Donwald Pressly joining the dots: Red Herrings, pre-paid at Eskom & ‘Mr Fixit’

Speculation has been rife for some time that Eskom chief executive Brian Molefe is in line to take over from Pravin Gordhan as finance minister. It was understood that Molefe – in in the firing line of the former Public Protector Thuli Madonsela in her State of Capture report for allegedly dodgy deals involving the Gupta family and an Eskom ‘pre-paid’ coal contract – would be brought in as deputy minister first with a view to him replacing the embattled Gordhan. Cape Messenger editor Donwald Pressly writes that Molefe’s jump from top job to top job appears to be a consequence not of his competence but of his political connections. Notably Molefe has not denied that R600 million was “pre-paid” to a Gupta controlled company. Eskom chairman Ben Ngubane – who is under fire in the Madonsela report for not declaring a conflict of interest – says that: “No one should be allowed to tear down this country on the basis of speculation”. Molefe says there has been no “wastage” and was never given a chance to tell his story to Madonsela

By Donwald Pressly*

It is not a surprise to find out that Brian Molefe, who has jumped top job to top job – from head of the Public Investment Corporation to Transnet CEO to Eskom CEO  supposedly as “Mr Fixit” in the Jacob Zuma era of government – received 58 calls from the Guptas in the last year or so – from August 2015 to March 2016.

The good thing about the news about the questionable phone calls is that Molefe’s outing – if it is only for taking calls from nationally discredited people only – is that it will probably have the impact of making him a thoroughly inappropriate person to move into the National Treasury. Madonsela, who completed her term of office at the end of October, appears to have done the nation another favour.

As a watcher of Molefe for some time, I started worrying about his attitude to the public interest in his dealings with those protesting about the appalling treatment meted to members of the two Transnet pension funds. This was of course, while he was still CEO of that enterprise. A little bit of digging about his reign at the Public Investment Corporation – which has subsequently come under fire for its rather lax investments through the Isibaya fund in such things as newspaper groups as part of the PIC’s Government Employees’ Pension Fund management – will probably turn up some questionable deals. But one will, for the purposes of this article, not go there, yet.

Also read: PIC lent R1bn to Iqbal Surve’s Independent

Funny how when one joins the dots, one can understand the bigger picture. Recently Nazeem Howa, the CEO of Oakbay – the holding company of the Gupta’s interests including its ANN7 and the New Age newspaper which has been controversially backed by public enterprises including Eskom  – resigned out of the blue after spending years publicly defending the Gupta family’s interests. He did so to the point that he was red in the face. But suddenly he is gone ‘for health reasons’. Madonsela draws links between Molefe and Howa. He phoned Howa five times during August 2015. Madonsela said these links – between Molefe and Howa and others “cannot be ignored as Mr Molefe did not declare his relationship with the Gupta family”.

Brian Molefe. CEO of Eskom says there is a shebeen in Saxonwold. He suggests that he was not visiting the Gupta family mansion in the suburb.

Madonsela in the State of Capture report says Molefe “is friends with members of the Gupta family. Mr Ajay Gupta admitted during my interview with him on 4 October 2016 that Mr Molefe is his ‘very good friend’ and often visits his home in Saxonwold”. She reports that the New Age newspaper “has also secured contracts with some provincial government departments and state owned entities, most notably Eskom and South African Airways.”

On page 123 of the Madonsela report, she states: “Between 23 March 2016 and 30 April 2016, Ms Ronica Ragavan (acting CEO of Oakbay now) made 11 calls to Mr Molefe and sent 4 test messages to him. Of the calls made, 7 were made between 9 April 2016 and 12 April 2016. This includes on call made on 11 April 2016.”

See page 123 of the report of the Madonsela report referring to the diagram depicting the number of instances placing Molefe within the Saxonwold – the area of the Gupta mansion – area.

For the period 5 August 2015 to 17 November 2015, Molefe “can be placed in the Saxonwold area on 19 occasions”. Madonsela makes the point to – as she explains on page 122 of her report – establish “relationships between individuals as well as potential conflicts of interest”.  To do so she obtained the mobile numbers of Molefe, Aya Gupta, Ronica Ragavan, Nazeem Howa, Rajesh Gupta, Duduzane Zuma (the president’s son), Atul Gupta and the Minister of Mineral Resources Mosebenzi Zwane.

People are ungovernable. Now they say the #SaxonwoldShebeen is a "bring and bribe" setup. 😂😂😂

— Songezo Zibi (@SongezoZibi) November 5, 2016

On page 124 of the report, Madonsela places a diagram to depict “further” instances of contact between Molefe, Howa, Rajesh Kumar Gupta and Atul Gupta.

Public protector adopted an ‘unduly believing mind’

What is important is the time frame of the communication between Molefe and the Guptas. It involves the pre-payment of more than R600 million by Eskom for coal from Tegeta Exploration and Resources. This money is believed to have assisted the Guptas to buy Optimum from Glencore – which previously supplied coal to Eskom.

At a hastily arranged press conference on Thursday, Eskom’s board chairman Ben Ngubane and Molefe, the chairman said: “We commend the public protector on the release of her report, despite the constraints… in the haste of compiling the report, it is clear to the Eskom board that the public protector adopted an unduly believing mind that has led her to make speculative observations  against Eskom without properly  understanding and completing her investigation.”

Ngubane, a former chairman of the embattled South African Broadcasting Board and former Minister of Arts and Culture who crossed the floor from the Inkatha Freedom Party to the ruling African National Congress, “I would like to say this… No one should be allowed to tear down this country on the basis of speculation.”

Molefe said June, July and August, the Gupta company Optimum Coal had supplied the coal to Eskom “in terms of the contract of the pre-payment”. He said further: “The prepayment coal has been delivered. The prepayment debt is settled. I don’t understand what the Public Protector means by wasteful expenditure. It is settled. They do not owe us money from the pre-payment deal.” Notably Molefe did not deny that there had been a pre-payment deal with Tegeta/Optimum Coal: “We did the pre-payment deal… the prepayment deal was done with other companies in the past …However, my gripe with the whole situation is the Public Protector never called me or the CFO (of Eskom) to come and give our version of events. She asked for files.  We gave her 120 files in 13 boxes that had to do with pre-payment and other prepayment of other transactions… 120 files we gave to the Public Protector. She subpoenaed us and we had a date with her to come and … explain what was happening. I would have told her the story if I had been given the opportunity. She didn’t.  She cancelled the meeting. We never appeared in front of the public protector.”

It appears from the report that there are rather close links between Eskom and Duduzane Zuma (president Zuma’s son). Zuma junior is a 45 percent owner of Mabengela Investments (Rajesh Gupta owns 25 percent). Mabengela has a 28.5 percent interest in Tegeta while Oakbay Investments has a 29.05% interest in Tegeta.

Referring to the alleged visits to the Gupta mansion, he said that there was a shebeen in the Saxonwold area. He had not mentioned this as he had “a young wife” who did know of that. Likewise on the highway between Johannesburg and Pretoria, he often passed “uncomfortably close” to Teazers – the strip club… He did not know if the reference to his being in Saxonwold near to the Gupta home was “in the spirit of the constitution”.

The State of Capture report notes that Eskom made a pre-payment to Tegeta for the purchase of coal from Tegeta “in an amount of R586 million and the coal for which the pre-payment was made by Eskom appears to have been or is to be procured from OCM (Optimum) for Tegeta and delivered by OCM to Eskom’s Arnot Power Station.” The deal was approved by a committee of Eskom representatives “at a meeting held at 21h00 on 11 April 2016. This was made on the same day, it is reported, on which a request for bridging finance for the deal was made to “and rejected by the Consortium of Banks”.

Significantly Madonsela says Ngubane does not list himself as a director of Gade Oil in his declaration of interests made on 31 May 2016. The link to the Guptas is indirect, notably. It is a company which Gupta associate Salim Essa was a former director.

• Donwald Pressly, editor Cape Messenger