Ailing state-owned entity (SOE) Broadband Infraco has appointed a new interim CEO.
Minister of public enterprises Malusi Gigaba seconded Andrew Shaw as the interim head. This comes after the resignation of CEO Dave Smith last month.
“Shaw's secondment will allow sufficient time for the board to engage in the CEO recruitment process,” says the Department of Public Enterprises (DPE).
Shaw was acting DG of the DPE from March 2010 until January. His normal function at the department is DDG of transport, overseeing Transnet, SAA and South African Express on behalf of government.
“Prior to this he was lead transport specialist at the Development Bank of Southern Africa, and his role was to coordinate the technical and investment appraisal of infrastructure projects in transport and to work at a senior level to enhance policy development in the sector,” says the department.
Audit investigation
Last month, a revealing Deloitte audit report surfaced, exposing shortcomings relating to internal control processes in Broadband Infraco's procurement and contract management environments.
The SOE conceded that the findings of the report are correct and are under investigation.
The DPE says Gigaba has noted the breaches mentioned in the recent internal audit report, and takes a dim view of the lack of systems and apparent lapse in leadership by the board and management in critical moments.
Shaw is tasked with, among other things, ensuring Broadband Infraco complies with the remedial actions proposed in this internal audit report, and supervising and overseeing disciplinary actions against all mentioned in the report.
“He will supervise the forensic investigation into the affairs of the company, which has already been commissioned by the board, and undertake commercial and legal due diligence on all major financial contracts conducted during the past two years, and to inform the shareholders and the board accordingly,” says the DPE.
The department adds that Gigaba specifically requested DG Tshediso Matona, together with the DDGs for energy and broadband, as well as legal and governance, to oversee the process internally, and to report to him regularly on progress.
“In addition, the department will be submitting its recommendations to Cabinet for the filling of the vacant positions to strengthen the board of Broadband Infraco, and an announcement will be made in due course.”
It was previously speculated that poor governance and procurement practices were the cause of the sudden and unexpected departure of Smith, calling into question the future of the already faltering state entity.
Andrew Mthembu, chairman of the Broadband Infraco board, said discussions with the shareholders will address some of the interventions necessitated by the internal audit report.
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