Eskom wants Tsotsi out

2015-03-22 15:00

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The Eskom board wants its chairperson, Zola Tsotsi, out.

In an extraordinary and explosive meeting on Thursday evening, all board members unanimously resolved to pass a motion of no confidence in Tsotsi. On Friday some of the board members met Public Enterprises Minister Lynne Brown in Cape Town to inform her of their decision.

Sources close to the board said the charges levelled at Tsotsi by fellow board members included interfering with the executive and signing off certain documents on behalf of Eskom, thereby undermining the CEO and other executive directors. They also question his understanding of corporate governance codes.

“All of them want him out. He has absolutely no understanding of corporate governance. None,” said the source.

A week ago, Tsotsi announced the shock suspensions of Eskom CEO Tshediso Matona; finance director Tsholofelo Molefe; technology and commercial executive Matshela Koko; and head of group capital Dan Marokane.

He said the suspensions were implemented to allow the board to turn the corporation around and give it unfettered access to information the executives were allegedly holding back.

He announced that an independent, external inquiry would be set up over the next three months to investigate all allegations levelled at the executives.

Eskom later denied reports that Tsotsi had put himself in charge of the inquiry, saying an independent lawyer would be appointed to head it.

Tsotsi first tried to push for the suspension of the four executives at a heated board meeting on Monday, March 9, citing the need to have them out of the way for an inquiry to be conducted into the power crisis in the country.

City Press understands that the inquiry had been proposed by other board members on the understanding that the executive directors would be part of it. But the rest of the board were shocked to find that Tsotsi wanted to use the inquiry as an excuse to suspend the four executives. They pushed back and he was defeated.

Two days later, the board reconvened and Tsotsi returned with Brown, who supported the decision to suspend the executives. The rest of the board had to submit to this.

Brown said at the time of the suspensions that she was extremely unhappy about the lack of credible information she was receiving from Eskom on the power crisis, the construction of the Medupi and Kusile power plants, and the amount of money the utility was spending on diesel.

It emerged in Parliament this week that Eskom had overspent its diesel budget by R8?billion.

But now the board is fighting back and is accusing Tsotsi of failing to understand his responsibilities as chairperson. The board meeting on Thursday evening, which continued until the early hours of Friday, was marked by clashes between the chairperson and other members of the board. After heated arguments, the board members asked Tsotsi to leave the meeting as they wanted to discuss the issue among themselves.

According to the insider, Tsotsi was initially reluctant to leave the meeting, but was eventually overruled and had to leave the room.

“In his absence, they tabled a vote of no confidence in him. All of them want him out,” said the source.

The aggrieved board members said Tsotsi was not fit to be a nonexecutive director of a company as large and as complex as Eskom, let alone to chair its board.

The board then asked for a meeting with Brown and dispatched several board members to Cape Town to communicate their decision to her as the shareholder.

On Friday afternoon, Brown met the representatives of the board to hear them out.

“If the shareholder doesn’t accept the recommendation [to remove Tsotsi] you could see a collapse of the board,” said the source.

Speaking to City Press yesterday, Brown admitted to meeting some of the board members in Cape Town on Friday, but said the recommendation to remove Tsotsi as chairperson had not been communicated to her at the meeting.

“They asked for an urgent meeting and I gave them the meeting on Friday. In terms of the memorandum of incorporation, they have to report any resolution they are trying to take to the shareholder. There was no decision that was communicated to me. I can or cannot give them my support or tell them what needs to be done in the best interests of the company, [but] I can’t influence their decisions,” she said.

Brown said any resolution taken by the board on such matters had to be properly formulated and written down before being presented to the shareholder.

She said she had confidence in the current Eskom board and was not worried that it could collapse over the Tsotsi matter.

Asked if she would support the decision to remove Tsotsi as chairperson once the board formally communicated it, Brown said: “I will cross that bridge when I get there.”

Eskom board members contacted on the matter refused to comment.

Questions sent by City Press to Tsotsi, through the Eskom media desk, had not been responded to at the time of going to press.

Tsotsi was appointed to chair the board in June 2011 by former public enterprises minister Malusi Gigaba, who had ended the mandate of the previous board.

Following the suspensions, questions have been raised about how Tsotsi could have been allowed to remain chairperson of the board when much of the decline at Eskom, including the crippling power crisis, happened on his watch.

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