The South African Post Office (SAPO) has terminated the contract of its suspended CEO Christopher Hlekane, it announced on Tuesday.

SAPO said Hlekane’s termination would be effective from September 1.

“This effectively puts to an end the internal process which resulted from the institution and defending of a disciplinary hearing against him by the SA Post Office,” SAPO said.

“All the terms of the agreement were designed in such a manner that the finances of the SA Post Office were taken into consideration. The CEO will only be paid what he is entitled to in law and policy, e.g. outstanding leave pay-out and pension pay-out.”

The agreement paves the way for the appointment of a new CEO for the troubled post office which is battling to pay its creditors following significant revenue losses.

Earlier on Tuesday, SAPO board chairperson Simosezwe Lushaba and his team briefed Parliament’s portfolio committee on telecommunications and postal services on the post office turnaround plan, which included appointing a new CEO and CFO.

While Hlekane and SAPO had come to terms on his exit, negotiations with suspended chief financial officer Khumo Mzozoyana were still continuing.

Committee chairperson MMamoloko Kubayi wanted an assurance from Lushaba that the negotiated settlement did not mean a huge payout for Hlekane.

“It’s not a handshake? We are allergic to settlements,” she said.

Lushaba said the post office could not afford a payout, and assured MPs there would be no “golden handshakes”.

“We have agreed there are not going to be any handshakes – golden, or silver or platinum to be payable in the separation,” said Lushaba.

Hlekane was suspended last year amid allegations of corruption and a crippling post office strike which added to the huge losses the post office suffered.

Lushaba and his new board – appointed less than a month ago – have three years to implement a turnaround at the cash-strapped post office.

SAPO owed its creditors close to half a billion rand at the end of July this year.

Acting post office CEO Mlu Mathonsi told MPs this figure was constantly changing as SAPO paid its creditors from savings it achieved through the turnaround plan.