Brown drags feet on Eskom chiefs
Minister handed evidence on payments to Trillian Officials named include Koko and Singh
Public Enterprises Minister Lynne Brown was handed damning evidence against senior Eskom employees in a scathing report on Gupta-linked Trillian and McKinsey, but has for two weeks failed to act on it.
Documents seen by Business Day show Brown was given the prima facie evidence that Eskom used to suspend top officials for authorising the irregular payments of R1.6bn for six months work in 2016.
They include Eskom’s former acting CEO Matshela Koko, chief financial officer Anoj Singh, acting head of group capital Prish Govender, former procurement head Edwin Mabelane and senior procurement manager Charles Kalima.
Under Brown’s leadership and with her alleged political influence, the utility has also failed to take action against any of the executives accused of causing Eskom to incur R3bn in wasteful and irregular expenditure. The qualified audit opinion this caused could trigger the recall of billions of rand that Eskom owes investors.
Govender, Mabelane and Kalima were charged in August in relation to the Trillian payments, but their suspensions were reversed a day later, allegedly after board chairman Zethembe Khoza intervened on their behalf. Khoza denies this.
Koko is on suspension for an unrelated matter and Singh is on special leave after Eskom’s lenders called for his head when the utility posted R3bn in irregular expenditure, thereby breaching some of its covenants and risking a trigger default on outstanding debt.
Koko was suspended four months ago on full pay but his disciplinary hearing has allegedly been blocked by the board. Executives report to the CEO, but Eskom sources say acting CE Johnny Dladla appears happy to let the board usurp his executive responsibilities.
The documents handed to Brown detail infringements including payments to Trillian with neither invoices nor contracts, unauthorised and irregular expenditure and breaches of the Public Finance Management Act. The documents show
Eskom had no legal basis for paying Trillian R600m as McKinsey’s partner when Trillian had no contract with either McKinsey or Eskom. They also show Eskom failed to ask the Treasury for permission to deviate from normal procurement processes before signing the contract with McKinsey, as it was required to do.
The officials have directed queries to Eskom’s media desk.
Brown’s spokesman, Colin Cruywagen, said the minister “cannot overstep statutory powers in order to satisfy particular media/political interests. The minister must act on the duly instituted investigations, not on media reports.” He said it was Brown who had insisted the board investigate Koko and Singh, which led to them being placed on special leave.
Brown had “taken a particular interest in the Trillian matter as information received from Eskom, relayed to Parliament in good faith, has subsequently been brought into question”.
Brown, relying on false information from Eskom, previously told Parliament that the power utility had not paid any money to Trillian. However, in July, Eskom admitted this was a lie, but said the payments had been given the green light by management consultancy Oliver Wyman.
In August, Eskom was forced by Oliver Wyman to concede that this, too, was a lie as the firm’s final report had, in fact, red-flagged the payments and recommended a legal review before making a final settlement.
This week, Eskom declined to respond to questions “due to strict confidentiality considerations of the HR processes currently under way. It is worth noting that most of the officials mentioned have been charged and are currently being subjected to internal processes, which are being undertaken expeditiously,” Eskom said. “It is noteworthy that all these actions have been undertaken under the interim group CE Johnny Dladla.
“It is, therefore, incorrect to suggest that he has not acted against perceived misconduct.”
Trillian has repeatedly denied any wrongdoing.