Former Eskom manager denies being deceptive about R659m 'advance' to Gupta company

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  • The State Capture Commission is hearing evidence on a R659 million "prepayment" Gupta-linked Tegeta received when it first made an unsolicited coal supply offer to Eskom.
  • It later emerged that Tegeta had a R600 million funding shortfall for the acquisition of a Glencore-owned mine.
  • Deputy Chief Justice Raymond Zondo questioned the timing of the advance payment, given Tegeta's funding problems.

The Judicial Commission of Inquiry into State Capture on Tuesday resumed evidence relating to Eskom's R659 million advance payment in 2016 to a Gupta-linked entity, Tegeta Exploration and Resources, with a former manager at the power utility detailing the events around the transaction.

Ayanda Ntetha told the commission that while Eskom was in the process of negotiating the contract, Tegeta CEO Ravindra Nath had asked that the company be paid an upfront payment for its services. The demand for prepayment followed an unsolicited bid from Tegeta to supply coal.

It came at a time when Tegeta had struggled to secure a R600 million funding shortfall it required for the acquisition of the Optimum Coal Mine from Glencore.

Ntetha told the inquiry that she was not aware that the company had had difficulty securing funding from commercial banks and that Nath had not initially raised the issue of prepayment during his early engagements in April 2016.

"The discussions we had prior to April did not involve a prepayment."

Tegeta at the time already had two short-term contracts with Eskom, one signed in January 2016 and another in February 2016, which was about to expire. 

The commission's chair, Deputy Chief Justice Raymond Zondo, asked Ntetha if it did not seem "too coincidental" that the company would require a prepayment nearly similar to the funding it had failed to get from the banks.


In her response, Ntetha said she was not aware that Tegeta was looking to get R600 million for the purchase of Optimum and the power utility was at the time under pressure to acquire coal.

"Mr Nath indicated to me that, 'while we have coal to offer, we would require that Eskom pay for this coal upfront', and that is when the discussion started," she said.

Tegeta had intended to source coal from Optimum Coal Mine, which was later placed under business rescue by its owners after running into financial difficulties. The prepayment that was eventually approved by the Eskom board a few days after a late-night board tender committee resolution is said to have helped Tegeta purchase Optimum.

However, in an affidavit read by evidence leader Advocate Pule Seleka, former Eskom board chairperson Zethembe Khoza addressed the issue of prepayment, which he claimed  was "underplayed" and "hidden" from the submission that Ntetha had prepared for the board. 

Khoza accused Ntetha of being "deceitful" and having colluded with Eskom's former legal head Suzanne Daniels in influencing the Tegeta matter.

In her defence, Ntetha said Khoza had made sweeping and unfounded allegations about her being instrumental in setting a date and time for the board tender committee meeting to deliberate on the Tegeta proposal.

She said her role in procurement put her too low in Eskom's chain of command to have the power to instruct board members to sit and deliberate transactions, saying "that is very unlikely", given the Eskom hierarchy. Ntetha resigned from Eskom in April 2018 to pursue further studies.

The commission will continue hearing Eskom-related evidence until Thursday. 

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