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.

Koko’s resignation does not absolve him from wrongdoing

The DA welcomes the news today that former Eskom CEO, Matshela Koko, has finally submitted his long overdue resignation letter to Eskom this morning.
This comes after a series of embarrassing and corrupt events at the entity caused by actions seemingly taken by Koko.  These include:

  • The Tegeta-Optimum prepayment scandal, which he denied in Parliament;
  • The McKinsey scandal;
  • Allegedly awarding contracts worth more than R1 billion to his stepdaughter;
  • Leaking confidential Eskom information to a Gupta associate; and
  • The complete sham of his first disciplinary hearing.

Koko has been one of the key figures implicated in the capture of Eskom and he must be held fully accountable for any wrongdoing.
This resignation does not absolve him from facing criminal charges and allegations brought against him by the DA.
Eskom Spokesperson Khulu Phasiwe is quite right when he says “Eskom still prefers that the disciplinary hearing should go ahead today as planned because believes that it has a strong case against Mr Koko”.
It is evident that there is a definite and welcomed change in Eskom’s managerial style.
The DA hopes that the new Eskom management will follow through with their accountable and transparent administration and resist those who attempted to sell the entity to the highest bidder to get away unscathed.

Koko golden handshake would prove Eskom rewards bad behaviour

The reports today that Eskom is currently in secret talks with its former Acting CEO, Matshela Koko, to negotiate a suitable financial package upon his exit, is nothing less than an attempt to reward bad behaviour.

The truth is that Koko has been heavily implicated in the capture of Eskom and is yet to be held fully accountable for this.

Koko’s disciplinary hearing, clearing him of all charges relating to misconduct, was nothing less than a sham. Eskom is in financial disarray and cannot afford to award individuals allegedly involved in corruption and State Capture with a “golden handshake”.

Eskom continues to be marred by controversy and lurches from one crisis to the next. Just this week, the JSE threatened to suspend the utility’s bonds because it had failed to publish its six-month interim results by the December 2017 deadline. This is clearly a state entity that is characterised by a leadership crisis.

To now award this performance or allegations of looting with a golden handshake is quite frankly an insult to the people of South Africa.

Koko has faced a host of damning allegations of financial mismanagement and corruption, including:

  • Allegedly awarding lucrative Eskom contracts worth R1 billion to Impulse International, a company connected to his stepdaughter;
  • His alleged role in orchestrating a R1.6 billion payment to McKinsey and Gupta-associated, Trillian; and
  • He apparently approved a R650 million loan from Eskom to Tegeta, in order to ensure that the Guptas purchased Optimum.

Eskom must not, under any circumstances, pay Koko to go away, he is not entitled to any benefits. It is inconceivable that the power utility would even consider it appropriate to pay Koko a cent of public money.

The DA will not stand for those implicated to be corrupt and compromised to be paid off with money that can provide education to the poor and relief to the vulnerable. We will await Koko’s appearance before the committee on Wednesday, 23 January, where he can definitely expect a grilling.

The Hawks must do what Lynne Brown has failed to do and hold Koko accountable

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.

Matshela Koko disciplinary hearing a farce, DA to lay charges

On Monday, 18 December 2017, the DA will lay charges against the newly reinstated Eskom CEO Matshela Koko. This follows the sham of a disciplinary hearing, clearing Koko of all charges relating to misconduct.
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 a 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.
It is quite clear that this disciplinary hearing was never meant to investigate these serious allegations brought against Koko, but was rather a move to have him reinstated.
The hearing has been a complete and absolute farce from beginning to end. Koko was allegedly consulted on the appointment of the chairperson for his own disciplinary hearing.
There were also reports of key witnesses having failed to appear because of intimidation and manipulation, that there had been massive delays, and the initial evidence leader Sebetja Matsaung was replaced as he appeared ill-prepared and ineffectual.
The DA will continue to fight against the capture of Eskom. The executives and management at Eskom are not serious about rooting out corruption. If they were, Koko would not have been allowed back at the power utility.

Public Protector agrees to meet DA on a number of pressing issues

The Democratic Alliance (DA) is pleased that the Public Protector, Advocate Busisiwe Mkhwebane, has acceded to a request for a formal meeting to discuss a number of pressing matters linked to her office, and the performance of her constitutional mandate to investigate misconduct by government departments and entities and to protect the public’s interest. The meeting has been set down for Monday, 13 November 2017.
DA Leader, Mmusi Maimane, will be raising the followings matters, among others:

  • Why she has not yet released the report into the Vrede Dairy Farm, which has been sitting on her desk for almost six months.
  • Whether she has ever met with any members of the Gupta family, in any capacity whatsoever, and if so, what circumstances necessitated such a meeting;
  • The latest developments with regards to the new “preliminary investigation” into State Capture, which was announced on 15 June 2017. The investigation aims to determine the merits of several allegations of corruption and unlawful enrichment emanating from the infamous “Gupta Leaks”;
  • The progress on a number of ongoing investigations following complaints by the DA over the past 12 months. These include the following:

o   Investigation into Cooperative Governance and Traditional Affairs Minister, Des Van Rooyen, for allegedly misleading Parliament and the public regarding his visit to the Gupta’s family home in Saxonwold;
o   Investigation into former acting Eskom CEO, Mr Matshela Koko, for allegedly awarding a R1 billion contract to his step-daughter while at Eskom;
o   Investigation into the R30 million pension payout to former Eskom CEO Brain Molefe, allegedly authorised by Public Enterprises Minister, Lynne Brown;
o   Investigation into Public Enterprises Minister, Lynne Brown, for allegedly misleading Parliament when she failed to disclose if there had been any contracts of engagement between Eskom and Gupta-linked company Trillian Capital Partners;
o   Investigation into former Home Affairs Minister, Malusi Gigaba and the naturalisation of, and issuing of visas to, members of the Gupta family;
o   Investigation into Police Minister, Fikile Mbalula, and former Acting National Police Commissioner Kgomotso Phahlane for the misuse of state resources in providing VIP protection to Nkosazana Dlamini Zuma; and
o   Investigation into the alleged breach of the Ethics Code and the Power, Privileges and Immunities Act by Mineral Resources Minister, Mosebenzi Zwane, for willfully misleading Parliament by failing to disclose his personal interests pertaining to the Guptas;
o   Clarity regarding the allegation that she concealed submissions received from Black First Land First about her investigation into the apartheid-era bailout of Bankorp by the South African Reserve Bank (SARB); and
o   What her plan of action is regarding those who are actually pulling the strings when it comes to State Capture – including President Zuma, several of his cabinet ministers, and the Gupta family. To date, the real architects and technicians of State Capture have escaped unscathed, while board members, senior executives, and government officials have been used as scapegoats.
We look forward to engaging the Public Protector on the above matters and trust that she will make available all necessary information.
The role of the Public Protector is integral to the proper functioning of our democracy, and now more than ever, we desperately need a Public Protector who is wholly committed to fighting for the people of South Africa – by tackling State Capture and corruption in all its forms.
 

DA Leader Maimane requests formal meeting with Public Protector

I have today written to the Public Protector, Advocate Busisiwe Mkhwebane, requesting a formal meeting in order to discuss a number of pressing matters linked to her office, and the performance of her constitutional mandate to investigate misconduct by government departments and entities and to protect the public’s interest.
The role of the Public Protector is integral to the proper functioning of our democracy, and now more than ever, we desperately need a Public Protector who is wholly committed to fighting for the people of South Africa – by tackling State Capture and corruption in all its forms. Therefore I will be raising the followings matters, among others:

  1. Whether she has ever met with any members of the Gupta family, in any capacity whatsoever, and if so, what circumstances necessitated such a meeting;
  2. The latest developments with regards to the new “preliminary investigation” into State Capture, which was announced on 15 June 2017. The investigation aims to determine the merits of several allegations of corruption and unlawful enrichment emanating from the infamous “Gupta Leaks”;
  3. The progress on a number of ongoing investigations following complaints by the DA over the past 12 months. These include the following:
  • Investigation into Cooperative Governance and Traditional Affairs Minister, Des Van Rooyen, for allegedly misleading Parliament and the public regarding his visit to the Gupta’s family home in Saxonwold;
  • Investigation into former acting Eskom CEO, Mr Matshela Koko, for allegedly awarding a R1 billion contract to his step-daughter while at Eskom;
  • Investigation into the R 30 million pension payout to former Eskom CEO Brain Molefe, allegedly authorised by Public Enterprises Minister, Lynne Brown;
  • Investigation into Public Enterprises Minister, Lynne Brown, for allegedly misleading Parliament when she failed to disclose if there had been any contracts of engagement between Eskom and Gupta-linked company Trillian Capital Partners;
  • Investigation into former Home Affairs Minister, Malusi Gigaba and the naturalisation of, and issuing of visas to, members of the Gupta family;
  • Investigation into Police Minister, Fikile Mbalula, and former Acting National Police Commissioner Kgomotso Phahlane for the misuse of state resources in provinding VIP protection to Nkosazana Dlamini Zuma; and
  • Investigation into the alleged breach of the Ethics Code and the Power, Privileges and Immunities Act by Mineral Resources Minister, Mosebenzi Zwane, for willfully misleading Parliament by failing to disclose his personal interests pertaining to the Guptas;
  1. Clarity regarding the allegation that she concealed submissions received from Black First Land First about her investigation into the apartheid-era bailout of Bankorp by the South African Reserve Bank (SARB); and
  2. What her plan of action is regarding those who are actually pulling the strings when it comes to State Capture – including President Zuma, several of his cabinet ministers, and the Gupta family. To date, the real architects and technicians of State Capture have escaped unscathed, while board members, senior executives, and government officials have been used as scapegoats.

We are optimistic that as a constitutional officer bearer, Adv Mkhwebane will accede to this request and be forthcoming with the information sought.
At a time such as this, when our country is under siege by thieves and captors, South Africans deserve to be assured that the constitutional bodies and institutions created to fight for them are indeed doing so, and not acting on political instruction.

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.

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.

DA demands details of R1.6 billion Tegeta-Optimum settlement be made public

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.