The cost of corporate governance failures at state-owned companies is getting heftier‚ with CEOs and directors being called to account for non-compliance with the Companies Act.
On Wednesday‚ the High Court in Pretoria heard an application brought by the Companies and Intellectual Property Commission (CIPC) against the longstanding CEO of Nuclear Energy Corporation of SA (Necsa)‚ Phumzile Tshelane‚ for unlawfully using his company vehicle and driver for his private benefit and doing so without the approval of the institution’s board.
The CIPC wants him to be placed on probation for five years for acting "in a manner materially inconsistent with his duties as director of Necsa".
According to Section 162 of the Companies Act‚ interested and related persons‚ including qualifying organs of state‚ can apply for an order declaring a director of a company delinquent or placing him/her under an order of probation‚ an action that has negative consequences once granted‚ including that of exposure to liability.
In November 2016‚ the CIPC took South African Airways board chairperson Dudu Myeni to task after it found she had lied to the public enterprises minister about the number of airbuses her board had decided to sell‚ forcing her to retract the statement as she faced possible prosecution.
- Business Times
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