Armscor's board is sitting on an explosive report that claims the state armament company's CEO victimised a fellow top manager by publicly making unsavoury comments and unfairly assessing her work performance.

The report was compiled after a confidential inquiry headed by a member of Armscor's board, Cyril Gamede.

It recommends suspending CEO Sipho Thomo while a formal disciplinary inquiry is held and claims senior staffers are too afraid of their boss to speak the truth.

Thomo has headed Armscor for nearly a decade and is tipped to become the new boss of ailing state arms company, Denel.

Armscor chairperson Popo Molefe refused to discuss the matter. However, other well-placed sources confirmed the authenticity of the report. Weekend Argus has a copy of the report.

The Armscor board of directors initiated the inquiry after a grievance was lodged against Thomo by Armscor's general manager of corporate affairs, Ntahli Borotho.

She has been on special leave for more than a year.

Sources claim the hard-hitting report on the dispute was handed to Molefe in March.

It slams Thomo for making comments that the report says were "insensitive, derogatory and, in terms of Armscor policies, could be regarded as sexual harassment".

The report further alleges that Thomo favoured certain employees, that colleagues were afraid of him and that his management style had led to general managers "willing to distort the truth on his behalf", leaving management and the board of directors powerless.

According to the report, the saga began when Borotho complained she was being victimised because she did not employ an intern Thomo allegedly favoured and because she had accused him of favouritism in terms of another employee.

She later alleged she was victimised in terms of performance assessment, denied a day's annual leave and had been humiliated by comments Thomo made in public.

The report outlines an incident at a management board happy hour when the CEO allegedly made an off-colour joke about being the father of Borotho's baby and another when he allegedly said she was on good terms with a senior defence official because of what that official wanted from her.

It says the CEO apparently blamed her unfairly for the failure of a presentation to parliament. After she complained about his conduct, he allegedly refused her a day's annual leave.

The report recommends that Borotho return to work and her performance assessments be redone.

It says Thomo should be suspended for the duration of disciplinary proceedings that it recommends should be instituted against him.

It says he should be charged with misconduct in the form of sexual harassment, abuse of authority and dereliction of his duties in committing several acts of discrimination and unfair labour practice *1.

Thomo could not be contacted for comment.

Armscor's senior manager of corporate communications, Minah Sindane-Bloem, said she could not comment because it was for the board of directors to respond.

* This article was originally published on page 3 of The Cape Argus on May 18, 2008

With acknowledgements to Chiara Carter and Sunday Independent.