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‘Former Eskom director only left after first denying conflict of interest’ — Mabuza

Former Eskom board member George Sebulela twice denied his relationship with IT giant EOH which was vying for a multibillion-rand contract with the power utility, the Zondo commission of inquiry into state capture heard on Friday.

Sebulela resigned in October last year after Eskom’s board received a legal opinion relating to his undeclared interest in the tender. At the time, Sebulela refused to be drawn on speculation that he had initially refused to resign.

But on Friday, Eskom board chair Jabu Mabuza told the commission — chaired by Deputy Chief Justice Raymond Zondo — that Sebulela on two occasions denied that he was conflicted when confronted.

“He said: ‘No I don’t know about this’,” Mabuza said of Sebulela’s response to questions about his relationship with EOH.

Sebtech, Sebulela’s company, is a supplier and development partner to EOH.

Mabuza said that the board would not have known about the conflict of interest had EOH not declared, via Eskom’s normal declaration processes, Sebulela’s directorship on the sub-contracting entity. “If the tenderer did not disclose, we would not have known about it,” Mabuza said.

Sebulela’s subcontracting relationship with EOH had existed long before he joined the board, Mabuza noted.

READ MORE: Eskom board member resigns over conflict of interest in ICT contract

According to Mabuza, once the media had picked up on the conflict of interest, he was forced to draft a resignation letter for Sebulela by text message.

Sebulela eventually relented, agreeing to resign. According to Mabuza, Sebulela said: “In the interest of clean corporate governance, I will leave.”

At the time of his resignation Sebulela said his resignation was in the interest of Eskom and that the board had collectively agreed that issues of conflict would not be tolerated.

Sebulela was one of eight new board members announced by the power utility in January 2018. EOH had submitted its bid about four months before Sebulela’s appointment to the board.

Evidence leader Vincent Maleka SC probed Mabuza about the apparent weaknesses in Eskom’s declaration system.

But Mabuza explained that the responsibility of declaring interests lies with the conflicted party.

“It is highly unlikely that the process can pick up something that is not available,” Mabuza said.

“If I know that I occupy a position like I do at Eskom and there is a certain behaviour that is expected of me … So the issue of declarations of conflict first have to come from the interested officer. So in this particular instance, I don’t know how else the officers would have found out that he did not declare,” he added.

At the start of his testimony on Friday, Mabuza was at pains to explain the steps he took to ensure he was not conflicted upon being offered the job as Eskom’s board chair.

“If there is a flaw, I would say it would be that George should have declared more,” Mabuza said.

Sebulela told the Mail & Guardian on Friday that he initially denied knowing anything about the conflict of interest because the matter was only brought to him months after his links to EOH were known to Eskom.

It is understood EOH submitted a bid for the work in 2017, several months before Sebulela was appointed to the board, and that once he was appointed it had notified Eskom that he was a sub-contractor.

Sebulela said he felt the fact that the delay in raising the conflict of interest was strange. “I volunteered to resign because I could see there was something fishy going on,” he said.

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Sarah Smit
Sarah Smit
Sarah Smit is a general news reporter at the Mail & Guardian. She covers topics relating to labour, corruption and the law.

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