Guest Column

Why we shouldn't trust Molefe at Eskom

2017-05-12 14:55
Eskom CEO Brian Molefe. (Lerato Sejake, News24)

Eskom CEO Brian Molefe. (Lerato Sejake, News24)

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Pieter-Louis Myburgh

My colleagues and I approach Fridays with a sense of dread.

The last day of the workweek has of late slapped us with important news developments just as we start daydreaming about the weekend ahead.

As if on cue, reports about Brian Molefe’s reappointment as Eskom CEO hit our newsroom and the rest of this country on Friday morning. The reaction to the development was, of course, stronger than the most potent fire water the Saxonwold shebeen could ever offer.

It wasn’t only the Twittersphere that erupted in a storm of digital dismay. The ANC’s harsh and open criticism of the Eskom board’s curious move is yet another indication that what were once mere crevices of disagreement within the ruling party have become deeply entrenched fault lines that threaten to split the organisation.

Molefe’s reappointment by the Eskom board – which, lest we forget, is accountable to Lynne Brown, the ANC-designated Minister of Public Enterprises – was “unfortunate” and “reckless”, growled ANC spokesperson Zizi Kodwa in a statement fired off shortly after the story broke.

The statement went even further and directly lambasted the government of President Jacob Zuma for allowing Molefe to return to one of the country’s most important state owned companies (SOC’s) after he left Eskom “under a cloud” late last year. The patch of bad weather Kodwa was referring to includes Molefe’s dodgy conduct during his previous stint as Eskom boss, as highlighted by former Public Protector Thuli Madonsela in her “State of Capture” report.

“The decision therefore to reinstate him in his former position without these matters being resolved is tone deaf to the South African public’s absolute exasperation and anger at what seems to be government’s lacklustre and lackadaisical approach to dealing decisively with corruption – perceived or real,” read an ANC statement that must surely constitute the most venomous critique of Zuma and his allies that Kodwa and Co. have released to date.

The ANC has, of course, in the past openly aligned itself with public sentiment when it comes to government conduct generally deemed to be “reckless”. One could debate over whether the ANC’s previous and latest attacks on government constitutes an opportunistic attempt at political point-scoring, or, instead, a genuine disapproval of the manner in which the Zuma-led government is running the country. But what lies at the core of this particular ANC statement is a distrust in Molefe’s ability to run Eskom in a proficient and honest manner. It is a distrust that we should all share. 

Several years before “state capture” would become such a prominent topic in our political discourse, Molefe was already linked to the infamous family who would later land him in hot water at Eskom.

In 2011, The Sunday Times reported that Zuma himself had personally intervened to have Molefe’s tenure as Public Investment Corporation (PIC) CEO extended, allegedly to ensure that Molefe would rubberstamp a PIC loan to the Guptas in order for them to acquire their uranium mine, Shiva Uranium. The PIC loan did not materialise, but the Guptas did manage to score a plush R250 million loan from the Industrial Development Corporation (IDC).

There are further reasons to be suspicious about Molefe’s dealings at the PIC.

In February, News24 revealed that Molefe had bought an upmarket property for what appeared to be a considerable discount. The transaction was significant and certainly warrants further scrutiny given the fact that the seller of the house was none other than the CEO of a PIC-owned investment company that was set up during Molefe’s tenure as PIC boss. The deal seems fishy, to say the least.

When Molefe moved on to become the CEO of Transnet in 2011, the state-owned transport and logistics giant was gearing up to embark on its Market Demand Strategy (MDS), an infrastructure and rolling stock investment program that would see Transnet spend an astronomical R300 billion between 2012 and 2019. This is mega bucks, and the Guptas certainly took note. Investigative journalism unit amaBhungane revealed in 2014 that VR Laser – a company in which Rajesh Gupta, the youngest of the Gupta trio, and Duduzane Zuma, were shareholders – had somehow been picked to provide steel-cutting services to the major locomotive manufacturers that won stakes in Transnet R50bn tender for new locomotives. Ka-CHING!

There are other Transnet deals concluded during Molefe’s tenure as the parastatal’s CEO that have the Guptas’ grimy prints all over them, including the awarding of a telecommunications contract that saw alleged kickbacks being channelled to a “letterbox” company linked to the family.

Eskom

Where Molefe goes, the Guptas score.

This became particularly apparent during Molefe’s previous tenure as Eskom CEO. The state owned power utility drew the ire of the Public Protector for the way in which it conducted its business with Tegeta Exploration and Resources, the Guptas’ coal mining venture in Mpumalanga. The Molefe-led Eskom was the most active roleplayer in what appeared to have been a deliberate effort to suppress any chance of keeping Tegeta financially viable whilst the mine was owned by the Guptas’ predecessors. And after the Guptas bought the mine, the multi billion rand Eskom coal contracts really started to roll in. Not to mention Eskom’s astonishing decision to award Tegeta a prepayment of nearly R600m for coal it had not even delivered yet.

These questionable dealings – which Madonsela suggested in all likelihood contravened the Public Finance Management Act – of course coincided with a remarkable level of contact that Molefe maintained with the Guptas and some of their associates. Madonsela’s report, for instance, highlights a total of 58 telephone calls between Molefe and Ajay Gupta, eldest of the Gupta brothers, between August 2015 and March 2016. This timeframe is significant given the dubious coal deals that the Molefe-led Eskom was concluding with the Guptas’ Tegeta mine at the time.

And apart from a failed attempt at humour that saw Molefe shrug off his alleged visits to Saxonwold by referring to the country’s most famous non-existent watering hole, Molefe has to date not been able to provide a clear-cut and straight answer that clarifies the reasons for his frequent stops at or near the Guptas’ home suburb.

Nuclear future

I strongly suspect that there was substance in the earlier rumours that Zuma and the Guptas wanted to see Molefe at the helm of the country’s Treasury. However, faced with a barrage of disapproval over such a move from within the ruling alliance, Zuma retreated a little and offered the somewhat more acceptable Malusi Gigaba as a compromise candidate to become finance minister.

This left Zuma and the Guptas with a bit of a conundrum; as an ordinary member of Parliament, Molefe’s strategic value had significantly waned. The obvious answer to this problem was to move Molefe back to Eskom, where he would be ideally situated to breathe new life into Zuma’s fantasy for large-scale investment in new nuclear power facilities.

Molefe’s reappointment should therefore keep us all awake at night. If something as potentially crippling as the nuclear deal does go ahead, it will be South Africans, and not Molefe, who will have reason to shed tears.

- Pieter-Louis Myburgh is an investigative journalist at News24. His book, The Republic of Gupta, is now available in stores and online.

Disclaimer: News24 encourages freedom of speech and the expression of diverse views. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24.

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