SA’s rot began on a winter Wednesday

Slowly, the lid of years of fraud at Eskom is being lifted. Thuli Madonsela started it in her report on state capture last year, leading to the resignation of Eskom CEO Brian Molefe.

This week Eskom chairman Ben Ngubane indicated that a half-completed forensic report on Eskom would be released. And then he broke his promise and offered a redacted version to people or institutions who applied for a copy under access to information legislation.

Fortunately, Financial Mail deputy editor Sikonathi Mantshantsha had already seen a few versions of the report, by law firm Dentons.

Like the professional he is, he waited for Ngubane to have his say and then let rip. This week’s Financial Mail is fantastic and Mantshantsha’s reporting on the rot at Eskom — the over-invoicing, the conflicts of interest, the waste of money from a utility that constantly whines about its need to raise electricity prices — is spellbinding.

I am not going to retell it, but I’ve been fascinated by Eskom since I began to understand the Gupta family’s relationship with President Jacob Zuma. There was a moment when state capture began. It was on Wednesday, June 8 2011, when Public Enterprises Minister Malusi Gigaba told a shocked Cabinet of plans to fire the chairmen at Eskom, Denel and Transnet and took a blade to almost all the nonexecutives on the Eskom and Denel boards.

Gigaba, I have no doubt, was following the orders of the president. He had been in the job barely six months. But there he was, conducting a purge the import of which was not to be repeated until Zuma fired his finance minister in December 2015.

The new chairs and many of the new nonexecutives were proxies for Zuma cronies. In fact, Cabinet pushed back on one appointment Zuma had wanted Gigaba to make.

The Guptas (this is obviously conjecture, but I’m confident I’m right) had told Zuma they wanted Iqbal Sharma, a former trade negotiator at the Department of Trade and Industry, as Transnet chairman and Mafika Mkwanazi removed. Cabinet said no. So Sharma got the next best thing – he chaired the Transnet board’s procurement committees – and was later, along with another Gupta associate, Salim Essa, to become indirectly involved with large tenders from Transnet. Essa joined the board of Broadband Infraco under Gigaba and, miraculously, chaired the board procurement committee there for a while.

This is all background to what is coming out of Eskom now. In September 2014, an experienced civil servant, Tshediso Matona, walked into Eskom as its new CEO. He was (and is) a man of the highest integrity.

Six months later he was gone, suspended by the “board” after he instigated a process to find the rot at the power group.

On January 21 2015, Eskom (Matona) published an invitation to tender for The Provision (of) Forensic & Anti-Corruption Consultation Services for Eskom Holding Soc For A Period Of Three Years. It spelled out what probably even a blind man could have seen after a short time in Eskom’s headquarters.

The tender was to provide “general fraud investigations – investigate suspicious transactions; investigate possible syndicate criminal activities related to financial/tender/procurement matters; financial statement fraud (overstating assets, revenues, profits); breach of contract investigations, establishing the losses, misrepresentation, nonperformance, material breach, concealment, corruption and collusion; lifestyle audits, interviewing and questioning of witnesses and suspects, collecting and safeguarding of evidence, facilitating of polygraph examinations if and when necessary…” — and that is heavily edited.

In other words, Matona had found the beast in Eskom and he was going to stop it. You can imagine the panic on the board. It did not take long for the Capturists to hit upon a plan. Matona could simply not be allowed to control such a process. He had to go.

Thus it was that on or about Wednesday, March 11 2015, the same day the tender closed, a group of Eskom middle managers found themselves being “interviewed” by Essa at his offices. They were assigned roles in a “new” Eskom. I have twice asked Essa about this and he has never answered.

Public Enterprises Minister Lynne Brown was away, so someone had to tell the Department of Public Enterprises not to get involved. That phone call was made to the then acting director-general by Zuma himself, according to legend in the department.

And on the next day, Thursday, March 12, Matona was hurriedly suspended along with three other top executives, including Matshela Koko. Brown arrived back but took a day or two to come out in favour of the suspensions, though she quickly went to work on Molefe to get him to come to Eskom’s aid which, in a way, he did.

Dentons won the (since renamed) tender, but their research did not get far and the board closed down the project. Koko was the only suspended executive to return and is now acting CE. Brown has no authority in Eskom. The Guptas got an Eskom-tied coal mine and a host of seriously good contracts for almost no money of their own. Zuma had the decency later to apologise to Matona for the way he had been treated.

I can’t wait for the next edition of the Financial Mail.

MATONA HAD FOUND THE BEAST IN ESKOM AND HE WAS GOING TO STOP IT. YOU CAN IMAGINE THE PANIC ON THE BOARD