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Embattled Eskom brushes off Trillian report amid fresh Papa Molefe debacle

This week’s bombshell report by investigative journalism unit amaBhungane about new allegations around Brian Molefe has set the cat among the pigeons. Earlier this week, amaBhungane reported how former mining minister Ngoako Ramatlhodi has accused now-returning Eskom CEO Brian Molefe and the utility’s chair Ben Ngubane of trying to strong-arm him into helping the Guptas takeover Glencore’s coal mine Optimum. Digging deeper into this mess, the report further links to the allegation that Trillian helped the Guptas pay for Optimum. Eskom denies this. The Gupta-linked Trillian, meanwhile, shortly hogged the headlines last year when its chair Tokyo Sexwale tried to launch a probe into allegations that Trillian execs knew about Nhlanhla Nene’s axing before it happened. That probe seems to have gone nowhere, resulting in the dark cloud hanging over the company becoming bigger. – Gareth van Zyl

By Matthew le Cordeur, Fin24

Cape Town – Eskom on Thursday denied paying Gupta-linked Trillian in 2016, after a report alleged payments to the firm were used by Gupta-owned Tegeta to buy Optimum coal mine for R2.15bn.

Eskom spokesperson Khulu Phasiwe told Fin24 on Thursday that while Trillian was listed as a supplier of Eskom in 2016, the power utility has no record of paying any money as no services were used.

An electricity pylon stands beyond an Eskom sign at the entrance to the Grootvlei power station, operated by Eskom Holdings SOC Ltd. Photographer: Dean Hutton/Bloomberg

As part of a series by amaBhungane, the investigative unit is digging deeper into the basis of the public protector’s State of Capture report in 2016, providing new allegations that – if found to be true – could link the dots to prove that the state (through Eskom executives or government officials) and the Guptas conspired to take over Optimum from Glencore.

On Monday, amaBhungane revealed how former mining minister Ngoako Ramatlhodi claimed Eskom CEO Brian Molefe and chairperson Ben Ngubane pressured him to help the Guptas take over Glencore’s coal mine in 2016.

Public Enterprises minister Lynne Brown

Their latest expose claims that Public Enterprises Minister Lynne Brown misled Parliament in December 2016 by stating that no contracts had been concluded between Trillian and Eskom.

The report says Trillian, which is owned by Gupta associate Salim Essa (who has a 21.5% stake in Tegeta), invoiced Eskom for R266m at the time of Brown’s submission and then invoiced it for a further R153m after the submission.

This links to the allegation that Trillian helped the Guptas pay for Optimum coal mine, after they were allegedly short of cash to buy the mine.

The State of Capture report states that Trillian “contributed to the purchase price of OCH (Optimum)”, adding that Trillian and its subsidiaries put R235.4m into a Tegeta account in the Bank of Beroda, which was then used for the purchase. Trillian denies this occurred.

READ: Sexwale investigation into Trillian Gupta-Nenegate claims hits dead end

“AmaBhungane has confirmed that Trillian companies invoiced Eskom a total of about R419m between April and December 2016,” it reported on Thursday, listing the following, which allegedly occurred during Eskom CEO Brian Molefe’s time:

  • 14 April: R30.7m for work on Eskom’s corporate plan
  • 10 August: R113.3m for management consulting
  • 10 August: R122.2m for financial advisory services
  • 14 December: R152.8m for management consulting.

However, Phasiwe told Fin24 on Thursday that while Trillian was listed as a supplier, the work “never materialised”.

“The board wanted someone to assist them with the turnaround of the company,” he said. “Eskom then started doing something right and our finances started to improve. The board then decided we didn’t need their services.”

READ: How Eric Wood, Trillian CEO, “laundered” Gupta millions

In an official Eskom statement, Phasiwe submitted the following to Fin24 on Thursday:

“We would like to state categorically that Eskom has no contracts in place with Trillian Capital Partners and/or associated companies.

“When the current Board was appointed in December 2014, Eskom was facing challenges at both operational and financial levels. This period was plagued by capacity constraints, delays in the new build programme and the associated cost overruns, and load shedding.

“Pursuant to this, in June 2015 the Board gave the mandate to negotiate a risk-based contract with McKinsey, covering the main risk areas of the turnaround strategy.

“In addition to the turnaround initiatives adopted by the Board, Eskom was faced with other pressing challenges namely, an unfavourable Nersa decision on Eskom’s selective reopener tariff application, fulfilling equity injection conditions set by the National Treasury, and imminent credit rating reviews by ratings agencies.

READ: Trillian, Eskom and the Guptas – why all the fuss?

“This required Eskom to engage with a wide variety of service providers to mitigate against these risks with a sense of urgency. These service providers included Deloitte Consulting, Barclays, McKinsey, Citibank and Trillian.

“There is currently no master services (MSA) agreement in effect with Mckinsey, Regiments or Trillian. In June 2015 the Eskom Board approved a mandate to negotiate a MSA to help the company address operational and financial challenges that the company had to deal with.

Trillian Capital Partners screenshot

“The proposed agreement was to be linked explicitly to benefits derived by Eskom, meaning that if no benefits were derived for Eskom no payment would be made.

“However, the Eskom Board decided in June 2016 not to proceed with the MSA. All required governance processes were followed in this process, including a review by Eskom’s external auditors.”

President Jacob Zuma has put the State of Capture report on review in the North Gauteng High Court, after the public protector recommended he launch a judicial commission of inquiry in the above state of affairs.

While Eskom wants to clear its name on the allegations, it said this week that it is tied to this process, which leaves the allegations in limbo.

Source: http://www.fin24.com/Economy/Eskom/eskom-claims-it-didnt-pay-gupta-linked-trillian-a-cent-20170518

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