André de Ruyter. Picture: SUPPLIED
André de Ruyter. Picture: SUPPLIED

Incoming Eskom CEO André de Ruyter has denied engaging in “questionable stock sales” months before resigning from Sasol to join Nampak as its CEO in 2013.

According to a Bloomberg News report, a forensic audit commissioned by Sasol found that De Ruyter, who was working as a senior executive for the petrochemicals company at the time, had known about cost overruns at the company’s Fischer Tropsch Wax Expansion project and sold off company stock before this information was disclosed to other executives.

Then-CFO Christine Ramon also sold a large number of shares on the same day, and was similarly implicated in an act that could be construed as insider trading, a criminal offence.

Stock exchange filings show De Ruyter sold three tranches of the company’s shares for a total of R8.9m on May 14 2013, while Ramon sold a single tranche for R33.7m. In both cases, the sales represented the majority of the Sasol stock both held.

The audit, which analysed e-mails, regulatory filings and other documents supplied by the company, covered the period from February 1 to August 31 2013 but was concluded after the two had left Sasol. Ramon resigned on September 9 2013 and De Ruyter on November 30 the same year.

The Bloomberg report comes just as De Ruyter prepares to take up the role as CEO of Eskom. His tenure will begin with a series of visits to Eskom power stations between December 25 and January 1 before taking up his formal duties on January 6. The Eskom board and management has been trying to root out corruption and restore good governance at the crisis-hit utility. De Ruyter’s appointment has already been criticised as anti-transformation by political opposition parties and some unions.

Speaking to Business Day on Friday, De Ruyter said he was one of three Sasol executives who sold shares on that particular day following the publication of the company’s interim results and its emergence from a closed period. “I obtained all the necessary internal approvals before undertaking the sale, which included receiving approval from Sasol’s then CEO David Constable.” 

‘Nonsensical’ allegations

The allegation that he had concealed developments regarding such a large project by somehow obtaining critical information and not passing it on to the board is “nonsensical”, De Ruyter contended. “Many other executives at Sasol had access to the same information, and certainly those with direct responsibility for delivering the project had even more information than I did.”

De Ruyter said he was also not aware of the investigation and had never been afforded a chance to respond. “I have not yet read or had access to the report. The first time I heard about it was when Bloomberg contacted me and quoted from some of the findings.”

He said he resigned from Sasol after losing out on the CEO position to Constable. “When you get pipped to the post you do look at opportunities to run things on your own. So I was approached by a headhunter for the Nampak job. The timing worked for me, and they made me an offer. I was not asked to leave or anything of that sort.”

Ramon told Bloomberg she strongly denied having acted wrongfully or unlawfully in any manner as alleged or otherwise.

Sasol spokesperson Alex Anderson said that in the ordinary course of business Sasol undertakes inquiries to enhance its governance and control environment and, from time to time, may elect to review select executive share transactions with the assistance of the company’s independent legal advisors and forensic consultants.

“In 2013, a review into the share trading of certain executives was undertaken and … not in the purview of affected executives,” Anderson said. “Neither of these resignations was a consequence of any conclusion relating to this investigation, nor were the executives informed of this confidential inquiry.”

Anderson said the investigation and legal advice thereon were concluded after the communication of such resignations and no conduct was identified that created any regulatory reporting obligation in respect of any affected executive of the company. “Had there been a matter that required regulatory reporting concerning their share trades, they would have been invited to make their representations thereon.”