| Wed 16 Mar 2005, 9:57 | | State lashes Sasol over white CEO |
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State lashes Sasol over white CEO
Rob Rose
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Chief Reporter
GOVERNMENT levelled a surprise attack on Sasol’s transformation record yesterday, saying it would go so far as to punish the liquid-fuels giant for not having appointed blacks in top positions.
The clash, which has been brewing for some time, is the first major attack on any company`s transformation policy by government — suggesting government is gearing up to become far more active in ensuring that corporate SA complies with its empowerment agenda.
It follows the announcement by Sasol two weeks ago that Pat Davies would succeed Pieter Cox as CEO, while Trevor Munday would become deputy CEO and Cox would move into the chairman’s seat.
Minerals and energy affairs director-general Sandile Nogxina said yesterday government was “disappointed that Sasol, which is one of the least transformed companies and which is yet to announce a BEE deal, didn’t take advantage of the opportunity to promote black people into key managerial positions”.
Nogxina said that as Sasol was initially formed and then subsidised at taxpayers’ expense it would have been expected to set an example for industry when it came to empowerment and transformation.
“But if you look at top management there are no black people there, and even further below, one cannot discern that there is even a plan to (bring in black people),” Nogxina said.
He said government would “definitely oppose” any takeover bid for Sasol by a foreign company as the company still owed a debt to South Africans who had supported it.
Nogxina said government planned to use its “administrative muscle” to enforce change at Sasol, but said he was “not at liberty to disclose what administrative instruments” government would use to penalise it.
He said government would also use its muscle as a Sasol shareholder through the Public Investment Commissioners (PIC) and the Industrial Development Corporation (IDC) “and everything else at our disposal” to force change at the company.
The dominance of white males at Sasol in top management has drawn criticism from a number of players for some time — most notably from the PIC, which owns 13% of Sasol.
Last year PIC CEO Brian Molefe lashed out at Sasol for describing empowerment as a risk in its submissions to the US stock exchange regulator.
In December Sasol again incurred the PIC’s wrath for not appointing its nominee, Imogen Mkhize, to the Sasol board until a huge fuss had been made in the media.
But Sasol denied yesterday that it was blocking transformation, saying that the appointments of Davies as CEO and Munday were “part of Sasol’s succession strategy and … based on retaining the best leadership available to the group”.
“We do have transformation plans in place, and are aiming to do more at senior levels in the organisation (and) key announcements will be made in due course,” the group said
Sasol said the company had “fully repaid all its financial obligations relating to the original formation of the company” — and pointed out that “government had made a very respectable return on its investment in Sasol”.
But Nogxina warned the regulator would be watching Sasol’s progress when it came to transformation very closely.
“I hope that Pat Davies is very aware of the transformation challenges he faces,” Nogxina said.
He said Sasol had repeatedly told the department it was working on an empowerment deal.
“When you negotiate deals, this can take a while. But does it really take centuries to appoint black people?”
Sasol said, however, that 38% of its management were from disadvantaged groups, while it had made significant progress in other areas of empowerment, including doubling its purchases last year from black-owned suppliers to R1,4bn from R640m.
Of delays in putting together an empowerment deal, Sasol said it was “structuring sustainable transactions that are expected to be empowerment models for the future”.
The group said that many empowerment deals had failed in the past, so it was taking time to structure a sustainable deal.
As for any mooted takeover bid, Sasol said it was “not entertaining any takeover bid from any foreign country. South Africa is our home, and our primary listing is on the JSE.”
