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”) Date: 15/08/2017 02:55:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.