Eskom plans to take action against Koko
• Disciplinary measures loom for former acting CE • Chief financial officer faces investigation
The Eskom board will announce on Tuesday disciplinary measures against its former acting CE in a bid by the power utility to clean up its corruptiontainted image.
The disciplinary measures stem from an investigation into allegations of conflict of interest involving hundreds of millions of rand on the part of Matshela Koko. The investigation found substantial evidence of wrongdoing and irregularities in contracts involving a company in which Koko’s stepdaughter has an interest.
The utility will also begin a process to investigate chief financial officer Anoj Singh.
Eskom met law firm Cliffe Dekker Hofmeyr last week to finalise preparations for the disciplinary action. Charges would be formally put to Koko this week, said acting chairman Zethembe Khoza on Monday.
In May, Eskom instructed Cliffe Dekker to conduct the investigation into irregular contracts from which Impulse International scored contracts worth hundreds of millions from a division headed by Koko since 2014. Cliffe Dekker roped in auditing firm Nkonki to conduct a forensic investigation into Koko.
The investigation looked at the period in which Koko’s stepdaughter, Koketso Choma, was a director at Impulse and owned up to 35% of the shares in the supplier company.
In December, Koko became acting Eskom CE after the tearful departure of Brian Molefe, who left after being implicated in alleged irregular dealings with the Gupta family, whose companies supplied coal to Eskom.
Koko has been on leave since May, pending the finalisation and outcome of the investigation into his conduct.
“The chairperson of the audit committee is now busy finalising the charges and we would hope to finalise the matter before the end of the month,” Khoza said on Monday.
He has been acting chairman since the unceremonious departure of Ben Ngubane, who resigned in June after the board’s mishandling of Molefe’s departure and numerous allegations of corruption at Eskom.
In its report on Koko, Cliffe Dekker said that Eskom had paid Impulse more than R390m for 10 contracts awarded by his division since July 2014.
The company sought the advice of a senior counsel, who recommended Eskom put Koko through a disciplinary process on at least six charges.
These will include Koko’s failure to declare his conflict of interest involving Choma’s direct shareholding in Impulse and his failure to follow up on whether Choma did indeed “relinquish” her shares after Koko allegedly instructed her to do so. Choma transferred the shares into the Mokoni Trust for her personal benefit.
“There are sufficient anomalies in the explanation actually given by Koko and further many unanswered questions from the explanations given by Koko, [wife Mosima] Koko, Choma and [Impulse CEO Pragasen] Pather for Eskom simply to be satisfied that the matter can be closed,” said Cliffe Dekker in the final report dated June 23, seen by Business Day.
“There are sufficient issues which arise which would warrant disciplinary proceedings to be instituted against Koko.
“This would be in the interests of both Koko and Eskom since, through the interrogative process of a disciplinary proceeding … the anomalies and unanswered question can be fully canvassed,” said Cliffe Dekker in the report.
Cliffe Dekker warned that the disciplinary proceedings “may well exacerbate Eskom’s
concerns and illustrate that the anomalies are real …. and that there are no satisfactory answers to the unanswered questions. This could then lead to Eskom taking further action against Koko, depending on the outcome of and recommendations made through the disciplinary proceedings.”
As if to stress the serious nature of the charges against Koko, Nkonki followed its report with another one, adding more potential charges against Koko.
In a letter to Cliffe Dekker, dated June 26, Nkonki says that it had found there were further “matters of concern” that arose during its investigation and asks that Eskom be informed. These included whistle-blower allegations that Impulse was paid for services it had not rendered.
It was awarded contracts without having been appointed a vendor, other potential competitors “were technically restricted” and Eskom violated its own and statutory policies in paying Impulse on six occasions without it having submitted relevant documentation, such as tax clearance or BEE certificates.
There were no tenders for the work and no quotations. Eskom had also not issued any purchase order for the invoice to be paid.
Nkonki said: “The whistleblower stated that the omission of each item as listed in the summary was a violation of Eskom procedure and that possible payment occurred against quotations opposed to invoices.”
This points to the possibility that criminal proceedings may also be instituted against Koko, who has in the past found himself on the wrong side of the law or employment contract. About four years ago, Koko was found guilty of a serious offence, whose nature is known to Business Day, but he was only suspended for 14 days.
In 2017, the Treasury found Eskom had irregularly paid about R700m to a company owned by the Gupta family, in contravention of the Public Finance Management Act.
Koko had authorised the payment and then lied about it when confronted by current affairs show Carte Blanche. Former public protector Thuli Madonsela also highlighted this payment, together with others, as having been made illegally to benefit the Gupta family to acquire a company that supplied Eskom with coal.
The utility would refer allegations against Singh for discussion at the board, Khoza said.
Singh remains in his position and was to have presented Eskom’s financial report on Tuesday. However, on Monday Eskom postponed the presentation “due to unforeseen circumstances”.