Eskom was the 'main theatre where corruption and state capture was taking place' - Mabuza

2019-02-22 16:07
Jabu Mabuza (File, Elvira Wood, Netwerk24)

Jabu Mabuza (File, Elvira Wood, Netwerk24)

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When Eskom board chairperson Jabu Mabuza took office at the state-owned entity in January 2018, he found that it was the "main theatre where corruption and state capture was taking place".

Mabuza was giving evidence at the Zondo commission of inquiry into state capture on Friday, where he testified about the state that the power utility was in at the time that he joined the Eskom board.

Mabuza testified about a Treasury report, which recommended remedial action to rid the power utility of impropriety, and said the current board had not yet seen it.

Evidence leader, advocate Vincent Maleka, SC, asked: "Why would a report such as this not be tabled before a board whose mandate was to clean up allegations of impropriety, at least with the Tegeta set of contracts?"

He was referring to Tegeta Exploration and Resources, formerly owned by the Gupta family, which is at the centre of state capture allegations. Tegeta, which started to experience operational challenges, made headlines after it received a 2016 contract, which involved a R600m pre-payment, for the supply of coal to Eskom.

QUICK TAKE: 10 things you should know about Eskom's Tegeta contract

Mabuza responded: "I first learnt of the report in November 2018. It has not yet been tabled to the board.

"I would argue that there is a new board since this report was served on a previous board that was in office at the time. It is that board that would have received this report."

The 2017 report was compiled as part of a probe into coal supplier contracts with the power utility with specific reference to Tegeta.

QUICK TAKE: 10 things you should know about Eskom's Tegeta contract

In its report, Treasury concluded that the pre-payment was unlawful and recommended remedial action for Eskom.

This remedial action is yet to be undertaken according to Maleka. Mabuza, however, said this was not the case.

"Some of the remedial action we have started since my statement to the commission and some will continue. Some land in the area of criminal procedures being put in place and there are some that we are embarking on a civil nature.

"Most of the disciplinary hearings at Eskom are dealing with the contents of the Treasury report; the Matshela Koko matter for example. [Some of] the charges he was served deal with the issue of this contract. He resigned barely hours before we had the hearings," Mabuza explained.

As it probes the capture of state-owned entities (SOEs), the commission is focusing on Eskom due to its importance to the country and the economy.

The inquiry continues.

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