/ 29 July 2018

Treasury confirmation — Eskom looting was an inside job

If Eskom isn’t an exemplary case of “failure”
(Graphic: John McCann/M&G)

The noose is tightening around senior Eskom officials already implicated in looting with further evidence of the underhanded tactics used to benefit the infamous Gupta family, revealed on Sunday.

A new treasury report includes how former executive for generation Matshela Koko, and power utility’s former acting head for fuel sourcing Ayanda Nteta, worked overtime to benefit the Gupta family and prejudice Eskom.

The senior staffers allegedly reviewed and fixed proposal documents for Tegeta that would later be sent to Eskom for a coal delivery pre-payment of more than R600 million. The report also found that Koko intervened and intimidated officials when Gupta-owned coal mined by Tegeta Exploration and Resources to Eskom was found to be sub-standard. Koko has consistently denied these accusations. 

The R600-million pre-payment was paid just three days after a late night special board tender committee resolution to pay it. This money was found to have aided the Guptas purchase of Optimum Coal Mine.

Without the 9pm resolution the infamous Saxonwold family, which had been denied loans by banks just hours before, would have missed the deadline to deposit the R 2.1-billion required to conclude the transaction.

The revelations are contained in a near 500 page draft forensic report by national treasury into the capture of Eskom and Transnet by the Gupta family and associates.

Treasury on Sunday confirmed receiving the draft report and set affected parties a deadline of two weeks to respond. It added it would make the report public once it has reviewed all responses.

This latest leg of the investigations, done by investigators from Fundudzi Forensic Services, go to the heart of operations with investigators having mirrored laptops and devices of key lieutenants in former Transnet and Eskom chief financial officer Anoj Singh, former Transnet and Eskom chief executive Brian Molefe, Koko, former Eskom board chair Ben Ngubane, Nteta, and former company secretary Suzanne Daniels.

Among others, these mirrors showed that Singh – into whose bank account R16 million was deposited in the space of a month – was requested between 2015 and 2016 to make various deposits into local and international accounts by Molefe and Ngubane.

Little has been established as to the purpose of the accounts as well as the individuals and businesses behind them, but they will be handed over to the Hawks for further investigation, the report stated.

With regards to the Gupta family’s coal dealings with Eskom the report reveals:

  • On April 10 2016 – a day before Tegeta requested Eskom for a pre-payment – Nteta forwarded a board submission for the R500-million prepayment to then-Eskom company secretary Suzanne Daniels;
  • On April 11 2016 Tegeta’s holding company Oakbay’s chief executive Ravindra Nath sent a draft document requesting the prepayment to Nteta, who later edits and sends back on April 12 – after the resolution – for Nath to fix. Critically, the new document had removed from it reference to previous discussions on the prepayment, and offers of a 3.5 percent discount, which Singh told parliament’s state capture enquiry was his idea, to save Eskom money. Nath’s formal application sent to Nteta on April 12 is backdated to April 11 and also a carbon copy of the version drafted by Nteta earlier that day;
  • Despite one board member raising 11 critical issues with the prepayment, the board’s tender committee ignored the questions and resolved that Singh be tasked with concluding a guarantee for Eskom; and
  • Eskom’s board acceded to the request, whose terms and conditions included accepting Tegeta shares as security, before Tegeta’s own directors had agreed to this.

International consultancy McKinsey & Company, which recently paid back R900-million paid to it by Eskom in a dodgy Gupta-related deal, was brought into the mess as investigators uncovered emails pertaining to the resolution, being sent to two staffers at the company. It told investigators it was not involved in the prepayment.

“The discussions between Tegeta and Eskom for the prepayment of R 659 588 079.00 to Tegeta by Eskom commenced well before 11 April 2016 … Conditions and terms of the prepayment were discussed and finalized prior to Eskom’s special board tender committee meeting on 11 April,” the report concluded of the information above.

“The SBTC was a mere formality to rubberstamp the decision to approve the prepayment as the documentation was for the approval were already sent to Koko, (acting Chief Procurement Officer Edwin) Mabelane, (Primary Energy divisional head) Vusi Mboweni to sign even prior to the sitting of the SBTC to consider the prepayment request by Tegeta … Nteta drafted the letter that was used by Tegeta …”

The findings went on: “Singh and or Eskom did not negotiate the 3.5 percent discount as the said discount was offered by Tegeta prior to the BTC’s approval of the prepayment. Singh may have misled the Parliamentary Portfolio Committee on Public Enterprises when he indicated that he negotiated the 3.5 percent discount as the documents indicate that he did not do so.”

A question on whether he misled parliament was put to Singh, but he did not respond to them despite promises to do so, the report said. The Mail and Guardian also asked him for comment and he had not yet responded at the time of publication.

Nteta, who was charged by Eskom after having resigned earlier this year, said she only got the report on Friday and was still going to study it. “Not sure how they could have deduced that,” she said of the report’s assertions that she was a central figure to the prepayment.

Daniels said her editing of any documents was part of her job as company secretary to ensure that submissions for the board made sense. In her mind, she added, the documents were being prepared for an April 13 meeting, and it was only at 7.30pm when she was called by BTC chair Zethembe Khoza to set up the 9pm teleconference 9pm that she became aware.

“Everything in that report is consistent with what I’ve said and I have not been contacted by these investigators for any corroboration and or explanation,” she said.

Earlier this year Eskom publicly announced that it’s illegal and corrupt dealings with the Guptas, associated companies and individuals, had brought it to the brink of a coal crisis as stores at several power stations ran critically low because coal was being moved between power stations to hide shortages at Gupta-supplied stations.