Why Ben Ngubane quit

2017-06-18 06:01
Ben Ngubane

Ben Ngubane

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Ben Ngubane resigned as Eskom board chairperson this week because Public Enterprises Minister Lynne Brown rejected the man he wanted as acting chief executive officer (CEO) of the power utility.

At a heated meeting on Monday, held shortly before Ngubane quit in a huff, he punted Zethembe Khoza as acting CEO, a job left vacant after the controversial departure of Brian Molefe.

Two sources with intimate knowledge of the meeting alleged that Ngubane also threatened to report Brown to President Jacob Zuma if she did not accept the man he wanted.

“He threatened to resign if the minister didn’t appoint this guy; the minister told him to go ahead,” said one.

“He then threatened to report her to the president; again the minister told him to go right ahead.”

Instead, Khoza, a nonexecutive Eskom board member, was appointed interim board chairperson “until I am able to take new board appointments to Cabinet for approval”, said Brown’s late-night statement on Monday confirming Ngubane’s resignation.

The other person on Ngubane’s list of two, according to other sources with inside knowledge, is believed – but not confirmed – to be Ayanda Noah, Eskom’s executive in charge of power distribution.

Noah has been involved in trying to recoup the billions of rands municipalities around the country owe the power utility.

The sources said that, after the fraught meeting, Ngubane returned to Brown’s office after 15:00 with his lawyer to hand in his resignation.

Brown announced Ngubane’s resignation in a statement issued by her spokesperson Colin Cruywagen after 23:00 on Monday.

Ngubane declined to speak to City Press when contacted for comment on Friday.

“No, I’m not talking to the press,” he said before ending the call.

Turmoil

Eskom’s top governance structures have been in turmoil for weeks.

Molefe returned as CEO on May 15 after an absence that was variously described as early retirement and unpaid leave, during which he served a three-month stint as an ANC MP.

His reappointment was overturned on May 31, Brown announced, after a recommendation by a specially established interministerial committee.

At that media briefing, Brown said the board would give her at least two names from within Eskom’s executive to act as group chief executive, and that an appointment would happen “within the next 48 hours to ensure continuity”.

She also said she was looking at “rotating” the board.

But 18 days later, Eskom still has no CEO, acting or otherwise.

The reason Ngubane pushed for Khoza to be acting CEO is unclear.

If Brown agreed, it would have been his second stint in the acting post he previously held between March and April 2015, after CEO Tshediso Matona was suspended and left.

Khoza was followed as CEO by Molefe.

Two days after his appointment as interim Eskom board chairperson, Khoza, a former Telkom customer services boss who heads his own investment company, filed an affidavit in the Labour Court saying Eskom would not oppose Molefe’s challenge to his dismissal, and that Brown had to defend it alone.

Court papers filed on Thursday show Eskom supports Molefe’s story of how he mistakenly went on early retirement that was linked to a R30m pension payout.

But in her papers, Brown appears to have changed her tune about Molefe’s resignation, unpaid leave and the legality of his reinstatement.

Brown states that while the interministerial committee’s recommendation may be influenced by political considerations, Molefe’s reinstatement agreement was not legally valid.

“I submit that Mr Molefe has, therefore, not been dismissed as he claims.

"His reinstatement as CEO was premised on an invalid agreement. I directed the board to rescind the illegal reinstatement.

"There was no dismissal as there had not been a valid appointment after Molefe’s resignation on November 11 2016.”

In her affidavit, Brown says that, since Molefe was the one who concluded that early retirement was the best way to protect his interests, it was unthinkable that he would not consider this option carefully and earnestly.

“To do so, he would have to satisfy himself that he met the requirements for early retirement. This required him to consider the rules ...

"The notion that the [CEO] of Eskom, a corporation with a budget of several billion rand, would be so reckless in protecting his own interest, with respect, beggars belief,” she said.

Brown also questions how Molefe proceeded from the point where he sought to protect Eskom’s interests, to where he would receive R30m.

“It was clearly not in Eskom’s best interest that a person who had been employed for just 13 months should receive, in addition to his ordinary salary and other benefits including a substantial bonus, an amount in excess of R30m…”

Brown also argues Molefe’s application was not urgent.

“His personal circumstances are certainly no better than those of the majority of South African citizens who have to wait in line to have their matters determined in the ordinary course.

"If anything, Mr Molefe, who is clearly very wealthy, can wait in line as well.”

Investigation

Eskom’s previous acting CEO, Matshela Koko, the executive in charge of power generation, is on leave while he is being investigated for possible conflict of interest involving the awarding of contracts worth about R1bn to a company owned by his stepdaughter.

He is also linked to the Gupta family, who paid for his luxurious Dubai hotel stay, according to the #GuptaLeaks.

He allegedly channelled R659m to Tegeta Exploration and Resources, owned by the Guptas and Zuma’s son Duduzane, to help it buy Optimum Mine for R2.1bn.

Koko is also under investigation by Public Protector Busisiwe Mkhwebane, who late on Wednesday night announced a “preliminary” investigation into Eskom, Transnet and Passenger Rail Agency of SA, which have all been accused of dodgy dealings in the #GuptaLeaks emails.

Meanwhile, sources close to Brown claim she wanted to appoint a CEO candidate who was beyond reproach, and that was why the appointment was delayed.

“Following the scandals that surrounded the last acting group CEO [Koko], the minister wants someone who is going to be ‘clean’.

"It can’t be that when we appoint a CEO, that person’s scandals are in the media every week,” said one source.

But time is running out. Eskom’s annual general meeting (AGM) is scheduled for Friday.

It would be good if Brown, as the minister in charge, could go into this meeting with the power utility’s management turmoil moving towards settlement.

The Eskom AGM presents an opportunity for Brown to intervene in the board in an effort to end the cloud hanging over it since the Molefe controversy, particularly now that Ngubane has resigned.

The Eskom board has been at various stages loaded with Gupta family acolytes.

In early November last year, Molefe publicly said he was leaving Eskom “in the interests of good corporate governance”, days after the Public Protector’s State of Capture report listed more than 40 telephone calls linking him to the Guptas and their business associates, while Eskom was negotiating the Tegeta coal deal.

Molefe, Ngubane and Eskom have emerged central to state capture allegations emanating from the #GuptaLeaks emails.

The Public Protector’s preliminary probe will also include Molefe’s reappointment as Eskom CEO, allegations that Koko leaked a legal opinion to the Guptas and that Molefe and Ngubane put pressure on former mineral resources minister Ngoako Ramatlhodi to help the Guptas take over the Optimum coal mine.

The investigation will also include Brown’s role in the Molefe saga and her “failure to exercise executive oversight” over Eskom’s board and management.

Both sources who spoke to City Press this week said Brown was now “cleaning up”.

Cruywagen confirmed to City Press that Brown had received more proposed names for the acting CEO position.

He added that she was “applying her mind” and an announcement would be made on an appointment soon.

But he declined to comment on Monday’s events, nor would he comment on any proposed names.

“I am not going to discuss the meetings of the minister,” Cruywagen said when asked about the meeting with Ngubane.

“I refuse to be drawn into details about the names and who has been nominated. It would be unfair on the candidates.”

Read more on:    eskom  |  ben ngubane  |  lynne brown

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