/ 31 May 2017

It’s decided – Eskom will annul Molefe’s appointment, says Brown

Public Enterprises Minister Lynne Brown.
Public Enterprises Minister Lynne Brown.

Public Enterprises Minister Lynne Brown has instructed the Eskom board to rescind the re-appointment of Brian Molefe as chief executive.

The inter-ministerial committee (IMC), tasked with investigating his return to Eskom, recommended that Brown instruct the power utility’s board to reverse Molefe’s reinstatement.

Justice Minister Michael Masutha, who led the IMC, made the announcement on Wednesday during a press briefing at Parliament.

“The IMC is of the view that it would be in best interests of government, Eskom and the country as whole that the minister of public enterprises directs the board to rescind the decision to reinstate Mr Molefe as group chief executive,” Masutha said.

During the course of a meeting between the Eskom board and the IMC, Brown, who is a member of the committee, instructed the board to rescind Molefe’s reinstatement. 

A replacement for Molefe is set to be appointed in the next two days.

“Due process must be followed in the filling of the role of group chief executive,” Brown said. “The board must provide me with at least two names from within the executive to act as GCE and I intend to appoint the next acting GCE within the next 48 hours to ensure continuity.”

Masutha said the IMC met the Eskom board during its investigation into Molefe’s return as Eskom chief executive.

 It heard that the board had used incorrect provisions of laws governing pension payouts to agree to pay Molefe an early payout of R30-million. Once the board realised its error they decided to reinstate Molefe.

The early pension agreement – which stated Molefe could retire at the age of 50 – was against Eskom’s own internal governing policies.

According to Masutha, Brown knew nothing of the circumstances surrounding Molefe’s reappointment. He concluded that the IMC said Brown should have been party to these agreements as per a Memorandum of Incorporation (MOI) established in 2016.

“On 11 May 2017, the board concluded a reinstatement [agreement] without the minister being party to it, as prescribed in the MOI. Although the matter is still to be adjudicated by the courts, the view of the IMC is that this new contract and that the minister should have been cited as a party in compliance with the 2016 MOI,” Masutha said.

The IMC found that the Eskom board treated Molefe’s resignation as unpaid leave after it realised that it could not fulfil its agreement to proceed with an early pension payout. This is despite Molefe’s appointment to Parliament as an ANC MP during his time away from Eskom.

In its announcement on Wednesday, the IMC strongly rebuked the Eskom board for not correcting an “administrative error” with regard to the mistaken provisions for early retirement, and instead reinstating Molefe.

The IMC concluded its statement by saying it welcomed Brown’s announcement that she will deal with controversies linked to the Eskom board at its annual general meeting on June 23.