Eskom needs to change tack to bring stability and growth

The release of Eskom’s financials on Monday painted a dire picture of the state of affairs at the power utility. The new board, Chairman and CEO who have recently taken over the reins, need to show a radical shift in approach if they are to have any hope of turning the failing entity around. It can never be business as usual at Eskom.

The Minister of Public Enterprises, Pravin Gordhan, and Eskom executives need to stand firm and not waiver with a no-nonsense approach to Eskom. Currently, Eskom is bloated and inefficient. With over 48 000 employees, salary costs are spiralling out of control and becoming unsustainable.

An area which has contributed to the stagnation at Eskom is the lack of accountability for those who have been implicated in corruption. Eskom executives need to follow through with charges and disciplinary action, as well as reclaiming money from entities and individuals that have spirited away billions from Eskom through corruption and State Capture.

The DA has laid a number of charges against Eskom officials and related parties. These include:

  • In November 2016 – charges against former CEO, Brian Molefe, for his alleged part in State Capture;
  • In November 2016 – charges against the Eskom Board and Trillian for their alleged role in corruption;
  • In March 2017 – charges against former Acting CEO, Matshela Koko, for his alleged role in State Capture;
  • In July 2017 – charges against former CFO, Anoj Singh, for his alleged role in State Capture; and
  • In September 2017- charges against Trillian, Mckinsey, Just Coal and SAP for their alleged roles in corrupt activities at Eskom

We encourage Eskom to file supplementary affidavits to support our charges if they are serious about cleaning up the power utility

Further to this, the DA is currently in the process of drafting a Private Members Bill which will see Eskom being broken up into two separate entities: a transmission public entity, which will manage the entire grid and transmission lines, and a generating entity which will be privatised. This will create space for energy companies to compete with Eskom on an equal footing and it will improve the performance and efficiency of the sector.

The DA also calls on Minister Gordhan to consult the Auditor-General and provide a concrete plan with regards to reducing irregular expenditure at the entity. With over R19 billion in irregular expenditure, Eskom is on a collision course with investors and financiers.

Eskom is in this dismal state due to years of corruption, financial mismanagement and compromised Ministerial oversight. The task to turnaround the entity is enormous but urgent if we are to move the economy forward.

With 9.5 million people unemployed, the economy needs a well-functioning and efficient energy sector to stimulate job creation. The DA will continue to explore every avenue to ensure that South Africa has an efficient and transparent Eskom.

DA to add Transnet ‘Traingate’ scandal report to criminal charges against Molefe & Gupta associates

The latest forensic report by law firm Mncedisi Ndlovu & Sedumedi (MNS) attorneys on the R15,4 billion price inflation on Transnet locomotives procurement will form part of the affidavit of the criminal charges that the DA will be laying against former CEO Brian Molefe, former Chief Financial Officer Anoj Singh, board sub-committee Chairperson Iqbal Sharma and Gupta lieutenant Salim Essa.

The MNS report recommends that corruption charges be brought against the four individuals and steps taken by Transnet to recover the money lost from Molefe.

This latest report follows a Werkmans Attorney’s report which found out that Brian Molefe, Gupta associates and current Transnet CEO, Siyabonga Gama, may have breached the Public Finance Management Act (PFMA) for “…serious breaches of statutes, regulations, corporate governance and unlawful conduct in relation to the transaction – involving billions of rand”.

That two reports from different law firms have reached the same conclusion on the magnitude of the criminal enterprise that Molefe and the Gupta associates presided over for the benefit Gupta-linked firms, provides enough evidence for a criminal investigation to be instituted without delay.

Transnet is a vital cog in South Africa’s economic infrastructure and the financial pilferage it endured at the hands of corrupt ANC deployees like Molefe may have cost thousands of jobs that could have been created had the money been put to good use.

It is therefore essential that, while criminal charges are pursued, the current Transnet Board must act on the MNS recommendation to recover money lost by Molefe through his deliberate acts of economic espionage.

Failure to do so will render the entire Board complicit in violating good corporate governance practices which enjoins them to act against any perceived threats to Transnet’s financial health.

President Ramaphosa must understand the collapse in governance has not only taken place in ANC run provinces but had also become pervasive in State Owned Enterprises (SOEs). Taking stern action against Gupta lieutenants is an essential first step in fixing the culture of corruption in SOEs.

DA welcomes restart of Eskom Inquiry on Tuesday, 23 January

The DA welcomes the announcement today that the Parliamentary Inquiry into Eskom is set to resume on Tuesday, 23 January 2018.

Former Eskom CFO, Anoj Singh is set to appear before the Inquiry on Tuesday, whilst Mathsela Koko, the former Acting Eskom CEO, is expected to appear on Wednesday, 24 January 2018.

Eskom is in crisis and is currently facing major institutional disintegration, financial trouble and gross mismanagement and the situation seems to worsen on a daily basis.

It is clear that there is still a lot of work that needs to be done to turn things around, not just at the power utility, but also at Prasa, Transnet and Denel, which have all succumbed to state capture.

The DA looks forward to working with our colleagues across the political spectrum to ensure that we root out the rot at all our state-owned enterprises (SOE) and ensuring good corporate governance is once again restored.

We remain resolute about getting back to the task of exposing the corrupt cabal of Gupta henchmen at all SOE’s, removing them from power and ensuring that they get back to working for the people of this country.

Eskom should submit supplementary affidavits to existing DA charges against execs

The DA notes reports that Eskom is currently considering taking legal action against “at least three senior managers and two senior executives with misconduct for their alleged involvement in the [McKinsey] scandal”.
Although this is a welcome sign of accountability, there is no need for Eskom to lay fresh charges against these individuals, as the DA has already laid criminal charges against a host of Eskom executives as well as those possibly involved in dodgy dealings.
Instead of wasting police resources and opening new cases against these companies and individuals, the DA urges the power utility to submit supplementary affidavits to the following cases:

  • Anoj Singh –  Cape Town Police Station – Charges of possibly breaching the Public Finance Management Act – Case number: CAS 1685/7/2017
  • Matshela Koko – Cape Town Police Station – Treason, corruption and racketeering charges –  Case number: CAS 2067/5/2017
  • McKinsey – Cape Town Police Station – Fraud, racketeering and collusion charges – Case Number: CAS 1156/9/2017
  • Trillian Capital – Rosebank Police Station – Corruption charges – Case Number: CAS 70/11/2016

The DA also urges Eskom to submit supplementary affidavits on the alleged dodgy dealings of other Eskom executives, including Edwin Mabelane, Prish Govender and Charles Kalima.
By laying new charges, Eskom will just prolong and duplicate an investigation by the police.

DA does not buy Minister Brown’s Trillian excuse

The DA notes Public Enterprises Minister, Lynne Brown’s claim that she did “not know” that Eskom was lying about its relationship with the Gupta-linked Trillian.
The Minister’s comments come after Eskom suddenly made a U-turn on Monday after it initially claimed that the R1.6 billion it had paid to Trillian and Mckinsey was above board.
The DA simply does not buy the Minister’s poor excuse. “I didn’t know” is not good enough and as the Minister of Public Enterprises, she should have known.
It is becoming increasingly clear that the Minister is failing at her job as shareholder representative. Under her watch, dodgy dealings at Eskom for the benefit of the Guptas, have become a common practice.
The DA finds the Minister’s sudden revelations rather suspicious considering that she had allegedly misled Parliament when she seemingly failed to reveal if there had been any existing contracts of engagement between Eskom and Trillian, in a written reply to a DA parliamentary question.
Minister Brown needs to stop digging deeper holes for herself and lay bare what she knows or come clean as to who lied to her.
All those involved in Eskom’s latest scandal must be held to account. These include the Minister, under whose watch this happened, and the suspended Eskom CFO, Anoj Singh, who not only facilitated Eskom’s procurement of these contracts but also allegedly orchestrated the power utility’s lies when this scandal came to light.
The DA has already laid charges against Anoj Singh regarding his work as a Gupta henchmen at Eskom, and we have also reported the Minister to the Public Protector.
The DA will ensure that this Trillian saga is duly investigated at the upcoming Eskom Inquiry.

DA lays criminal charges against suspended Eskom CFO, for his alleged role in capture of Eskom

soundbite by the DA Shadow Minister of Public Enterprises, Natasha Mazzone MP.
Today the DA laid criminal charges against the suspended Eskom Chief Financial Officer, Anoj Singh.
Following Singh’s alleged role in a range of corruption scandals and dodgy deals at the power utility, the DA has reason to believe that he has possibly breached the Public Finance Management Act.
The time has come for all of those who have seemingly contributed to the looting of our public funds, face the full might of the law.
The recent suspension of Singh does not absolve him from appearing before Parliament’s inquiry into the rot at Eskom.
The DA trusts that the SAPS will ensure that this case is fully investigated to expose Singh’s apparent role in the rot of corruption that has manifested at Eskom.

DA welcomes suspension of Anoj Singh

The DA welcomes the suspension of Eskom’s Gupta-linked CFO, Anoj Singh.
However, his suspension must not be used as an excuse to not appear before the upcoming Parliamentary Inquiry into Eskom.
The DA is also of the belief that Mr Singh has a criminal case to answer for and we have committed to laying charges for possible breaches of the Public Finance Management Act.
His possible role in a range of corruption scandals and dodgy deals at Eskom, which include but are not necessarily limited to the R495 million Trillian contracts and the grossly reduced arbitration settlement from R2.1 billion to R577 million for Tegeta, must be fully investigated.
It does seem that progress is being made towards cleaning up the rot that has set in at Eskom. Yet this does not mean our work is done.
We still have a long way to go to ensure that the state-owned power utility works for the people of our country and that it is no longer looted for the financial benefit of a few Zupta’s.
The DA will continue to push for this and to ensure that those responsible are made to account before the Parliamentary Inquiry.

DA to lay charges against Eskom CFO, Anoj Singh

The DA will lay criminal charges against Eskom’s Chief Financial Officer, Anoj Singh, as we have reason to believe that Singh may have played a pivotal role in the Guptas’ capture of Eskom.
The DA will lay charges against Singh for possible breaches of Section 50 (1) of the Public Finance Management Act (PMFA), which states that an accounting officer at a public entity must “ensure reasonable protection of the assets and records of the public entity” and “act with fidelity, honesty, integrity and in the best interests of the public entity in managing the financial affairs of the public entity”.
Furthermore, Section 50 (2) of the PMFA clearly states that an accounting officer at a state owned enterprise may not use their “position or privileges […] for personal gain or to improperly benefit another person”.
Under Section 86 (2) an accounting authority is “guilty of an offence […] or to imprisonment […] if that accounting authority willfully or in a grossly negligent way fails to comply with a provision of Section 50, 51” of the PMFA.
Singh has been linked to a range of corruption scandals and dodgy deals at Eskom which must be fully investigated.
These include but may not be limited to:

  • The Trillian contracts of R495 million, as a subcontractor of McKinsey;
  • The arbitration settlement of R577 million, reduced from R2.1 billion, for Tegeta;
  • Giving Tegeta a R1.6 billion guarantee to purchase Optimum even if it wasn’t used; and
  • The upfront coal contract payment to Tegeta.

Based on the absurd explanation Singh provided yesterday, as to why Eskom gave Gupta-linked Tegeta a 72% discount to acquire Optimum, it appears he may be one of a number of seemingly compromised individuals at Eskom who have sought to loot our public coffers.
The DA will also lay charges of false statements, reckless conduct and non-compliance against Singh, under Section 214 (1) of the Companies Act 71 of 2008, which states that a person is guilty of an offence if they “with fraudulent intention, knowingly provided false or misleading information” and if they were party to “an act or omission by a business calculated to defraud [the company] or with another fraudulent purpose”.
Under Section 216 of the Act, if a director of a company is convicted of an offence in terms of Section 214 (1), they are liable “to a fine or to imprisonment” of up to 10 years.
As CFO of Eskom, Singh would have been best placed to provide access to those intent on looting the entity for their own selfish gain. This possibility must be fully investigated and should the allegations prove true, the DA will ensure that Singh has his day in court and that he accounts for his hand in the capture of Eskom.

Anoj Singh should be next

The DA welcomes Eskom’s decision to take disciplinary action against former Acting CEO, Matshela Koko, for the R1 billion Impulse International nepotism scandal.
However, there are still a number of likely compromised individuals at the helm of Eskom who must be dealt with decisively if we have any hope of solving the multiplicity of problems at the entity.
Chief among them is Eskom’s Gupta-linked CFO, Anoj Singh, who should be immediately suspended and investigated for his involvement in the outrageous 72% discount Eskom gifted the Guptas to acquire Optimum.
Singh’s ridiculous explanation as to why Eskom reduced the original R2.1 billion fine, to R577 million, simply won’t fly. Instead of being suspended and investigated, he has been rewarded with a bonus of R1.8 million for the year.
Eskom executives cannot continue to protect the Guptas at the power utility’s expense any longer.
The truth is, Eskom’s announcement of disciplinary action against Koko today, is simply a smokescreen to cover up the glaring financial troubles at the power utility.
The power utility’s finances today showed some concerning figures:

  • R355.3 billion in debt securities and borrowing which is a 10% increase from 2016’s R322.6 billion,
  • Net profits plummeted by 82%, from R5 billion to less than R1 billion.

It is evident that Singh is failing in his role as CFO, and the DA will now explore further avenues to bring Singh to book for his role in the deterioration of Eskom’s finances.
As Eskom slips further into financial chaos, ordinary South Africans will have to bear the brunt.
The DA looks forward to meeting Singh at the upcoming Parliamentary Inquiry into Eskom to ensure that he is held to account.

Minister Brown can and must stop bonuses to ineffective Eskom executives

The Minister of Public Enterprises, Lynne Brown, has the power to stop the handover of millions of public money to Eskom executives who have utterly failed, and in some cases, are the cause of the dire financial situation at the power utility.
The DA publically calls on Minister Brown to reject the request to approve short term bonuses of R5.5 million for three former and current executives, which forms part of an R13 million payment for top executives: R2.1 million for former Eskom CEO, Brian Molefe, R1.5 million for suspended acting CEO, Matshela Koko, and R1.9 million for CFO, Anoj Singh.
The fact is that Eskom may not be able to pay salaries to its 49 000 employees come November. According to reports, its income decreased from R5.3 billion last year to R900 million in June, while the interest it accrued on its debt jumped to R38 billion from R31 billion.
Clearly, Eskom finances are in a shambles. The true state of Eskom’s financial situation is markedly different from the picture of excellence painted by Mr Ben Ngubane when he and the board appeared before the portfolio committee on public enterprises less than two months ago.
It is utterly unacceptable for executive bonuses to be paid while ordinary employees may not be paid.
Only good performance should be rewarded, yet Eskom is clearly intent on doing the opposite.
The DA will not allow public money to be squandered on ineffective executives while the livelihoods of ordinary employees are put at risk.