SA state company makes R14.5 billion loss, pays bonuses to executives anyway
State oil company PetroSA has paid senior executives millions in bonuses despite reporting a R14.5 billion loss, the biggest ever recorded by a government owned firm.
The Sunday Times reported that eleven executives received as much as R17.3 million, having received legal opinion that said “affordability would not qualify as a justifiable reason” not to pay them.
In a memorandum sent to staff on Thursday, acting CEO Kholly Zono said the bonuses were not linked to the company’s performance but were part of PetroSA’s short-term incentive plan, a skills-retention scheme.
The legal opinion found that there was “no merit in the argument” that the bonuses should not be paid.
In October, PetroSA confirmed its losses at a sitting in Parliament. It said that R12.2 billion rand was lost through Project Ikhwezi, a gas gas venture that yielded only 10% of the expected gas.
An additional R2.2 billion was lost through an investment in Ghana’s Jubilee oil field.
The Sunday Times noted that Andrew Dippenaar, who headed up Project Ikhwezi, received R2.3 million. Dippenaar returned to work in July after being suspended for 14 months amid board unhappiness about the project.
Head of legal services Mokgaetsi Sebothoma was paid R2.4 million despite heading up Project Irene – an attempt to buy Engen’s operations, which failed.
Thabiso Manne was paid R2.2 million. Manne was in charge of Project Mthombo, which failed to meet its target of building a new refinery in the Coega industrial development zone near Port Elizabeth.
Richard Mkhonta, the head of capital projects, who worked closely with Dippenaar on Ikhwezi, was also paid a generous R1.3 million, while other executives who worked under Dippenaar, Sebothoma and Manne were paid bonuses of between R317000 and R1.6 million, the Sunday Times said.
The paper also reported that PetroSA aims to cut its workforce of 1,800 by 40%.
Read the full article in the 4 December edition of the Sunday Times.
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