How Eskom bosses gave Trillian a big payday

As Parliament gears up to probe alleged state capture at Eskom amid concerns about governance at state-owned enterprises (see report below), more skeletons have come tumbling out of the power utility’s cupboard, writes Legalbrief. Investigative units Scorpio and amaBhungane continue to expose shenanigans at Eskom. In their latest exposé on the Daily Maverick site, they note it is well established that Eskom paid Trillian R595m without a valid contract while lying to the public about doing so, but how the Gupta-linked company was sneaked onto Eskom’s payment system – a system designed to prevent fraud – has always been a mystery. The report claims a series of interviews and leaked documents allege suspended chief financial officer Anoj Singh and his management team bent over backwards to get Trillian their payday, sometimes bullying mid-level officials into fabricating documents.

Singh and his senior management team – Edwin Mabelane, Prish Govender and Charles Kalima – have been identified as key players in the Trillian debacle, which has also ensnared global consulting firm McKinsey. This emerges from Eskom’s own report, the explosive G9 Forensic interim report, and also from 10 draft charges in the disciplinary process against Singh, notes the Daily Maverick. Singh was suspended on Friday, 29 September and Eskom confirmed on Monday 2 October that Singh’s colleagues, Govender, Mabelane and Kalima, also face suspension. Draft charges against Singh detail how Singh, Mabelane and Govender allegedly acted together over a period of months in order to ensure Trillian’s payday. Singh, Mabelane, Govender and Kalima now face disciplinary charges for allegedly misleading the board tender committee, breaching their fiduciary duties, unauthorised and irregular expenditure and financial misconduct. G9 Forensic also recommended criminal investigations be launched. Singh did not answer specific questions put to him, but said he had not been interviewed by G9 Forensic investigators, nor had he seen their interim report. The G9 Forensic investigation was triggered when a whistleblower reported the irregular payment of an invoice for R152.76m submitted by Trillian in December 2016. The DM says neither Mabelane, Govender, Kalima nor Eskom commented on specific questions relating to the allegations.

In more shenanigans revealed over the weekend, cash-strapped Eskom wants Treasury to approve the expansion of a contract to buy thousands of office chairs at an average of around R2 600 each. According to the Sunday Times, the power utility – so mired in corruption and mismanagement scandals that it has been named the ‘biggest risk to the SA economy’ by Goldman Sachs – wanted an extra R24m to buy 9 217 ‘operator and visitor chairs’. This is on top of an existing R72.7m contract, signed in 2013, to supply office and ‘soft’ chairs. Suspicious of the latest request, the National Treasury conducted a physical inspection of Eskom’s offices and power stations, and, according to the Sunday Times, it found only 500 chairs were needed. And, in what appears to be another questionable episode, the report also notes that the first action of IT executive Sean Maritz, now Eskom’s interim CE, was to suspend the firm’s head of legal, Suzanne Daniels – a move seen as putting the brakes on Eskom’s endeavours to recover R1.5bn from Gupta-linked McKinsey and Trillian, a decision announced and generally applauded last week.

Security concerns have precluded the names of witnesses relating to Parliament’s pending probe into state capture at Eskom from being publicised, the Portfolio Committee on Public Enterprises revealed yesterday (Wednesday), notes a BusinessLIVE report. The inquiry, which is due to get under way next week, will look into state capture and the abuse of public resources particularly at Eskom. It will have an experienced legal practitioner as an evidence leader, as was the case in the SABC inquiry. The committee yesterday met behind closed doors to discuss the inquiry process with the evidence leader. Witnesses will be called from Tuesday, acting committee chairperson Zukiswa Rantho said.

McKinsey will repay the fees it earned for six months’ work last year at Eskom if a High Court finds the deal was unlawful, the global consultancy said on Tuesday, according to a BusinessLIVE report. Eskom had given McKinsey and its local partner Trillian until Tuesday to repay R1.6bn in consultancy fees for a contract that the state firm says was illegal. McKinsey said it would pay back the fee in full if the court determines Eskom acted unlawfully, adding that it was solely Eskom’s responsibility to ensure the contract met regulations. McKinsey’s offer to repay the money had put Trillian in a tight spot, the report notes. It came into the deal as a junior partner on the McKinsey contract. ‘Trillian would have to demonstrate it was legally entitled to the money,’ lawyer Matodzi Ratshimbilani, of TGR Attorneys, said. The report adds legal experts said that McKinsey would have to stump up Trillian’s portion as well as it was the main contractor to the deal. Meanwhile, the Gupta-linked Trillian financial firm is giving SA the silent treatment, notes a TimesLIVE report. ‘Trillian will not be commenting on the statement by McKinsey‚’ a spokesperson for the firm is quoted in the report as saying.