Editorial: SOEs — Another victim of patronage politics

Anyone hoping for political stability in our state-owned enterprises is hoping against hope.

That will remain a pipe dream for as long as our government leaders continue to view these companies as tools for dishing out patronage.

The case in point is the decision by Transport Minister Dipuo Peters to dissolve the board of the Passenger Rail Agency of South Africa this week. By yesterday she still had not explained her decision to axe all eight board members.

Let us be clear on this. In any institution or company, the board is always at the centre of good governance. So the minister was within her rights to fire the board if she felt it was failing to discharge its fiduciary duties in any way. She is expected, by law and in her capacity as the shareholding minister, to show board members the door when they fail to adhere to relevant legislation and regulations and when she begins to doubt their commitment to good governance.

story_article_left1

But, while she may have taken the right decision for all the right reasons, her failure to clearly communicate her reasons for dissolving the board raises questions. It gives the impression and supports the dominant sentiment that she has taken sides in the fight between the board and its former acting CEO, Collins Letsoalo.

Letsoalo was brought in last July in an attempt to bring stability to the rail authority after its previous boss, Lucky Montana, stepped down amid claims of corruption and maladministration.

It is difficult not to agree with those who say Peters is protecting Letsoalo. In the first place, Letsoalo was never the board's choice. He was imposed on the board by Peters when she announced that she had seconded him to Prasa to turn around the fortunes of the battling agency.

The board axed him from his acting position after this newspaper revealed he had insisted that he be paid a monthly acting allowance of R380000. This was after he demanded the R5.9-million annual package that Montana earned. A day later the board withdrew his secondment and sent him back to his previous position as chief financial officer of the Department of Transport. This week they were fired after submitting a report to the minister on why they acted in the manner they did against Letsoalo. They were given no reasons. The former board members have now written to the minister demanding an explanation.

They are even threatening to go to court to force the reasons from her. "It comes as a surprise to us that the minister would have taken such a decision without notice to members of the board, nor followed due process," said axed board chairman Popo Molefe.

Sadly, this is exactly what is happening in other state-owned companies, where fights between board members and their political heads are well documented. This, while the country suffers.