Johannesburg - Former Eskom Group chief executive Brian Molefe must pay back R11m to which he was not entitled, a court has heard. The Democratic Alliance (DA) and trade union Solidarity are challenging Eskom’s decisions to reappoint Molefe as CEO, as well as the approval of his R30m pension pay-out.
The matter was heard before a full bench of judges, including Judge Hans Fabricius, Judge Elias Matojane and Judge Segopotje Mphahlele.
The DA’s counsel, Paul Kennedy SC, started off the proceedings by arguing that Molefe’s early retirement agreement was an effort to get additional benefits to which he was not entitled.
“What we do submit [is that] on 11 November 2016 there was an announcement by Mr Molefe himself, Eskom and by the Minister of Public Enterprises [Lynne Brown]. They all announced the departure of Molefe, not a word was made of him taking early retirement,” he said.
“He announced to the nation, to the board of Eskom and the minister he was stepping down and no mention of early retirement.”
Molefe’s application for early retirement was submitted to Eskom on that very day and 10 days after the announcement of Molefe’s resignation, the early retirement agreement was approved, argued Kennedy.
When asked by Matojane if Molefe’s decision to step down and receive a R30m pension pay-out was in the interest of good governance, Kennedy said that in isolation, Molefe’s decision to step down was commendable. However, receiving R30m was not in the interests of good governance.
Kennedy further emphasised that Molefe had resigned, and was interpreted as such by Minister Brown. Brown four months later discovered “to her amazement” through the press of the early retirement agreement.
The reasoning to have Molefe reinstated as Eskom’s chief executive in an effort to save money, is irrational, said Kennedy. According to Kennedy, the minister’s approval of the reinstatement was in order to protect the fiscus. But Kennedy said there was nothing to be saved and Molefe was not entitled to the R30m.
“We say it is irrational to reinstate a person to save money, which he is not entitled to in the first place." The DA wants Molefe to repay the money he has received so far, roughly R11m, if their application is successful. The minister is not seeking relief, but provided explanatory affidavits on the context around Molefe’s early retirement.
Brown’s legal counsel Garth Hulley presented a short case. He reminded the court that Brown was unaware of Molefe’s early retirement and that even if there is a “common error” regarding his pension pay-out, Molefe effectively resigned on November 11, 2016.
If the court decides that Molefe in fact resigned, then the arguments regarding his pension pay-out and reinstatement cannot be taken further and falls away.
Solidarity’s counsel Anton Katz SC continued to argue that Molefe was not entitled to any pension as he was not a permanent employee who could qualify as a member and he was not over a certain age to be entitled to receive funds.
If the court rejects Solidarity’s arguments, then it should also consider that Molefe sat in a meeting about his own pension package, without declaring his interests or making an effort to recuse himself, Katz pointed out.
But Eskom’s pension and provident fund’s lawyer Thato Seroto argued that the fund had adhered to the rules, and that the arguments presented were an attempt to paint the fund’s conduct as being derelict.
Speaking on Molefe’s resignation, Katz said “If the board agreed in November 2016 that Molefe resigned, then he should pay back the money. It’s as simple as that,” he reiterated. Solidarity also wants the court to set aside Molefe’s reinstatement.
Stint in Parliament
Katz also poked holes at Molefe’s arguments that he stepped down in good faith and in the best interests of the public, by referring to his appointment as ANC MP.
Katz called for the ANC to provide an explanation for this, as it appears Molefe was only moved to Parliament in an effort to influence decision making to enable state capture.
Further, if it is true that Molefe had taken unpaid leave from Eskom, then there was no need for a reinstatement when he returned to Eskom, and he was not supposed to be an MP during the time he was away.
“There is nothing that can be said in regard to Molefe about this matter which is in good faith.”
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