EXCLUSIVE: Brown says she never saw Molefe's pension letter

Public Enterprise Minister Lynne Brown during a meeting with Parliament’s Standing Committee on Public Accounts on May 30, 2017. (Gallo Images / Sowetan / Esa Alexander)
Public Enterprise Minister Lynne Brown during a meeting with Parliament’s Standing Committee on Public Accounts on May 30, 2017. (Gallo Images / Sowetan / Esa Alexander)

Johannesburg - Public Enterprises Minister Lynne Brown has said a letter written in November 2015 that set out former Eskom boss Brian Molefe's controversial pension package never reached her.  

In her latest affidavit filed Monday ahead of the upcoming court case into Molefe's R30m pension payout, Brown also called the resolution passed by an Eskom committee in February 2016 to amend Molefe’s contract of employment and increased his salary "bizarre". 

She said the resolution meeting took place without her being consulted.

Brown also contended that, as Molefe had resigned from the power utility, his “so-called early retirement and reinstatement agreements” were null and void.

Molefe’s case is set to be heard in Pretoria’s North Gauteng High Court over three days starting on November 29.

The former Eskom boss was taken to court by trade union Solidarity, the DA and the EFF, who want his R30.1m pension payout in 2017 ruled unlawful and set aside.

Brown, a respondent in the case, has said she would abide by the decision of the court and would not oppose the relief sought.

Pension package payouts 

In an earlier affidavit filed by Brown she stated she only became aware of Molefe's generous pension package at a meeting held with the Eskom board on April 19 2017.

This followed reports in the Sunday Times that Molefe was to be paid a R30m pension package. She said in her earlier affidavit she knew nothing of the pay-out because it was “an operational issue.”

Brown's latest affidavit does deal with the controversial letter from former Eskom chairperson Dr Ben Ngubane, which, if she did receive it, would imply she was aware of the an arrangement for Molefe's pension pay-out. 

But Brown contends she never received the two-page letter. 

The Daily Maverick earlier reported that an email trail showed that the document was sent to three people in Brown’s office: the Department of Public Enterprises registry officer, the department’s chief director of governance and Kim Davids, Brown’s former personal assistant.

Molefe started working at Eskom on 16 October 2015 and spent around 16 months at the power utility, before tearfully resigning in December 2016 after being implicated in the Public Protector’s state of capture report.

Brown said that Molefe started working at Eskom on terms that stated a fixed term contract of employment would be concluded. 

The November 2015 pension letter

But on November 25, 2015, two weeks after Molefe had signed his appointment letter and two months after his employment at Eskom commenced, Ngubane wrote to the minister requesting her approval of the agreement that would boost his pension payout.

The letter was later upheld as proof that that Brown was aware of Molefe’s retirement. But Brown argued in her affidavit she never had sight of the letter.  

“In the meanwhile on 15 November 2015 the board addressed a letter to the minister in which it proposed a pension arrangement for Molefe different from that captured in the letter of appointment,” Brown stated.

“It proposed that Molefe be allowed to retire at the end of his five-year fixed-term contract as if he had reached the age of 63 years ‘regardless of Mr Molefe’s age’ and that any penalties that the Pension imposed by carried by Eskom,” said Brown in her affidavit. 

“The letter did not reach the minister.”

Molefe’s “bizarre” resolution

Brown said in court papers that, on February 9 2016, the Eskom board, as well as the state utility’s People & Governance Committee convened to consider Molefe’s pension package.

She said the meeting proceeded without waiting for a response from her. 

The meeting resolved that, if executives directors were to take early retirement - and where they hadn't yet worked for ten years, Eskom would bridge the gap to make up the 10 years service.

The power utility would also waive penalties for early retirement, and would pay to the pension fund the costs of the deemed additional service, plus penalties.

Brown said this “bizarre” resolution later popped up during Molefe’s resignation.

The Public Protector’s State Capture report was published on November 2, and the following day an emotional Molefe stepped down.

The public enterprises minister said that on November 8 or 9 Molefe had met with her and informed her of his decision to step down. She said she understood “from what Molefe explained to her that he was resigning.”

But said she Molefe never advised her that he had in fact applied for early retirement.

Eskom and Molefe in their affidavits said Molefe had written to Ngubane on on 11 November - [more than a week after he announced he would step down -  and requested approval for retirement.

The board approved Molefe’s request for early retirement on 21 November.

Brown stated that when she became aware of the pension payout arrangement in April after the Sunday Times article, she “expressed her disagreement with the arrangement and instructed the board to propose a more palatable solution.”


Brian Molefe breaks down during his media address on the State of Capture report (Leon Sadiki)

On 3 May 2017 Molefe was informed the early retirement agreement could not be implemented, and was to be rescinded.

Eskom then called on Molefe to resume his position, despite not discussing the option with Brown, she said.

Only a week later four proposals were put to her, with the preference of Molefe’s return, the so-called “reinstatement agreement”.

Brown said she at first expressed her satisfaction, but “after further investigation  of the matter, the minister took the view that the reinstatement was irregular.”

Brown said she concluded that Molefe voluntarily resigned and that the early retirement agreement was a “common error," and that he had no case as a result. 

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