Eskom ‘bought’ coal mine for the Guptas

2017-07-23 06:04
Brian Molefe

Brian Molefe

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Pembani, the influential investment company that took over Deputy President Cyril Ramaphosa’s business interests, would have bought Optimum coal mine, but the acquisition was allegedly blocked by former Eskom chief executive officer (CEO) Brian Molefe.

According to sources close to the transaction, Pembani – now managed by respected entrepreneur Phuthuma Nhleko – was “better qualified” than Gupta company Tegeta to take over the mine because of funding availability. However, the latter eventually acquired Optimum after the mine was forced into business rescue by Brian Molefe, just six months after becoming Eskom CEO.

Tegeta is controlled by the Guptas and Duduzane Zuma, President Jacob Zuma’s son.

Pembani merged with Ramaphosa’s investment company Shanduka in May 2014. The transaction brought into existence a company worth R13bn and put Ramaphosa in a position where there would be no conflicts of interest between his business interests and his position as deputy president.

City Press’ sister newspaper Rapport reports that a source close to the transaction said: “There were two requirements to buy Optimum: the buyer had to provide proof that it had financing for the purchase price and that it had a contract to purchase the 4 million tons of coal that Optimum produces for the domestic market every year.

“Pembani had no problem with obtaining the financing, but couldn’t get a contract with Eskom. They only had one meeting with Eskom, but Molefe himself told Pembani at the meeting held in December 2015 that Eskom would not conclude a contract with them.”

This directly contradicts Eskom’s position on the matter, which was that it had to conclude hasty contracts with Tegeta because it urgently had to ensure the continued supply of coal from the mine.

Unlike Tegeta, Pembani is a proven player in the coal industry.

At that stage, Pembani already owned 12% of Optimum as Glencore’s black empowerment partner and was also BHP Billiton’s empowerment partner in various large coal mines.

Optimum at the time owed Pembani R128m in loans. The purchase price of R2.1bn for which Tegeta eventually bought the mine, however, meant there was barely enough money to pay Optimum’s bank debt and Pembani ended up losing the money.

Kennedy “Kenny” Bungane, CEO of Pembani, did not want to comment on the matter, but informed sources said the group “could not wait” for a judicial commission of inquiry into state capture to be established so that this information could be reported.

The astonishing admission by Anoj Singh, chief financial officer at Eskom, that Eskom provided Absa with a R1.6bn guarantee in favour of Tegeta so that it could purchase the Optimum mine, means that Eskom, for all purposes, “bought” the mine and handed it over to Tegeta.

The guarantee provided to Tegeta was signed in December 2015. According to Singh, the money for the guarantee was never used, but it nevertheless put Tegeta in a position to convince the Optimum’s two business rescue practitioners, Piers Marsden and Peter van der Steen, that Tegeta could pay the purchase price for the mine.

This means that the Tegeta guarantee was signed in the same month that Molefe allegedly told Pembani that Eskom would not conclude a contract with it.

The transaction was concluded shortly thereafter, on December 11 2015.

Singh yesterday said he knew nothing about Pembani’s intention to buy Optimum.

Former public protector Thuli Madonsela revealed in April last year that Eskom made a prepayment of just less than R659m to Tegeta. The payment was approved by Eskom’s board of directors on an urgent basis, on the same day that Tegeta was supposed to pay the final amount due on the purchase of Optimum.

Read more on:    eskom  |  brian molefe

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