Broadband Infraco appoints interim CEO
Malusi Gigaba has seconded Dr Andrew Shaw as interim CEO for Broadband Infraco to replace Dave Smith.
Smith and Non-Executive Director Tumi Magasa resigned last month with immediate effect, however Smith was given the option to stay on until March 15.
This follows from a report published by Moneyweb called Broadband Infraco’s incompetence exposed which outlined how in October last year audit firm Deloitte was commissioned to conduct an urgent internal audit “to review the controls in relation to the contract management function, evaluate the adequacy and effectiveness of key operational and financial controls, and test compliance with the applicable legislation, policies and procedures”.
Of the listed findings, 11 out of 19 were identified as having a potential “catastrophic impact in the department or strategic focus area under review and should be resolved immediately”. In a follow up article Broadband Infraco a “feeding ground” for its own executives Moneyweb revealed how three out of the company’s 11 board members were awarded contracts by the institution where they serve. The three consisted of Chairman Andrew Mthembu, Magasa and Cornelis Groesbeek (also a non-executive director).
After the exposé Minister of Public Enterprises Malusi Gigaba told Moneyweb that he had not seen the audit report as, “the internal audit report is an internal governance matter, which is not generally made available to the minister… however [he] has now requested the report for consideration”.
When asked if the minister would take action against the people responsible for gross incompetence, the ministry replied, “once the minister receives the report, an assessment will be made and appropriate action will be taken if warranted”. It’s unclear if Smith resignation is linked to the ministers said “action”, however it cannot be ruled out.
According to a statement from Ministry of Public Enterprises on Tuesday “Dr Shaw’s secondment will allow sufficient time for the board to engage in a process to recruit a new CEO.
“The Minister has noted the breaches mentioned in the 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.
“Dr Shaw is tasked with, among other things, ensuring that Broadband Infraco complies with the remedial actions proposed in its recent 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 Shareholder and the Board accordingly.
“The Minister has specifically requested the Director General, Mr Tshediso Matona, together with the DDGs for Energy and Broadband as well as Legal and Governance, to oversee the process internally, and 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.”
Dr Andrew Shaw has a BSc and MSc (Engineering) from the University of the Witwatersrand and a PhD in Transport Economics from the University of Leeds. He recently completed an MBA with a specialisation in finance.
He was Acting Director-General of the Department of Public Enterprises from March 2010 to January 2011. His normal function at the Department is Deputy Director-General: Transport, leading a team with responsibility for shareholder oversight on behalf of Government of Transnet, SAA and South African Express (SAX).
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