Banks force Eskom’s hand to suspend Singh
• Development Bank threatened to recall R15bn loan • Gigaba engaged with several lenders on Thursday
Eskom chief financial officer Anoj Singh was suspended on Thursday by the board of directors after lenders threatened to recall their loans if no action was taken against him.
Singh has been at the centre of corruption allegations at the power utility that include providing financial assistance to the Guptas to buy Optimum mine through authorising pre-payments and a R1.6bn gaurantee for the finance.
Eskom confirmed the suspension on Thursday evening.
The move is believed to have come after pressure from Finance Minister Malusi Gigaba, who this week was confronted by jittery lenders.
Eskom has R361bn in debt, of which R94bn is not guaranteed by the government.
Top of the list of concerned lenders was the Development Bank of Southern Africa (DBSA), which threatened to recall a R15bn loan the conditions of which include that Eskom maintain a clean audit.
Eskom received a qualified audit last week that included R3bn in unauthorised expenditure and two reportable irregularities, related to possible corruption by directors.
The breach of the covenant emables the bank to recall its entire facility, which has been used up by Eskom.
It is believed that the DBSA threat was followed by one from another major bank the next day. Gigaba met with DBSA representatives earlier this week and on Thursday, engaged with several other Eskom lenders.
Most banks would have bilateral loan agreements with Eskom that are not covered by government guarantees.
Singh’s suspension, will be followed by a forensic investigation to determine his complicity in the crisis at Eskom.
A spokesman for Gigaba said his concern was the broader systemic risk. The minister welcomed the board’s intervention.
Public Enterprises Minister Lynne Brown said that the “board’s decision paved the way for the investigation to take place in a transparent way”.
Eskom has endured tremendous public pressure from civil
society as well as political parties for its inaction on Singh.
Parliament’s standing committee on public accounts this week began to investigate the crisis at the utility, while the DA laid criminal charges against Singh for breaches of the Public Finance Management Act.
Among allegations that Singh faces is that he travelled to Dubai five times between June 6 2014 and December 24 2015, staying at the five-star Oberoi Hotel on each occasion — on the Guptas’ account.
The meetings in Dubai coincided with the family clinching lucrative deals at Eskom and Transnet, where Singh was formerly chief financial officer.
Last week, Eskom executives finally admitted, after months of public denial, that Eskom had paid Gupta-linked company Trillian altogether R495m — without a contract being in place.
Singh, whose action at Transnet and Eskom had placed him in position as one of the Gupta family’s most valuable lieutenants, was somewhat of an untouchable personality.
Last week, Eskom chairman Zethembe Khoza said he felt satisfied on the strength of explanations from Singh that there was no reason to suspend him.
Brown was equally reluctant to act, describing events at Eskom as “operational” in which she could not intervene.
The minister has repeatedly described the allegations against Singh and former CE Brian Molefe as unproven allegations.