Cape Town - Eskom has made a commitment that it will ensure suspended executive Matshela Koko receives a fair disciplinary process for the four new charges he faces, and that the previous hearing will be investigated to determine if it had been a “sham”.
The power utility argued in the Labour Court on Tuesday that Koko’s application to challenge an earlier ultimatum issued by the parastatal that he either resign or be fired was misplaced, and should have instead been taken to the Commission of Conciliation, Mediation and Arbitration as the Labour Court should only be approached as a last resort.
In a replying affidavit to Koko’s application, newly appointed Eskom Group CEO Phakamani Hadebe said Advocate Nazeer Cassim will chair the internal disciplinary process. He added that the parties met on Monday to discuss the modalities of the hearing.
Koko was suspended in January and faces four charges, including misleading Parliament about the McKinsey/Trillian payment, leaking confidential Eskom information to a Gupta associate and accepting flights to Dubai from a Gupta ally.
Hadebe in his papers denied that an ‘ultimatum’ had been issued to Koko, who was told he had less than 24 hours to resign on January 25.
Koko obtained an urgent Labour Court order against this instruction by Hadebe.
Central to Eskom’s collapse
In a technical argument related to Eskom’s code of conduct and contract with Koko, Hadebe states that he wasn’t suspended due to misconduct but because of “extraordinary circumstances” and that this was not at the behest of government, but a demand by lenders.
The terms of Koko’s contract state that either party can terminate the agreement if six months’ notice is given, but the power utility has the right to end the contract “without notice for reasons justifying summary dismissal”.
Hadebe said that due to lenders’ demand that senior executives who face allegations of misconduct be removed, and the need to raise R20bn by the end of February, “Eskom was forced to choose between saving Mr Koko or its future viability and in turn that of the South African economy”.
He argues that Koko was central to the “collapse of corporate governance at Eskom” and lenders refused to advance further credit to the power utility while he remained in place, which could trigger a recall of the R361bn the state-owned enterprise (SOE) owes, backed by Treasury guarantees.
Hadebe further stated that Koko was acting group CEO between December 2016 and May 2017 when the power utility received a qualified audit, which had “severe consequences”.
He also flagged the fact that Eskom’s auditors SizweNtsalubaGobodo reported Koko and former Eskom group CEO Brian Molefe to the Independent Regulatory Board for Auditors for alleged irregularities in the financial statements.
Hadebe’s affidavit states that the SOE is reviewing Koko’s disciplinary process conducted in 2017 to see whether the manner in which it was conducted was a “sham”.
The hearing cleared him of an accusation of conflict of interest related to his division awarding a nearly R1bn contract to Impulse International, a company his stepdaughter Koketso Choma had shares in.
Rights as employee
Koko’s reply affidavit contests Hadebe’s assertion that he wasn’t suspended for misconduct but for exceptional circumstance.
He quotes Eskom’s disciplinary hearing for the Labour Court’s benefit.
“No disciplinary action shall be instituted against an employee unless he/she is afforded a proper opportunity to state his/her case and to defend him/herself against any allegations, which may be taken into consideration against him /her.”
Koko maintains he was forced to approach the courts as he was suspended before he had an opportunity to defend himself, and there remains a possibility he might be fired based on “extreme operational need”.
“Simply put, the alleged situation in which Eskom allegedly found itself on Thursday, January 25 2018, did not and does not in any way justify Eskom’s infringing my contractual rights as an Eskom employee," his replying affidavit states.
Koko writes that an investigation by forensic auditors Nkonki Inc and law firm Cliffe Dekker Hofmeyr cleared him of wrongdoing regarding potential conflict of interest with Eskom doing business with Choma. This formed the basis for him not being found guilty by the disciplinary process, which he argues was correctly constituted.
“I deny that there exists any factual or legal basis for Eskom to simply terminate my continued employment based on malicious media reporting and to succumb to pressure by apparently powerful third parties, be it lenders or the government."
Judgment has been reserved in the Labour Court and the disciplinary process could start as early as next week.
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