Koko evidence leader had Eskom business ties

Lawyer has shares in firm awarded joint venture Contract was cancelled after objections from rival bidders

Sebetja Matsaung, the lawyer leading evidence at the disciplinary hearing of Matshela Koko, owns shares in a firm Eskom had planned to do business with.

Business Day has established that FBC and Associates is the lead contractor of a joint venture to which Eskom had planned to award a five-year contract in 2016, potentially worth R500m. Matsaung later became a 20% FBC shareholder and director.

A copy of the award letter that Business Day has seen lists Koko as the person who would sign it on Eskom’s behalf.

The letter said the joint venture would be awarded a fiveyear contract starting on July 1 2016 to supply scaffolding and insulation cladding to Eskom’s Grootvlei and Komati power stations in Mpumalanga.

Matsaung’s company owns 51% of the joint venture, with the remaining stake owned by Johannesburg Scaffolding and Nova Plant Services.

Nova CEO Bobby Pillay confirmed receiving the acceptance letter but said it was withdrawn shortly afterwards after objections were received from rival bidders. The contract was potentially worth “over R100m a year”, he said.

His firm had partnered with FBC because “they supplied the BEE [black economic empowerment]” element and its owners had contacts in Eskom.

FBC founder Phindulo Fungisani referred Business Day’s questions to Matsaung, who confirmed he owned a 20% stake in the firm.

Asked if his company’s efforts to do business with Eskom represented a conflict of interest if he were to successfully prosecute Koko, Matsaung said the contract was not relevant to the case. He stressed he had “bought shares and became a director in FBC long after the tender was awarded to FBC”.

“We black lawyers struggle to get business from government, and you’re now busy distracting us with something that’s not relevant,” he said.

It is unclear when he became involved in the firm. Matsaung said he had demanded to become a director in April after investing “half a bar”, but did not specify when this happened.

Matsaung said: “And by the way, the tender is long on hold. No one commenced. And the FBC joint venture has agreed in writing to Eskom to accept a cancellation of the award.”

Questions were raised about the selection of Matsaung as evidence leader after it emerged that the power utility’s own legal division described him as “too junior to chair the inquiry, and [he] lacks the experience and

expertise”. Koko faces six charges including failing to declare his stepdaughter Koketso Choma’s shareholding in Impulse and his wife’s business dealings with Impulse CEO Pragasen Pather.

Impulse earned more than R640m from the power utility after Koko’s stepdaughter had joined the company. Koko’s disciplinary hearing resumed on Thursday, with the prosecution calling its second witness, Annamari Krugel, an investigator and auditor at Nkonki.

The audit company had conducted an investigation into the allegations against Koko with law firm Cliffe Dekker Hofmeyr.

Krugel testified in the hearing that she had interviewed Koko’s wife and stepdaughter.

“Mrs Koko told me she introduced Ms Choma to acquire the stake,” said Krugel.

The hearing will continue on Friday.