Hello, Eskom, Armscor? Hello? Hello, anybody there?
- Branko Brkic
- 12 Nov 2009 12:02 (South Africa)
Oh no, not another one! Hot on the heels of the Eskom crisis, press reports on Thursday morning suggest Armscor is also involved in a face-off between the CEO and his board.
The Independent is reporting that Armscor's board chairman, Popo Molefe asked chief executive officer Sipho Thomo to resign last week, but, in a bizarre echo of the Eskom saga, Thomo has refused to budge.
Beeld and associated website Fin24.com are reporting they have leaked documents which suggest that Armscor's management team, led by CEO Thomo, "deliberately" tried to dupe the company's board of directors by pretending that everything at the state institution was on course. Thomo recently tarnished his public reputation by revealing the cost of Airbus A400M military transport aircraft would set South Africa back R47-billion rather than the budgeted R17-billion, resulting in the order being cancelled.
The vested interests in maintaining this contract would surely have been enormous, but they have clearly been outmanoeuvred by Thomo. Now there is a move to outmanoeuvre him.
The news means that all the largest and most important public enterprises in SA are formally in a states of leadership disarray, with Transnet and SAA currently being run by acting CEO’s and both Eskom and Armscor in even greater states of confusion.
Beeld reports it has confidential documents which were “collected by representatives of three-quarters of Armscor's senior managers” about a consultation process intended to address the deterioration of managerial relationships that began two years ago.
There had been broad unhappiness among senior managers about Thomo's "autocratic", "intimidating" and "dictatorial" management style. But the process stalled for 12 months until recently when the management team declared in a letter to the board that all differences had been settled.
"This is a serious breach of confidence and a clear indication of a lack of bona fides on the part of the management team," senior officials wrote to the Armscor executive last week.
Armscor chairman, Popo Molefe told MPs on Wednesday that the process to remove Thomo had begun when his service contract was recently reviewed. As a consequence, restrictions had been placed on his ability to do deals. He also added a couple of jabs for a good measure, saying that between 2008 and this year Thomo's salary increased by 89% from R1.7 million to R3.27 million.
In addition to the Thomo offensive, Nathi Barotho, Armscor's manager of corporate affairs, had previously lodged complaints of sexual harassment against him. Although Thomo was acquitted, he had to undergo gender-sensitivity counselling.
"We also sent him on a leadership course. But he refused to co-operate and we don't know why," said Molefe.
One intriguing sub-question is why the normally outspoken public enterprises minister Barbara Hogan has been so silent on any of the many mini-explosions taking place within her portfolio.
The difficulties also place a question mark over who has the ultimate power in deciding positions of influence in parastatals – the ANC deployment committee or government itself.
And after the Eskom PR disaster, it will be interesting to follow how the Armscor affair-in-the-making will be dealt with by the powers-that-be. Stay tuned, it won’t be boring.
By Tim Cohen
Photo: South African aircraft manufacturers Denel Aviation launch their pre-production combat helicopter, the Rooivalk (Kestrel), at its first public display, February 17. The country's air force will buy up to 12 of the first choppers to come off the production line. REUTERS/Juda Ngwenya