investments are publicly known — he remains registered on the Department of Trade and Industry’s company database.

Chancellor House Holdings CE Mamatho Netsianda said on Thursday the financial services subsidiary did not exist. However, Mr Netsianda is listed as a fellow director along with Mr Kgadima.

Mr Kgadima drew further unfavourable public attention to himself last week by presenting himself at Business Day’s Johannesburg offices to film his confrontation of this newspaper’s editor, Songezo Zibi. He later had to be removed by security.

The drama around the unsuitability of Mr Kgadima comes as several state-owned companies buckle under the strain of inappropriate and politically driven appointments of board members and executives.

PetroSA, regarded as a strategic company by the government, has sizeable cash reserves and is seeking to widen its commercial activities. One proposal is the purchase of an 80% stake in Engen, owned by Malaysia’s Petronas.

The R18bn purchase would include Engen’s retail fuel business as well as its refinery, which needs to be refitted or decommissioned. The proposal has strong political support from the Presidency and Department of Energy, which have, on several occasions, sought Treasury backing.

While it is believed this has not yet been forthcoming — the Treasury would not comment — it has remained high on the political agenda.