Molefe: Air state-tender issue

Popo Molefe, a trustee of African National Congress (ANC) funding vehicle Chancellor House, conceded this week that the issue of the ruling party benefiting from state contracts needed to be debated.

The Mail & Guardian revealed last week that Chancellor House Holdings, a company set up by the ANC to seek profits on its behalf, would benefit from one of South Africa’s largest state tenders yet.

State-owned Eskom this month awarded a R20-billion contract for steam generators to Hitachi Power Europe and its local subsidiary, Hitachi Power Africa. Chancellor House co-owns Hitachi Power Africa, giving it a R3-billion stake in the contract.

Molefe, a member of the ANC national executive committee, and businesswoman Salukazi Dakile-Hlongwane are trustees of the Chancellor House Trust, which holds all the shares in Chancellor House Holdings. In theory they have the discretion to donate dividends to a range of causes, but in fact the sole intended beneficiary is the ANC.

By the time of going to press, Eskom had not replied to detailed questions, submitted by the M&G more than a week ago, about the tender process.

The M&G last week highlighted that the ANC as ruling party was ‘both player and referee” when it benefited from state contracts.

It also raised further apparent conflicts of interest: Molefe is a close business partner of Eskom board chairman Valli Moosa, and Dakile-Hlongwane was listed as a director of Eskom Enterprises, the Eskom unit responsible for the tender.

Dakile-Hlongwane denied a conflict on her part, saying the Eskom Enterprises board, on which she used to serve, was dissolved by 2004. This preceded the tender call last year.

Although electronic company registration records do not reflect the board’s dissolution, Eskom backed Dakile-Hlongwane’s version, saying she ‘is not a member of Eskom nor the Eskom Enterprises board”. Eskom did not reply to a follow-up question asking when her last board meeting was.

Molefe also denied a conflict of interest, saying that as a trustee he was not directly involved with Chancellor House Holdings. He said he had not discussed the Eskom tender with Chancellor House’s directors, having first learnt of the company’s stake in it from the M&G.

Molefe also claimed his relationship with Moosa, was limited to their joint company, Lereko Investments. ‘I do not talk to him about Eskom tenders.”

Molefe conceded that Moosa would have known of his involvement with the Chancellor House Trust, meaning factors to take into account were ‘whether [Moosa] got involved in the adjudication process” at Eskom and, on the flip side, that ‘I assume he would know that as a trustee I’m not involved in the daily affairs of the company.”

The Eskom board was directly involved in the tender, including a decision it took to double its size midway through and its endorsement of the outcome. Moosa did not respond to messages seeking comment on his own apparent conflict.

Molefe would not respond to earlier comments by ANC secretary general Kgalema Motlanthe that ANC investment vehicles should stay ‘out of government procurement”. But he said the issue should be debated ‘within the ANC and in public — We need to say we have put in place legislation, systems [and] we need to say are these systems adequate to deal with perceptions that arise should certain things happen.”