The Zondo Commission of Inquiry recently heard how former Minister of Public Enterprises Lynne Brown gave a directive to have then Eskom Financial Director Tsholofelo Molefe suspended. But the plot thickened when it became clear that the FD was not supposed to be on a list of three Eskom executives facing suspension – CEO Tshediso Matona, head of Commercial and Technology Matshela Koko and head of Group Capital Dan Marokane. Even Eskom board chairperson Zola Tsotsi was unsure why Molefe was being suspended, and best he could offer was to say ‘the FD’s position was different’. The answer to the shenanigans around Molefe were closely tied to another dynamic, that of Brown’s advisor Salim Essa and his introduction to Suzanne Daniels, former head of Legal and Compliance. Evidence at the commission showed that confidential information concerning Eskom was making its way to outside people, with the hand of Essa featuring prominently. – Derek Alberts
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On 11 March 2015, all four executives were suspended with full pay pending the investigation. The executives were cleared of any wrongdoing once the investigation was completed.
The twist: Someone had knowledge of who will be suspended
A day before the suspension, Koko and other people outside of Eskom may have known what was going to happen on 11 March 2015. Koko called a meeting with Daniels at Melrose Arch, and Essa was also in this meeting. Daniels told the Commission that Essa introduced himself as an ‘advisor to the former Minister.’
DCJ highlights that Dr Ngubani said he’s not sure whether at the meeting of the 9th March 2015 that Mr Tsotsi had pushed for the suspension of the executives.#StateCaptureInquiry
— State Capture Commission (@StateCaptureCom) October 13, 2020
He then asked her what the procedure was at Eskom to suspend executives. Essa proceeded to tell her of the executives who will be suspended. Already, there was a fourth name, that of Tsholofelo Molefe who was the financial director at the time.
When Brown met with the board the next day, what she said confirmed the previous day’s outcomes. She talked about portfolios to be investigated, and for the first time, finance was mentioned. Mention of the finance portfolio was not part of a previous discussion, understood to be at a meeting at former president Jacob Zuma’s house in Nkandla, about the suspension of the executives.
Furthermore, Essa said there would be an independent firm to investigate Eskom’s affairs. The next day, legal firm Dentons was appointed as the investigator. Prior to this, Molefe together with then former acting CEO Colin Matjila had met with Essa. The meeting supposedly didn’t go according to Essa’s plan, as Molefe didn’t agree with what was said. Molefe’s attitude might well have persuaded Essa to get rid of Molefe, according to Adv Seleka during Daniel’s evidence to the commission.
Dr Ngubane told the Commission that Brown didn’t mention any names, but areas to be investigated. “She had raised concerns that having the executives around would hinder the investigation.”
Inquiry into Eskom status quo
In 2015, Eskom had launched an inquiry into the company’s status quo. The utility’s senior executives occupying strategic positions within Eskom at the time were ‘asked to step aside’. Executives would then return after three months, ostensibly not to interfere with the investigation.
Ngubane says it was suggested that the executives should step aside for a period of three months rather than being suspended.#StateCaptureInquiry
— State Capture Commission (@StateCaptureCom) October 13, 2020
The investigation was looking into portfolios headed by the executives, but the individuals themselves were not being investigated. Key issues included cash constraints, an aging fleet of power stations, rapid increase of electricity prices, flawed maintenance and over-burden on the energy systems.
Strange events within Eskom
“A lot of strange things were happening at Eskom,” said Dr Ngubane. He pointed to lack of trust among the board and people at Eskom as described in leaked statements. Other unorthodox events included the appointment of Dentons.
“Dentons was disqualified twice by the Audit & Risk Committee. In the end, Denton got the job on a three-months contract. Work was halted six or seven weeks into the investigation since nothing new emerged,” said Dr Ngubane.
He said despite Eskom not having a budget for the investigation, the power utility went ahead with the probe. For its work over a few weeks, Dentons was paid R20 million. This was for completing the first order of the investigation, and they wanted more money for the next phase. Eskom executives knew of these problems, and what was needed was a solution, not someone to identify the issues. Ngubane said the board was well aware of a turn-around strategy to address the issues raised by Dentons, but was ignored.
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The commission was puzzled why work was undertaken without a budget, only to be halted citing rising costs. It also asked how the investigation came about and whether it was engineered as an excuse to suspend the executives.
The commission was told that settlements with some of the executives were far more than what was agreed on initially. At the end of the investigation, no wrongdoing was found on the part of the executives. Of the executives, only Koko and Molefe – whose request for more money was approved by the board – returned to Eskom.
In response to this, Dr Ngubane said: “Eskom does that. During my time at Eskom, two people were paid a lot of money when they left.” He signed the settlement agreement of both Molefe and Morakane.
“Our board had good intentions. Costs were reduced, as was loadshedding,” Dr Ngubane said.
“We also managed to sell power to neighbouring countries.”
