Eskom inquiry to kick off with explosive reports

Cape Town – Parliament is starting its inquiry into Eskom on Tuesday – a week before the legislature officially reopens - with a briefing from two civil society groups, which did their own investigations into state capture allegations.

The Organisation Undoing Tax Abuse (OUTA) and the South African Council of Churches (SACC) will brief MPs of the portfolio committee on public enterprises on the contents of their own reports, showing how President Jacob Zuma, some Cabinet ministers and officials of state-owned entities facilitated the plundering of the parastatals to the benefit of his son Duduzane and the Gupta family and their associates.

The SACC recently released the report, Unburdening, which revealed the many ways in which powerful groups and individuals aligned to Zuma allegedly helped loot state institutions, among them Eskom.

Outa’s report – No room to hide: A President caught in the act – was released at the end of June. In a 175-page dossier, the organisation unpacks several months of investigation into state capture, detailing how among other things Eskom allegedly awarded several billion rands' worth of coal-supply contracts at inflated prices to Gupta-owned coal mining company Tegeta Exploration and Resources between 2015 and 2016.

On June 21, the portfolio committee on public enterprises adopted the terms of reference of an inquiry into Eskom, which will among other things investigate the pension payout of former Eskom CEO Brian Molefe and his subsequent reappointment, the coal contracts the power utility entered into and the way Eskom appoints and remunerates board members and executive management, as well as the leaked Gupta emails which allegedly reveal numerous instances of underhandedness in the contracts Eskom entered into.

The committee will call a number of witnesses to make representations and/or testify during the investigation process, including Eskom financial chief Anoj Singh, Molefe, former Eskom board chairperson Ben Ngubane, former Eskom CEO Tshediso Matona, former Eskom chairperson Zola Tsotsi, former executive for group capital Dan Marokane and Duduzane Zuma.

Parliament will also consider all seven reports into maladministration at Eskom, including an investigation into the status of the business and challenges experienced by Eskom done by Dentons in July 2015, PricewaterhouseCoopers’ Coal Quality Management review dated November 2015 and former Public Protector Thuli Madonsela’s State of Capture report of November 2016.

The deployment of former finance minister Pravin Gordhan as an ANC member of this committee breathed new life into its watchdog role over South Africa’s state-owned enterprises. Gordhan is expected to lead the charge in the Eskom inquiry, as he has the benefit of insights into especially the coal contracts Eskom entered into with Tegeta during his tenure as political head of National Treasury.

Mounting evidence against Eskom high-flyers

Although the extent of shenanigans at Eskom has been well documented and widely reported on, the reports of both civil society organisations will serve as additional evidence in the course of the parliamentary inquiry.

Apart from detailing how state institutions such as Eskom were looted for the benefit of the president’s son Duduzane and the Guptas, the SACC and Outa pointed out in their reports how the president and a selected number of Cabinet ministers and officials tried to secure control over the public service by weeding out skilled professionals.

Public Enterprises Minister Lynne Brown’s decision in December 2014 to appoint a number of individuals to the Eskom board who have ties with the Guptas and their close business associate Salim Essa is a case in point. They include:

  • Nazia Carrim, wife of Muhammed Noor Hussain who is a family member of Gupta business associate Salim Essa;
  • Romeo Khumalo, co-director, who served with Essa in a company;
  • Mark Pamensky, former director of Gupta-owned company Oakbay;
  • Mariam Cassim, who previously worked for another Gupta-owned company, Sahara;
  • Former chairperson Ben Ngubane, who was a business associate of Essa;
  • Kuben Moodley, who was in business with Pamensky and advises Gupta-aligned Mines Minister Mosebenzi Zwane; and
  • Viroshni Naidoo, Moodley’s wife.

The above individuals subsequently resigned as board members and an interim board was appointed in June this year.

In the reports, it is revealed how Eskom started paving the way for the Guptas’ acquisition of Glencore’s coal mine Optimum by imposing a R2.1bn fine on Glencore for supplying poor quality coal in July 2015. Ironically, in the same month Eskom lifted the suspension on the Guptas’ Brakfontein Mine which was also found to deliver poor quality coal, the SACC said in its reports.

In November 2015, Zwane travelled to Switzerland to help clinch the sale of Optimum to Gupta-owned Tegeta Resources. 

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