Suspended Koko demands that Eskom reveals which lenders want him out

Johannesburg- The legal team representing newly suspended top Eskom executive Matshela Koko has said an apparent threat by lenders to halt credit extensions unless he leaves is an “unlawful attack” on his right to fair labour practices.

They have also demanded to know who these creditors are. 

Koko was suspended by Eskom for the second time this week. He is facing four internal charges - including misleading Parliament and allegedly breaching his fiduciary duties - in his former role as the group's acting group chief executive.

But his lawyers, in their response to Eskom which Fin24 has a copy of, say the “extreme exceptional circumstances” of his new suspension are unlawful.

Koko only returned to the power utility in January after being cleared of wrongdoing in a previous disciplinary hearing.

Deadline was met

Koko had until 10:00 on Wednesday January 31 to motivate why his suspension shouldn’t be made final. His lawyer Asger Gani confirmed to Fin24 that he had met the deadline.

In a letter setting out the reasons behind Koko's suspension, the power utility's interim CEO Phakamani Hadebe said that Koko had to be suspended immediately due to “extreme exceptional circumstances”, as lenders had refused to extend further credit to Eskom.

He said lenders argued that the power utility had failed to act against senior employees facing serious allegations of misconduct.

Hadebe warned that this refusal by lenders to extend credit could trigger an immediate collection of Eskom’s debt. He also wrote that the collapse of governance at the state-owned company had taken place while Koko was a senior executive and acting CEO. 

Eskom can’t hide behind investors, says Koko

But in his reply Koko maintains that this demand by lenders is premature, given the ongoing hearings into alleged corruption at Eskom by the parliamentary committee and the yet to be established commission of inquiry into state capture.

“The high handed approach of the investors and their unlawful demands concerning our client are totally unfounded,” Koko’s submission states.  

“If Eskom’s board has any intention again to accept matters supinely and not to resist the investors’ unlawful conduct it will necessarily become party thereto.”

Koko’s submission calls on Eskom to reveal the identity of the lenders who’ve set down these conditions, and what their demands are. He states that the power utility can’t “hide behind the conduct of others based on generalities”.

The statement by Koko’s legal team says he is willing to meet investors with Hadebe to reassure them about any concerns they have regarding his continued presence at the parastatal, and accuses Eskom of failing to explain in its suspension letter exactly how he is compromised.

Koko’s letter also denied he is guilty of any of the four new charges he faces, which include misleading the parliamentary inquiry about the R1.6bn payment to Gupta-linked company Trillian and global consultancy McKinsey, declare trips to Dubai paid for by a third party and associate of the Gupta family and distributing confidential Eskom material to Gupta contacts. 

Koko added his suspension would make it difficult for him to refute the allegations against him in the upcoming disciplinary hearing.

The submission notes that his hearing would however be an “exercise in futility”, as he believes his final suspension is a “fait accompli”.

Back again

Koko was reinstated as Eskom's head of generation on January 3 2017 after he was cleared of wrongdoing in a disciplinary hearing in December.
In that hearing he had faced six charges, including that of failing to declare his stepdaughter Koketso Choma was a director at Impulse International, a company which received contracts from the division Koko headed up.

Finance Minister Malusi Gigaba appealed to Koko to resign "in the interest of the country" after Eskom's new board, chaired by Jabu Mabuza, was appointed earlier in January. 

Meanwhile Deputy President Cyril Ramaphosa, before leaving for the World Economic Forum in Davos on January 20, said all Eskom executives facing “allegations of corruption” should be removed immediately by the new board. 

But Koko rejected the new board's ultimatum to resign within 24 hours or be fired.

He instead took the matter to the Labour Court on an urgent basis, which issued an interim order restraining Eskom from firing him on January 26.

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