More skeletons roll out of Eskom’s corrupted cupboard

JOHANNESBURG — The Commission of Inquiry into State Capture is proving to be an eye-opening series of bombshell disclosures. Case in point is the latest incredible information disclosed by Eskom middle manager Snehal Nagar, who is an accountant in the primary energy division. Following orders from a corrupted top management team and a dodgy board, Nagar was pressurised into ensuring that Eskom paid R659m to Gupta-owned Tegeta Exploration within 82 minutes. Nagar was forced to skirt every single rule and internal process in making this transaction happen, highlighting how the frenzy of state capture under the Zuptoids aggressively gobbled up and wasted taxpayers’ money at high velocity. This article below was first published on Daily Maverick. – Gareth van Zyl

By Jessica Bezuidenhout

Snehal Nagar, an Eskom accountant in the primary energy division, told the State Capture Commission on Tuesday how the entire process of securing the pre-payment for the Guptas had seemingly been done to “fool” the system.

Nagar is testifying to the controversial pre-payment for coal and the equally questionable circumstances around which Eskom had issued an Absa bank guarantee to further aid their acquisition of Optimum.

This pre-payment contract, signed by former CFO, Anoj Singh and former head of generation, Matshela Koko, has been the subject of several investigations.

Nagar said they were instructed to make the urgent payment on 13 April 2016 – first when Maya Bhana-Naidoo, a manager in Singh’s office, called him around 10 or 11am that day and later, when she sent him a formal instruction at 12.38pm with some supporting documents to trigger the payment.

Nagar said that while a contract was in fact presented for prepayment, there was simply not enough time to execute the payment because the contract had not been loaded on to the Eskom system.

This is a lengthy process involving five layers of staff and a process that would have entailed the creation of a purchase request through to a contract number.

“There was no time to follow the process usually required,” Nagar said.

As a result, the finance team amended an existing purchase order attached to a Brakfontein contract to make the payment.

Then, once the full internal processes had been resolved, the Brakfontein purchase order was reversed.

Asked by Justice Raymond Zondo whether the use of the Brakfontein contract was normal or acceptable, Nagar said this was not the correct way of doing things.

He agreed that the staff had resorted to this measure to ensure that the payment was done as per the instruction.

Leading his evidence, the Commission’s senior advocate Phillip Mokoena asked him why there had been such extreme pressure or rush for the payment, and why it had to be done outside of the rules.

Said Nagar: “There was a contract approved by the Board Tender Committee. There was an instruction from the CFO’s office requesting payment before 2pm.” This he said, they considered as a request from one of the highest offices in Eskom.

“Yes, I accept, the incorrect process was followed to make the payment, but we did get approval for that.”

This, he said, was obtained from Bhana-Naidoo.

He said a payment control form, required to regularise the irregular payment to Tegeta, had been signed off by Bhana-Naidoo.

The payment was all done and dusted by the time Nagar returned to the office later that day.

In total, he said, Tegeta was paid R728-million as it included payment of two other invoices as had been requested by Bhana-Naidoo.

“This was an unusual payment, firstly because we don’t normally pay for coal upfront.”

Secondly, Nagar said, the timing – to have this contract and payment done and all the required processes – within two hours, that too was unusual.

In addition, Nagar said, a pre-payment creates an additional credit risk to Eskom in the event of non-delivery.

“Yes, it was covered by a cession of shares as a guarantee, but why would I want shares in a company that can’t pay?”

Nagar, questioned about why Eskom staff would have executed this transaction despite being aware that it was irregular, said: “Yes, it was certainly startling. But this was an instruction from the board.”

And defying orders at Eskom, said Nagar, is “ugly”.