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Suspended legal head drops Eskom bombshells

Publish date: 09 November 2017
Issue Number: 587
Diary: Legalbrief Forensic
Category: State capture

Eskom's suspended head of legal Suzanne Daniels dropped a succession of bombshells yesterday (Wednesday) at the parliamentary inquiry into the utility as she described the commanding power of the Gupta family, notes a Cape Times report. It says Daniels implicated Public Enterprises Minister Lynne Brown and top officials in corrupt dealings with the Guptas’ business empire. Daniels told stunned MPs that Ajay Gupta wanted to manipulate the court dates of the case into former CEO Brian Molefe’s pension payout so that the matter would be heard only after the ANC’s elective conference in December this year. She said Salim Essa, a prominent business associate of the Gupta brothers, called her to Melrose Arch on 29 July this year and took her to a townhouse where she was confronted by Gupta, President Jacob Zuma’s son Duduzane and Deputy Public Enterprises Minister Ben Martins. ‘As we walked into the lounge area, there were four people which I were introduced to (as) Mr Ajay Gupta, Mr Duduzane Zuma and Deputy Minister of Public Enterprises Ben Martins and a Chinese lady whose name I cannot remember because at this point I was actually speechless,’ she said. She said Gupta, in bare feet and track pants, asked when the legal challenge to Molefe’s R30m pension payout from Eskom would be heard. She replied that no date had been set and, since more parties were joining the court proceedings, this needed to be discussed with the deputy judge president’s (DJP’s) office. ‘He said he will then have to talk to someone in the DJP’s office (to) make sure the hearing takes place after December 2017.’

Full Cape Times report

Explosive revelations about the influence of the Guptas on the procurement at Eskom also came to light, notes a BusinessLIVE report. It says it emerged yesterday that:

* Interim CEO Collin Matjila, who was at the helm of Eskom for about six months in 2015, insisted on personally signing a R43m deal with The New Age newspaper for the holding of business breakfast events, when the financial director refused to do so.

* The Eskom Pension and Provident Fund was misled about the nature of former CEO Brian Molefe’s employment contract. He was loaded into the system as a permanent employee despite being on contract. This had a bearing on the R30m pension payout Molefe received and which is being contested.

* The R600m ‘pre-payment’ for coal supplies was made in a hasty manner to Gupta-owned Tegeta Exploration and Resources so it could buy the Optimum Coal mine from Glencore.

* Trillian Capital was paid R564m, even though there was no contract and no work done.

Full BusinessLIVE report

See also a TimesLIVE report

Former Eskom group CEO Tshediso Matona described how the governance and ethical environment at the parastatal was deteriorating when he took over as CEO in late 2014, notes a TimesLIVE report. There was also deep infighting within the board‚ led by then-chair Zola Tsotsi‚ over procurement issues‚ to the extent that the board had become almost dysfunctional. On Tuesday, Matona‚ who was Eskom CEO from October 2014 to March 2015‚ presented evidence to the inquiry by Parliament's Public Enterprises Committee into allegations of state capture of state-owned enterprises. He said at the time of his tenure‚ the moral and the ethical fabric of the company needed urgent attention. Several employees were on suspension‚ and the numbers were increasing. Matona was suspended in March 2015 for reasons that he could not understand‚ but he surmised that his continuation as CEO did not fit in with the plans of the board. He said his suspension came as ‘a complete shock’ to him. The decision was taken by a new board that had just taken office‚ before it had even taken the time to familiarise itself with the affairs of the company. The new board was reportedly packed with Gupta-linked members. Matona was later replaced by Molefe‚ who was accused in former Public Protector Thuli Madonsela's State Of Capture report of having facilitated the awarding of contracts to Gupta-linked companies.

Full TimesLIVE report