Six senior staff suspended as Sentech cleans house

Sentech’s new management, which is implementing a turnaround strategy for the state-owned entity, had suspended six senior employees for alleged corruption, chief executive Setumo Mohapi said yesterday. The staff, all from Sentech’s procurement department, were suspended two weeks ago but Mohapi yesterday refused to provide more details of the transgressions as a disciplinary process was under way. He said there was a violation of rules and the law. “It’s not a big thing… No one will hold us to ransom. My job is to deliver on the strategy plan and ensure there is a clean operation.” Logan Naidoo, Sentech’s chairman, said an internal audit report revealed “fruitless and wasteful expenditure” in procurement but he too did not elaborate. Sentech wanted to establish “a culture of integrity”. Sentech’s history is mired with corruption cases. Last year it lost its chief executive, chief financial officer and chief operating officer, all allegedly implicated in dubious dealings. Earlier last year its board was fired after a task team appointed by then communications minister Siphiwe Nyanda uncovered financial irregularities.

With Sentech facing leadership and strategy crises, a report to Parliament indicated that it was at risk of running out of cash by November last year. It was forced to close down unprofitable businesses and demand money from bad debtors. Naidoo said Sentech was solvent, with significant assets. “It is liquid and it has focus and strong cash flows.” The firm’s revenue was just less than R1 billion a year. Total assets were R1.8bn for the year to date and liabilities R1.1bn for the year to date. Naidoo said the firm was in the process of re-evaluating the assets to be able to re-evaluate its worth. Mohapi said: “It’s… cleaning up the finance systems.” Sentech has restructured its management and aims at filling critical posts, such as new executive positions for human resources, technology, business services and corporate services, by the end of next month.

Sentech, which yesterday presented its medium-term framework plan for 2011 to 2014, will drive two flagship projects over the next three years. The first project involves covering the country with transmission infrastructure in anticipation of the digital terrestrial television migration, the switchover from an analogue broadcasting signal, by 2015. Sentech’s target is to cover 92 percent of the population by 2013. It is building a national rural wireless broadband network to provide internet access to schools, clinics, police stations and rural municipalities. The project will cost about R1.2bn over the next three years. Sentech will have a shortfall of R250 million to build the infrastructure. It will use a R500m grant it received from the government to begin building the network using wireless technology. Naidoo said Sentech was confident it would receive the R250m necessary for the final phase of roll-out of the network from the National Treasury.