Today the Democratic Alliance filed criminal charges against the newly reinstated Eskom CEO, Matshela Koko.
Follow the sham of a disciplinary hearing, clearing Koko of all charges relating to misconduct, we have laid charges in terms of the Public Finance Management Finance Act (PFMA) as we believe Koko may have used his position at Eskom to improperly benefit his step-daughter’s company and her, which, if true, is a violation of the PFMA.
Earlier this year it came to light that Koko allegedly awarded lucrative Eskom contracts, worth R1 billion, to Impulse International, a company linked to his stepdaughter. He was also apparently involved in approving an R650 million loan from Eskom to Gupta-linked Tegeta, in order to ensure that the Guptas purchased Optimum.
Since Eskom and the Minister of Public Enterprises, Lynne Brown, are incapable of holding the seemingly captured and heavily implicated Koko to account, it is up to the Hawks to investigate the matter and to take action should the investigation find evidence of wrongdoing.
The DA will today write to the Acting Public Enterprises Committee Chairperson, Ms Zukiswa Ranthoto, to request that she demands Eskom hands over the details of the Tegeta-Optimum agreement to the Public Enterprises Committee.
Reports today indicate that Eskom slashed a non-performance penalty of R2.1 billion levied against Glencore for their Optimum mine, to R255.4 million, a mere 10% of the original settlement demanded from the previous owners, Glencore.
The details of this outrageous agreement between Tegeta and Optimum must be made public as almost R1.6 billion in public money has apparently been gifted to the Guptas on a silver platter.
This is an almost 90% discount for the Guptas to acquire Optimum. Eskom most likely gave Tegeta this monumental discount because it is a Gupta-owned company.
Even worse, there are allegations that former acting Eskom CEO, Matshela Koko, approved a smaller but substantial, R659 million prepayment for coal from Optimum.
Essentially, it appears the Guptas were given money to take ownership of the mine.
Eskom, under the leadership of former CEO, Brian Molefe, therefore basically forced Glencore to sell off the mine when he refused to negotiate the R2.1 billion non-performance penalty.
The details of this outrageous agreement must now be tabled before the Public Enterprises Committee for scrutiny and effective oversight.
Eskom can no longer hide behind the confidentiality clause. The public deserves to know the content of this agreement. In this instance, it is clear that the public interest outweighs any corporate confidentiality prescriptions. NA Rule 167 gives the power to the Committee to request any documents – it is under this rule that Eskom must account to Parliament.
The captured Gupta cronies at our country’s state-owned enterprises are systematically looting our key institutions for no other reason than their own financial benefit. Ensuring the details of potentially dodgy dealings are made public is the only way to make inroads into stopping this flagrant abuse.
The Democratic Alliance has noted the late-night resignation of Eskom Board Chair, Ben Ngubane, hot on the heels of damning revelations of the capture of Eskom leadership by the Guptas, and the breakdown of corporate governance at Eskom.
Mr Ngubane, who presided over the retrenchment/retirement/rehire of Brian Molefe as Eskom CEO has much to answer for, not least of which includes Molefe’s R30 million ‘golden handshake’ deal and an avalanche of accusations that the Guptas have milked Eskom over many years.
Ngubane’s resignation will not exonerate him from liability for the breakdown of governance at the Power Utility, and the DA will use the Parliamentary Inquiry into Eskom, set to commence on 21 June, to hold Ngubane to account.
Allegations by former Mineral Resources Minister, Ngoako Ramatlhodi, that Brian Molefe and Ben Ngubane tried to strong-arm him to withdraw Glencore’s Optimum mining licences in order to guarantee that the Guptas takeover Glencore’s coal mines is yet to be probed, and may still find Nguabne guilty.
Additionally, the Matshela Koko R1 billion nepotism scandal, which occurred on Ngubane’s watch, is yet to be fully probed too.
Ngubane has also recently been implicated in falsifying documents in a liquidation case.
We find the clandestine hour of Ngubane’s resignation announcement to be highly suspicious.
The DA has written to Public Enterprises Committee Acting Chair Zukiswa Rantho, demanding answers for the delay in constituting what we believe to be a most urgent full scale Parliamentary Inquiry into the rot at Eskom.
The announcement today that Brian Molefe’s return to Eskom must be rescinded shows that governance at Eskom has crumbled.
Only a full-scale Parliamentary inquiry has the capacity to get to the bottom of the rot at Eskom. It must be constituted and scheduled immediately. It is abundantly clear that the Eskom Board has acted like a law unto itself and parliament must rein it in.
The DA believes that ANC efforts to establish alternative investigations into Eskom, and the Brian Molefe fiasco, are nothing but distractions. Only Parliament has the Constitutional power to truly probe the full scale of the crisis and capture of Eskom.
The Special Investigative Unit (SIU), which Minister Brown wants to investigate only certain procurement issues at Eskom, reports to President Zuma and will be empowered by a Presidential proclamation – this will essentially allow the Gupta-captured President to lead the investigation into the Gupta-captured Eskom procurement deals with Gupta companies. It is clear to the DA that this will be nothing but a sham.
The SIU investigation will be nothing but the ANC Zuma-Gupta cohort investigating the Gupta-capture of Eskom, behind closed doors. This can never be considered impartial or transparent.
In the Select Committee on Public Enterprises at Parliament today, it was confirmed that a forensic company has now been instructed to investigate the destruction of key documents linked to Molefe’s contracts, after the DA raised the fact that documents were possibly being destroyed. We welcome this investigation, but it shows that Eskom insiders are intent on the Brian Molefe fiasco not being properly investigated.
The DA will continue to push for the Parliamentary inquiry as this is the only way we, and the South African public, can trust that the the full extent of the rot at Eskom will be brought to light and that those responsible will be forced to admit and then account.
On Tuesday, 6 June 2017, the DA will be in the North Gauteng High court to present our arguments as to why the court should interdict the ‘redeployment’ of Brian Molefe as CEO of Eskom by the ANC government.
This is Part “A” of our court case, the part to which Minister Lynne Brown has withdrawn her opposition.
The DA welcomes that two days have been set aside for the matter to be heard.
Over the last week and a half, the South African public have watched as more and more damning revelations against Eskom and Molefe have emerged, matched by equally bizarre explanations and non-answers.
It is abundantly clear that Eskom is in a dire state of governance meltdown and the DA is of the opinion that the reappointment of Molefe will only compound the manifold problems at the entity and should therefore be set aside. Frankly, Mr Brian Molefe could not have been reappointed to Eskom for any rational reason.
We look forward to arguing the case for interdicting Mr Molefe from taking up the office of CEO, and when the full review application is later heard to ultimately ensure that capture of our state owned power entity will be cut.
The DA has today publicly called on the Minister of Public Enterprises, Lynne Brown, to immediately suspend the board of Eskom following their shocking and flagrantly arrogant statements at the extraordinary sitting of the Portfolio Committee of Public Enterprises today. They simply refuse to take any responsibility for the governance failures plaguing Eskom.
Moreover, while the Minister stated that she wants to go ahead with a limited investigation into procurement at Eskom only, the DA cannot accept that with the overwhelming evidence of the complete breakdown of governance and extensive political meddling at Eskom, Brown’s investigation will scratch the surface of the problems at the entity. Procurement is but one factor of the disastrous state Eskom finds itself in.
Therefore, we reiterate our call for a full-scale Parliamentary Inquiry and we are pleased that the Acting Chairperson of the Portfolio Committee, Daphne Rantho, agreed with the DA’s call.
Today, the Board stated that it stands by the affidavit submitted by Dr Ben Ngubane which claims that Molefe never resigned from his position at Eskom. This, despite Molefe himself in his resignation statement saying that “I have, in the interests of good corporate governance, decided to leave my employ at Eskom from 1 January 2017”.
This was echoed by Minister Brown in an official press statement where she unequivocally confirmed that Molefe had “resigned.” We cannot allow South Africa to be misled any longer.
The Board also today claimed to be in the best financial position they have been in for ages and generally gave themselves a big pat on the back for keeping the country’s lights on. This statement is simply laughable.
They then also claimed that no wrong-doings have occurred in the organisation and claimed malicious intent by the public was fuelling the bad media around the entity.
The Board also failed to explain why they relied on the 2014 Memorandum of Incorporation when dealing with Molefe, rather than the 2016 version which the Board must have known applied.
The Eskom board is hopelessly out of touch with reality, and cannot be trusted to run the company responsible for providing our people and economy with electricity. The Board must be suspended.
In the last week or so we have seen what can only be described as one of the most bizarre series of events surrounding why the former Eskom CEO, Brian Molefe, was reinstated. In that time, Molefe has gone from resigning to taking early retirement, to being put on unpaid leave.
The performance by the Board’s representatives did absolutely nothing to instil confidence that they are willing or able to address the very real and serious issues at Eskom. They must go immediately and Parliament must use it powers to fully interrogate and recommend solutions to this mess.
Minister Brown must act now, and she must act decisively. Nothing short of a suspension of the full board, and a full-scale Parliamentary Inquiry will rescue Eskom.
Minister Brown must act, or continue to be part of the problem.
Minister Lynne Brown’s assertion at a press conference earlier today that the reinstatement of Brian Molefe as Eskom CEO is the “only option” is disingenuous and simply not true.
In view of the spurious reasons given and the complete irrationality of the decision, we will once again be approaching the courts, this time to set aside Brian Molefe’s ‘redeployment’ by the ANC government to Eskom.
We believe that Brian Molefe was never entitled to the R30 million in the first place for two reasons, one he did not qualify for early retirement as he was under the age of 55 and two, he only worked at Eskom for 21 months accruing an estimated maximum retirement benefit of only R2,5 million.
According to section 24 of the Rules of the Eskom Pension and Provident Fund (EPPF), an employee is only eligible for pension benefits in terms of early retirement once they have reached the age of 55 years. Brian Molefe is currently 50, turning 51 in November of this year. He therefore never qualified for pension benefits under the early retirement provisions of the rules of the fund.
Moreover, our rough calculations having looked at the EPPF Rules, are that, on the basis of a R6,9 million annual salary, Molefe would only have accrued a maximum retirement benefit of R2,5 million on resignation from Eskom.
Brown therefore today clearly used the R30 million figure as a smoke screen to justify the unjustifiable return of Molefe to the CEO position.
It is highly suspicious that having failed to become the Minister of Finance, which seemed Zuma’s clear intention in deploying Molefe to Parliament, Minister Brown has now paved a smooth return for him to Eskom.
Indeed, Molefe was clearly of no use to Zuma and the Gupta family in the back benches of Parliament.
The return of Brian Molefe to Eskom is a monumental disaster for the power utility, which is currently in a dire state of affairs and is surrounded by a swirling cloud of Gupta-linked corruption allegations as a result of Molefe’s tenure.
As such, the DA will write to the Chair of Chairs, Cederic Frolick, to ask that the Public Enterprises committee launch a full-scale parliamentary inquiry into Eskom.
The return of Molefe to Eskom will see the Gupta hand return to the power utility, and most likely to the forthcoming nuclear procurement deal. This is something which South Africa cannot accept.
It was clear in the Public Protector’s damning State of Capture Report that Molefe was seriously compromised in his position at Eskom. He, himself, on leaving Eskom cited the interests of corporate good governance as requiring him to leave.
The State of Capture Report details the close relationship between Molefe and the Guptas and how key decisions were taken by Molefe, as the head of Eskom, for the ultimate benefit of the Gupta’s and at the expense of the people of South Africa. Specifically, Molefe called Ajay Gupta a total of 44 times and Ajay Gupta called Molefe a total of 14 times in 8 months. Molefe can further be placed in the Saxonwold area on 19 occasions between August 2015 and November 2015.
Importantly, the criminal charges that I laid against Molefe still stand and I trust are being actively investigated by the South African Police Service.
More than this, Eskom faces enormous challenges in its entirety which now need to be investigated through a Parliamentary enquiry. Most notably:
- The Progressive Professionals Forum (Mzwanele ‘Jimmy’ Manyi CM (SA)) received a staggering R440 000 in “sponsorships” from Eskom under Molefe’s watch;
- R1 billion worth of contracts are being investigated which were allegedly awarded by current Eskom Acting CEO Matshela Koko to Impulse International, a company of which his step-daughter is a Director;
- Eskom has continued to resist the signing of contracts with IPPs even though government has instructed it to do so;
- Eskom bosses received R18.3 million in short and long-term performance bonuses in 2016;
- The entire Tegeta scandal.
The ANC have themselves come out and said that Molefe is unfit to return to Eskom as his name has not been cleared – ironic though this is given that he was just yesterday on their own Parliamentary back benches.
South Africa deserves to know the truth behind the many scandals currently engulfing Eskom. It is imperative that Parliament conducts an inquiry as a matter of urgency to ensure that those who are responsible for abuses are held to account – not least, Brian Molefe.
Our lawyers have also been instructed to investigate every angle possible to review this ridiculous and irrational decision.
Our public power utility deserves better than Saxonwold-captured individuals at its helm.
The DA will be writing to the Public Protector, Advocate Busisiwe Mkhwebane, requesting that she launches an investigation into Eskom CEO Matshela Koko for allegedly awarding tenders worth R1 billion to Impulse International, a company of which his step-daughter is a Director.
Impulse International was awarded 8 contracts by Eskom’s Generation unit during Koko’s tenure as the unit’s Group Executive.
Koko’s reported actions could show that he is compromised and unfit to be the head of Eskom. By claiming that he was not aware that his daughter was involved with Impulse International, Koko inadvertently admits that he failed in his role as the Chief Accounting officer to conduct due diligence on the company profile of a potential Eskom service provider.
This potentially means that Eskom violated State Procurement guidelines set out by Treasury to guide the acquisition of services by State Owned Enterprises (SOEs) under Koko’s stewardship.
The DA believes that this latest expose could be one of the reasons why Eskom board has been reluctant to release the Denton report.
The DA will ensure that the rot at Eskom is laid bare and all those implicated held accountable. It can never be acceptable that, while Eskom is struggling to raise capital for some of its power generation projects needed to grow our economy, its managers could be busy siphoning cash to benefit family members.