Armscor CEO suspended
November 19, 2009
Cape Town - Armscor has suspended its chief executive officer, Sipho Thomo, the chairperson of the board of the arms procurement agency announced on Thursday.
Popo Molefe said Thomo was suspended with full pay after he and the board failed to reach an amicable agreement to end his 10-year tenure at the head of Armscor.
"As there were serious allegations against the CEO, and no agreement could be reached to settle amicably, the board, after deliberations decided to suspend the CEO with full pay and his current benefits," Molefe said.
"The suspension will continue pending an investigation of disciplinary charges, and the convening of a disciplinary hearing if there is evidence which justifies that."
Molefe said the board hoped to deal with matter as expeditiously as possible to avoid wasting public funds.
"In this regard the board hopes for the co-operation of the CEO."
Molefe revealed last week that the board had asked Thomo to step down, because the board believed that "he's taking all of us down".
But Thomo refused, telling reporters: "I'm not planning to resign. I have no reason to resign."
Armscor said Sipho Mkwanazi, its general manager for acquisition would act as CEO until the dispute with Thomo was resolved.
The Democratic Alliance welcomed Armscor's decision.
"Sipho Thomo's divisive management and leadership style was a disaster and caused a virtual civil war between employees at Armscor," DA spokesperson David Maynier said.
Opposition MPs have suggested that despite long-standing tension with Thomo it was his awkward disclosure that the cost of South Africa's contract to buy eight Airbus A400M heavy-lift planes had sky-rocketed to an "estimated" R47-billion that finally prompted the board to act.
Cabinet scrapped the deal this month.
Thomo survived years of controversy before Molege revealed that he had been asked to stand down.
In 2006, Armscor's general manager of corporate affairs Nthati Borotho accused him of publicly making unsavoury comments and unfairly assessing her work performance.
Thomo was cleared but the board ordered that he had to undergo training to help him improve his autocratic management style from consultants that worked in "coaching CEOs".
Board member Sifiso Msibi last week told Parliament that the consultants "attempted working with the CEO but nothing came out of it as he was reluctant to engage".
Concerns were raised about the cost of the lengthy dispute, which included 14 months of paid leave for Borothi to the tune of R1.2-million and more than half a million rand for consultants and attorneys
It recently emerged that Thomo's pay package included a restraint of trade agreement worth one year's salary, or R1.45-million, of which 60 percent was paid earlier this year.
The rest is to be paid upon termination of his contract.
Thomo's suspension follows that of Siyabonga Gama as head of Transnet freight rail in September and the messy departure of Eskom CEO Jacob Maroga last week after he fell out with board chairman Bobby Godsell.
Top-level strife at state-owned enterprises has led to accusations of racism from the Black Management Forum who charged that they had become "slaughterhouses" for black CEOs.
Public Enterprises Minister Barbara Hogan last week lashed out at attempts to politicise the problem and assured the boards of parastatals that they had government's full support to govern. - Sapa
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