Anoj Singh in the hot seat over McKinsey, Lynne Brown meetings before joining Eskom

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Anoj Singh, voormalige finansiële hoof van Eskom en Transnet. Foto: Argief
Anoj Singh, voormalige finansiële hoof van Eskom en Transnet. Foto: Argief
  • Former Eskom CFO Anoj Singh said he met with management consulting firm McKinsey after his secondment to get the company's perspective on the state of Eskom.
  • He said the state of clarity Eskom was providing on its borrowing ahead of his arrival was concerning.
  • He stated that meetings with former minister of public enterprises Lynne Brown were not negotiations, but part of an "on-boarding" process.

The Judicial Commission of Inquiry into State Capture, chaired by Deputy Chief Justice Raymond Zondo, grilled former Eskom chief financial officer (CFO) Anoj Singh about meetings he held with management consulting firm McKinsey and former minister of public enterprises Lynne Brown at the time he was seconded for the position.

Eskom's dealings with McKinsey have become a prominent subject of scrutiny following the years of state capture. Among other things, it involves a R1.8 billion payment to McKinsey and Trillian Capital, which Eskom whistleblower Suzanne Daniels told the commission on Wednesday took place with no contract in place.

In 2018, the National Prosecuting Authority (NPA) concluded that these payments were criminal, consisting of crimes including fraud, theft, corruption and money laundering, Fin24 reported. 

The payments were also a deliberate and fraudulent circumvention of Eskom's supply management processes, the NPA said. 

Singh appeared before the commission on Thursday morning to give evidence on his role at the embattled power utility. Evidence leader Advocate Pule Seleka asked Singh about meetings he had with McKinsey ahead of assuming his position at Eskom in 2015.

Singh said he had discussions with McKinsey to get a sense of how it understood the situation at Eskom to aid him in his work when he finally began his tenure at the power utility. Singh was eventually placed on suspension and later resigned from the position.

Zondo further asked: "If you were called by a potential service provider to Eskom at a time where you weren't part of the company were about to be seconded, I would assume you would insist that the person occupying the position you were seconded to would be there?" 

Purpose of meeting was 'on-boarding'

"I think the purpose of the sessions described were on-boarding, to the extent that the sessions were McKinsey's view of the world in terms of what they believed needed to be done. That was really to provide information about the environment I was going into," Singh replied.

Singh said at the time he wanted to get a clear indication from someone outside of Eskom as oppose to broad accounts from the power utility itself on the challenges it faced.

"The issue of Eskom being in a liquidity crisis we tried to understand why that was the case. If you went to Eskom to ask them why they were in this position and they would give up to 300 reasons.

"Some might be legitimate, and some might not be legitimate. But if you asked an outsider you got a crisp explanation," Singh said.

Singh said he found the accounts for Eskom's borrowing to be unclear and nondescript, indicating that Eskom was facing considerable financial challenges.

"The funding plan prepared for that year - [and a] R300 billion borrowing plan - was all of three pages. That was the type of environment that was there at the time. In order for us to get to the bottom of the state of Eskom would have taken us a month of Sundays," he said.

When Seleka and Zondo asked Singh about a meeting with Brown about his secondment, he said there was no "negotiation" that took place about his appointment, but that these meetings were also merely about "on-boarding" him.

"These were not negotiations. This was merely an on-boarding session. When I approached the subject around the meetings, it was about the current state of Eskom, the issues and Eskom and possible solutions," he said.
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