The acting CEO of the Strategic Fuel Fund (SFF) Sibusiso Gamede and the chairman of the Central Energy Fund (CEF) Riaz Jawoodien on Friday resigned with immediate effect following the debacle over the unauthorised bid for Chevron SA, which is up for sale.

The bid incurred the displeasure of Energy Minister Tina Joemat-Pettersson, who is the shareholder representative of all companies in the Central Energy Fund group, as governance procedures were flouted and permission for the transaction was not obtained.

In a statement issued on Friday, the board of the CEF said it had established that governance procedures were not observed and accepted the immediate resignation of both Jawoodien and Mkhwanazi. The SFF, which made the Chevron bid, is wholly owned by the Central Energy Fund.

State-owned companies may not buy or sell assets without prior approval of the shareholder minister and of the minister of finance. This permission was neither “sought nor obtained”, director-general of the department of energy Thabane Zulu said on Thursday.

Chevron SA, which is 75% owned by US major oil company Chevron, owns a refinery in Cape Town, a lubricants plant in Durban and 845 Caltex fuel stations, valued in the region of $1bn. The refinery requires a large investment in order to meet clean fuel requirements. In the view of this and low global oil prices, Chevron SA announced in January that it wanted to sell.

In its statement the CEF board said it “regrets the impact of this occurrence to Chevron SA, who are valued industry partner. The group further regrets the perceived misalignment with the Minister of Energy and the Department of Energy”.

The Chevron bid was the second controversial transaction by the fund in the past six months. In December it sold SA’s entire strategic stockpile of 10-million barrels at prices far below market value. While it had the permission of Joemat-Pettersson for the sale, it did not have that of the Finance Minister Pravin Gordhan, whose permission must be obtained under the Public Finance Management Act.

•Source: BusinessDAY South Africa.