/ 11 June 2010

The strange case of the resignation that wasn’t

There is something sad about the South Gauteng High Court. The main building is imposing enough, but I guess that too many broken people come through these doors for them to be anything but depressing.

Senior counsel stand in grand splendour as though posing for an oil portrait, but if you look closer you find that their black gowns are invariably crumpled, even worn.

The judges have the authority to jail people forever and to make awards running into billions, but the public toilets leave much to be desired. And we moved three times between courtrooms until one could be found where the equipment for the stenographer was working.

I was there to observe the case of Jacob Maroga versus Eskom, Mpho Mkwana and the public enterprises minister, in which Maroga is claiming R85-million for loss of earnings. Mkwana is Eskom chief executive.

My interest was in part piqued by Eskom’s results published the previous week, where a nifty turnaround was achieved just by getting a new deal from BHP Billiton on the cut-price electricity Eskom has been supplying to its aluminium smelter at Mozal.

The deal reportedly resulted in a R2,2-billion benefit for Eskom. So Eskom is a winner, the losers being BHP Billiton, which owns 47% of Mozal, and the Industrial Development Corporation, which owns 25%, Mozambican interests holding the rest. Note that the state (Eskom) has been supplying electricity at give-away prices (12cents a kilowatt hour) to an entity in which it has a 25% interest (the IDC).

During 2009, tensions between then-Eskom chairperson Bobby Godsell and Maroga, then chief executive officer, grew, with Godsell telling Barbara Hogan, the public enterprises minister, that Maroga had been the cause of him getting shingles.

A key point of tension, reflected in the court papers, was repeated calls by the board, in October 2008 and June and September 2009, for management to meet BHP Billiton to negotiate new prices. You can see from the R2,2-billion saving, announced last week, that there was some urgency to do this.

This is just from the Mozal smelter. Negotiations over BHP Billiton’s other smelters are continuing, as is the case for Anglo American’s Skorpion smelter in Namibia.

Maroga claims he was unfairly dismissed and not warned that his performance was substandard. He was even given a 70% performance appraisal by Godsell, his performance being good enough to get him a bonus of R2,2-million. He wants his job back and an apology.

Eskom says that Maroga quit. He offered to resign, as did Godsell, at a board meeting. The two recused themselves, the board deliberated and decided to accept Maroga’s resignation. It sent two board members as emissaries to a dinner with Maroga and Godsell at the Sandton Sun, where the acceptance of Maroga’s resignation was communicated. Maroga, says Eskom, did not demur, but indicated he would participate in the exit process.

But, according to Eskom, Maroga had a change of heart and instead announced that he had not resigned.

Judgment was reserved.