Mabuza cancels Davos trip to tackle Eskom crisis
Barely two days after his appointment, Eskom’s new chairman, Jabu Mabuza, has taken a firm hold of the reins and begun tackling the crisis that threatens to sink the utility.
He met the entire Eskom executive team on Monday, shortly after his flight from Europe landed and is hoping to organise the first meeting of the new Eskom board before the end of the week.
Just hours later on Monday night, the utility said: “Eskom has today received through Mr Anoj Singh’s attorneys a formal letter of resignation by Mr Singh from his position as chief financial officer, in line with the terms of his employment contract.”
The Eskom board, through its chairman, “has accepted the resignation”, which “is with immediate effect”.
Mabuza cancelled his trip to the World Economic Forum at Davos, which he was due to attend along with cabinet ministers and other business leaders, so that he and the board could get down to business.
Wiping out corruption at Eskom will be high on the board’s agenda and will again be highlighted at this week’s parliamentary inquiry into state capture.
Singh and head of generation Matshela Koko were to be grilled by MPs this week.
The positions of Singh and Koko became precarious after the instruction by ANC president Cyril Ramaphosa that the Eskom board root out corruption at the utility.
Ramaphosa also instructed the board to appoint a full-time CEO and a chief financial officer within the next three months.
Last week’s appointment of Mabuza as Eskom chairman, Phakamani Hadebe as acting CEO and a team of wellregarded board members with expertise has raised hopes that the power utility can be pulled out of the doldrums.
There are several pressing items that the board will have to deal with, such as the finalisation of the interim financial statements, the lack of liquidity, failures of corporate governance and corruption allegations.
It is a race against time for Eskom as it endeavours to avoid the suspension of its bonds by the JSE and a pending letter of default by the World Bank.
It also has to raise R20bn over the next two months to meet the going-concern criteria of its auditors, a requirement for it to publish its interim financial statements, which are three months overdue. The financial statements are needed by the end of January to avoid the suspension of its bonds by the JSE, which would be disastrous as it would make raising debt on the international capital market impossible.
An internal Eskom document drafted in the disciplinary procedure against Singh and leaked in September 2017, listed 10 charges of financial misconduct and breaches of fiduciary duties.
These relate to Eskom’s invalid contract with global consulting firm McKinsey; lying to Public Enterprises Minister Lynne Brown that Eskom had no contracts with Gupta-associated Trillian Capital Partners and had made no payments to it; failing to declare that the Guptas paid for his travels to Dubai; and contravening provisions of the Public Finance Management Act.
He is also alleged to have made misrepresentations to the board-tender committee to secure the payment of R1.6bn to McKinsey and Trillian.
Singh was also charged for his role in Eskom’s questionable prepayment guarantee of R1.6bn for Gupta-owned Tegeta Exploration and Resources, which enabled it to buy the Optimum Coal Mine from Glencore, as well as the prepayment of about R600m to Tegeta for coal supplies.