Sasol ‘urged to ditch Cornell’

● Sasol has been asked by some of SA’s biggest fund managers to consider executive changes including ousting Stephen Cornell, one of its two CEOs, over cost overruns at its flagship Lake Charles project, according to people familiar with the matter.

The money managers began meeting with Sasol’s board and leadership after it raised the estimated cost of the plant in Louisiana, US, by $1bn (R15bn) in May, having increased it only three months earlier.

Investors including Allan Gray and Coronation Fund Managers want management to take responsibility for the escalation in costs at the $13bn chemicals project, said the sources, who asked not to be identified.

Allan Gray and Coronation confirmed they met with Sasol but declined to comment on the content of the discussions.

Some investors also questioned the need for the company, which is SA’s biggest by revenue and has a market value of R176bn, to have co-CEOs.

They suggested that Cornell leave and Bongani Nqwababa be retained.

Cornell has been more involved in the Lake Charles project and is paid more than Nqwababa, they said.

In the year ended June 2018, Cornell was paid R46.3m in salary, benefits and incentives while Nqwababa made R25.9m, according to the company’s annual report.

“It would not be appropriate for Sasol to comment on behalf of its shareholders,” the company said in response to questions.

Earlier this month, Sasol confirmed it met with shareholders to “hear their views, concerns and expectations”.

Concern has grown over the costs of Lake Charles, with Sasol on August 16 delaying its annual results, saying that it had not yet completed a review of the problems at the project.

Cornell has held his position at Sasol since mid-2016, after serving as executive vice-president of international operations for the company for the previous two years. Before that he worked for BP. — Bloomberg