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UMGENI WATER - BIUMWA - Governance Update

Release Date: 15/08/2017 14:55
Code(s): UG26 UG21     PDF:  
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BIUMWA - Governance Update

Umgeni Water
Company code: BIUMWA

PRONOUNCEMENT ON UMGENI WATER GOVERNANCE UPDATE:



On the 30th of June 2017, a mutual separation agreement was
reached between the legal representatives of the former Chief
Executive of Umgeni Water, Mr Cyril Gamede and the outgoing Board
of Umgeni Water for Mr Gamede to exit Umgeni Water.


In terms of the agreement reached, Mr Gamede’s last day of
employment with Umgeni Water was 30 June 2017. Effective from 1
July 2017, he would cease to be in the employ of Umgeni Water.
Mr Gamede’s five-year tenure as Chief Executive would have ended
on 19 August 2017. Terms of the settlement reached are largely
financial in nature. They will remain confidential as per
agreement between the Board and Mr Gamede’s attorneys.


Mr Gamede had been placed under precautionary suspension to allow
for investigations into wide-ranging allegations of impropriety
and unethical conduct levelled against some senior Umgeni Water
officials. These allegations are contained in various anonymous
email letters that were sent to stakeholders, including the Board
and Minister of Water and Sanitation.


In an unrelated matter, the Board’s term of office came to an end
on 30 June 2017 and the Minister of Water and Sanitation has
decided not to extend it, as has already been announced in an
internal communique. The Board was appointed on the 1st of July
2009 and, by 30 June 2017, had already served two four-term terms.
The Minister’s decision is in line with a judgment by the High
Court in Pietermaritzburg which declared the extension of term
of office of Board members as invalid. This judgment was in a
case unrelated to Umgeni Water.


New members of the Board will be appointed as soon as practically
possible; this process however normally takes up to 6 months. The
Acting Chief Executive, Mr. Thami Hlongwa CA(SA) (ordinarily
employed as the Chief Financial Officer), will in the interim
serve as the Acting Chief Executive and Accounting Authority. An
interim governance framework has been developed and approved by
the Ministry of Water and Sanitation for implementation, in order
to maintain proper governance and oversight over all operational
activities of the organisation.  In line with the interim
governance framework, an independent Audit Committee has been
appointed to continue fulfilling fiduciary duties related to
Governance and Financial Management in the organisation, as per
King IV and the Companies Act provisions.


On the day agreement was reached with the former CE, an anonymous
letter was sent to members of the Board, withdrawing allegations
that were made against some senior officials of Umgeni Water. The
writers also unreservedly apologised for making the allegations
and said they regretted their action.


The Ministry of Water and Sanitation was informed of the mutual
agreement reached with Mr Gamede, relating to his departure from
Umgeni Water and the anonymous letter received that withdraws the
allegations.



Date 15 August 2017

Enquiries: S. Madonsela – 033 341 1544/1066

Sponsor: Investec Bank Limited (“Investec”)

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