More allegations regarding the influence of the Gupta family have emerged, this time with former Eskom chairperson Zola Tsotsi claiming he was kicked out of the power utility after he refused to bow to the politically connected family’s demands.
In an interview with the Mail & Guardian on Thursday, Tsotsi claimed the Guptas accused him of channelling business to people who were hostile towards President Jacob Zuma.
The Guptas, Tsotsi said, had initially made sure he served a second term as chair of Eskom.
“When I was proposed for re-appointment for the second term, one of the Guptas simply called me and told me they will support my appointment and that without their support it will not happen. Two months after the appointment, they called me and said they will have me fired because I am not playing the game. I was forced to resign shortly after that,” said Tsotsi.
Earlier this year, Tsotsi escaped a motion of no confidence by fellow board members at Eskom after he was accused of interfering with the executive and signing off certain documents on behalf of Eskom, undermining the chief executive and other executive directors. Tsotsi stepped down after convincing the board to put off the motion of no confidence.
But this week Tsotsi told the M&G his axing from the power utility was orchestrated by the Guptas. He said the Guptas told him directly that they wanted him out because he was “not playing the game”.
“They wanted to supply gas through Eskom units in the Western Cape. The units were supposed to produce gas. They [the Guptas] wanted exclusivity. But others [businesses] had already signed memoranda of understanding with Eskom. I said to them I can’t change that … That’s when they told me I don’t support them,” said Tsotsi.
In an energy supply crunch, Eskom runs costly open-cycle gas turbines, which devour diesel at a rapid rate. To keep the lights on the utility has often run the turbines for extended periods, resulting in substantial costs it had not planned for.
Early last year, the utility said it was spending R1-billion a month on diesel costs. This cost featured prominently in Eskom’s reasoning when it asked the National Energy Regulator for a electricity tariff increase. In early March it was granted a 9.4% tariff hike.
Plans to convert the turbines to also use gas have been in the pipeline for years, but have not materialised.
Eskom spokesperson Khulu Phasiwe said the power utility did not have any knowledge of the allegations made by Tsotsi.
Tsotsi became the third prominent individual to speak out against the conduct of the Guptas this week after Deputy Finance Minister Mcebisi Jonas and former ANC MP Vytjie Mentor said they were offered ministerial positions by the Guptas.
The powerful family is also said to have influenced the appointment of board members and senior officials in state-owned enterprises including Eskom, Transnet and Denel.
Eskom chief executive Brian Molefe this week denied the Guptas had influenced his appointment. Relations between Molefe and the Guptas date from when he headed the Public Investment Corporation and Transnet. Under Molefe, the family scored multimillion-rand contracts for its New Age breakfast briefings. Molefe did, however, admit visiting the Gupta family at their offices and their home in Saxonwold, even though this did not happen often.
Eskom is reportedly buying coal for its Arnot power plant from Optimum Coal, a mine that is in the process of being bought by a Gupta-linked company after a contract with Exxaro Resources was cancelled. The power utility did not renew Exxaro’s contract to supply Arnot from a nearby mine last year because it said prices were too high. Arnot, according to Business Day, was supplying 20% of the 2 000MW power plant’s coal needs, according to the utility.
Eskom board member Romeo Kumalo also dismissed suggestions that linked him to the Guptas family. “I have no business dealings whatsoever with the Gupta family. I was appointed to the Eskom board directly by the minister of DPE [department of public enterprises].”
The public enterprises department has denied any knowledge of board members and senior officials in state-owned entities being appointed by the Guptas.
“Board members are appointed for a period of three years, subject to an annual review … Cabinet has picked up certain deficiencies and inconsistencies in the methodology used by various shareholder departments and has requested a review of the board appointment process to improve the process. Government, through the interministerial committee led by the deputy president, is in the process of developing a set of common principles for all government departments in this regard,” the department said.
Denel chairperson Daniel Mantsha and board member Thamsanqa Msomi have also been implicated by two highly placed sources as being among the senior public officials who are close to the Gupta family.
Mantsha, who is also a legal adviser to Home Affairs Minister Malusi Gigaba, referred questions to the department of public enterprises.
Mantsha started working with Gigaba while he was still minister of public enterprises, which oversees Denel. Msomi, who is also a special adviser to Communications Minister Faith Muthambi, said he was not aware of claims that his appointment may have been influenced by the Gupta family, nor of any links between those who approached him to serve on the Denel board and the controversial family.
He said he had met with a member of this family “once or twice”, but that this was during his previous job as public enterprises chief of staff.
“I met many people, including businesspeople, most of whom wanted to meet with [the] minister on a number of issues. Some … I met at different functions organised by the department or stakeholders. So I did once or twice meet a member of this family in one of the functions and it was in the the New Age breakfast hosted by the SABC. All we did was to just greet and brief introduction. So yes, that’s how I know them,” he said.
Msomi said he has not met with any of the Guptas since his appointment to the Denel board.
The Guptas responded to questions on Thursday, saying they did not supply gas or own any gas business, and dismissed the allegations as “nothing more than political gossip and innuendo”.