OVERVIEW: Maritz signed Huarong deal without board's approval - Eskom treasurer at #StateCaptureInquiry

2019-03-01 16:30

The judicial commission of inquiry into state capture heard testimony from Eskom treasurer Andre Pillay, regarding the Huarong deal and other operational matters around that time.

WATCH LIVE: State Capture Inquiry 

(Courtesy of SABC)

Deputy Chief Justice Raymond Zondo
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Last Updated at 01:27
01 Mar 16:32

Zondo thanks Pillay for coming to the commission with his evidence, and excuses him for now. 

Proceedings adjourn until Monday, 10:00.


01 Mar 16:30

Advocate Norman starts wrapping up her line of questioning with Pillay.



01 Mar 16:23

01 Mar 15:49

Pillay says Maritz was not dismissed, but he was suspended and during his disciplinary hearing he resigned, in March 2018.


01 Mar 15:38

01 Mar 15:37

01 Mar 15:23

01 Mar 15:19

Pillay says after the agreement was signed and the invoice was issued, they approached National Treasury and Public Enterprises to request approval of government guarantee. Pillay says the Huarong deal was signed without the approval of government. 

Pillay: "Mr Maritz signed, and there was still this process with Huarong to pursue the short-term facility into December, up until they came back and indicated that they are not able to do that."


01 Mar 15:00

01 Mar 14:58

01 Mar 14:57

01 Mar 14:52

01 Mar 14:49

Pillay says there was a subsequent meeting regarding Maritz's decision to sign the deal without the approval of the board. Pillay says that Maritz said the minister of public enterprises told him to sign. Three days after Maritz signed the Huarong deal, Pillay says, Eskom got an invoice to pay. He says he told treasury not to pay that invoice.


01 Mar 14:39

01 Mar 14:29

#StateCapture: Eskom executive details signing of R25bn Chinese loan

The Commission of Inquiry into State Capture on Friday heard how former Eskom financial officer Anoj Singh drove the process for a R25bn loan facility from China’s Huarong Energy Africa.

Eskom head of treasury, Andre Pillay, said the company had approached the power utility with the unsolicited offer in 2015. 

An Eskom delegation had travelled to China with an intention to further explore the offer. The terms of the loan would include a $30m cancellation fee and a R400m "signature fee", according to earlier reports.

It was previously reported that the terms of the controversial loan, which Eskom was to use to refurbish power stations, also allowed Huarong to select and approve contractors. No agreement was reached from the first China visit. 


01 Mar 14:27

01 Mar 14:17

01 Mar 14:15

01 Mar 14:08

Back from the break, Advocate Norman continues leading Pillay's evidence, and asks for details on the facility fees and cancellation fees for the Huarong deal - the facility fee was $24m, the commitment fee was $12m, and the cancellation fee was $3m.



01 Mar 13:01

The lunch adjournment is called. Back at 14:00.


01 Mar 13:01

01 Mar 12:56

Pillay reads from the document before him, saying it was recommended that all other funding options should be exhausted before considering the proposed Huarong solution, which was considered "onerous, and more expensive than Eskom's traditional sources of funding".


01 Mar 12:48

01 Mar 12:22

01 Mar 12:22

01 Mar 12:11

Pillay: "Mr Singh was going to sign this thing, regardless of what I say..." 

Pillay now tells Zondo about another incident involving Singh. 

Pillay: "He arrived in the office, and I was sitting in a meeting with external people, he arrived in the office and handed me an envelope. And his words to me were: 'Here's a love letter for you'..." 

Pillay: "I concluded on the meeting but I was quite anxious to see what's in the letter, in the envelope, [and] in the envelope was the financial profile of one of my colleagues called Marius [surname unclear]. I looked at it and went to his office to ask what is the situation with this letter? His words to me were 'Tell him to leave. You must get rid of him'. And there was no basis..." 

Pillay says it was someone who reported to him at the time. And the instruction was 'You must get rid of him'. Pillay says it was out of the blue, but it was part of what they saw happening in the organisation - how people were made to leave if they were not willing to co-operate.

Pillay says Singh's attitude was basically if you don't do it, they will get someone else to do it. 


01 Mar 11:56

01 Mar 11:51

Pillay says it was not the norm to sign a term sheet that was binding. "It meant that if we signed the contract, the fees stipulated in the term sheet become payable," Pillay says. 

Pillay says all concerns were raised with Singh. 


01 Mar 11:48

01 Mar 11:44

Pillay now discussing how government guarantees work. He says Singh was frustrated with relying on government guarantees.


01 Mar 11:39

Back from the break, Advocate Norman continues leading Pillay's evidence.


01 Mar 11:23

Zondo calls for the morning adjournment. Back at 11:35.


01 Mar 11:17

Pillay says Eskom then hired McKinsey and Trillian to prepare the company's corporate plan. He says Singh called and chaired the meeting.

Pillay says it was made to seem as if Eskom treasury wasn't equipped to draft the corporate plan. According to Pillay, treasury would normally be responsible for drafting the funding and corporate plan.


01 Mar 11:12

01 Mar 11:08

Pillay says the board IFC said they should negotiate, but not sign anything.


01 Mar 11:01

Pillay says there was no agreement reached, and at some point Singh returned to South Africa while the others discussed the proposal - Singh left him with three others to discuss the offer further. 

Pillay says Eskom recommended a way forward which required board approval, and further negotiations. 


01 Mar 10:57

Pillay also mentions meeting with Rex Madida, who he says was part of the Tribus group which travelled to Beijing from South Africa.


01 Mar 10:52

Pillay now telling the commission about a trip to China, on behalf of Eskom. Pillay and Singh travelled to China to secure a facility from the Chinese Development Bank, and the trip was extended to deal with Huarong.


01 Mar 10:49

01 Mar 10:39

01 Mar 10:31

Pillay delves into the Huarong matter, says a company called Tribus contacted him in 2015 offering a financial solution. Shortly after that, Tribus approached Eskom with Huarong.

Pillay says the proposal from Huarong was unsolicited - they offered Eskom a R25bn loan.


01 Mar 10:25

01 Mar 10:20

Advocate Norman runs through Pillay's qualifications and his role at Eskom.


01 Mar 10:18

01 Mar 10:18

Pillay is sworn in, and his evidence will be led by Advocate Thandi Norman from the commission's legal team.


01 Mar 10:15

Eskom treasurer Andre Pillay ready with his testimony. (Screenshot)


01 Mar 10:08

Proceedings have commenced. Deputy Chief Justice Raymond Zondo starts off by discussing evidence bundles and procedural matters with his legal team.


01 Mar 10:00

ICYMI: 

ANALYSIS: 

Manuel on Zuma's abdication of duty – and how the Guptas took power 

Trevor Manuel on Thursday used rhetoric that became extinct in the executive of former president Jacob Zuma and used language that has largely disappeared from public service since.

In his testimony to the judicial commission of inquiry into allegations of state capture, headed by Deputy Chief Justice Ray Zondo, the former minister of finance spoke about being faithful to the Constitution, about the oath of office sworn to by the president and public representatives, about "necessary care and attention to detail" when managing public finances and about confidentiality when appointing a minister. 


01 Mar 10:00

ICYMI: 

Mbalula vows to 'amplify the truth' at state capture inquiry 

Fikile Mbalula has vowed to "amplify the truth" when he testifies before the state capture commission of inquiry.

"Everything that [former finance minister] Trevor Manuel said regarding head of elections about me is true, and it is now up to me to go to the state capture commission and amplify that truth and put it into context," Mbalula, who is the party's head of elections, said.

Manuel testified at the commission on Thursday and told Deputy Chief Justice Raymond Zondo that Mbalula had an emotional reaction during one of the party's national executive committee (NEC) meetings over an interaction he had with one of the Gupta brothers. The Guptas are at the centre of state capture allegations.


01 Mar 10:00

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