Gigaba, Brown face state capture probe
Draft parliamentary report into Eskom names 44 people and 25 firms for further investigation
Embattled home affairs minister Malusi Gigaba and former public enterprises minister Lynne Brown are among individuals suspected of being “captured” and who should be criminally investigated, according to a draft parliamentary report into Eskom, the utility brought to its knees by alleged mismanagement and corruption.
Senior staff at disgraced global consultancies, McKinsey and KPMG, which have been embroiled in some of the most high-profile cases of alleged state capture during Jacob Zuma’s presidency, were dubbed in the report as “private sector mercenaries” who should face inquiries.
The draft report sets out a list of 44 people and 25 companies that the committee suspects of being “captured”, with a view to pointing the National Prosecuting Authority and the Special Investigating Unit in the right direction.
There is growing public frustration that despite the countless allegations in the public domain about politically related corruption at state-owned enterprises, no one has yet been successfully prosecuted.
The report has not yet been finalised even though the committee completed its inquiry in April, leading to concerns that it is being stalled. Business Day has seen a copy of the draft.
Committee chairperson Zukisa Rantho said on Thursday that final corrections were being done, after which it would be adopted and sent to the National Assembly.
Several other politicians, including former deputy public enterprises minister Ben Martins, are also on the list, as well as staff members of Gigaba and Brown.
Brown and Martins said on Sunday they were unable to comment on a report they had not seen.
Gigaba also said he could not comment as he had not as yet seen the report. The report is
scathing about both Brown and Gigaba, recommending a forensic inquiry into board appointments they made at Eskom, which in both cases comprised a large number of individuals linked to the Gupta family that has been accused of using connections with Zuma and his family to divert state resources towards their businesses.
These people lacked the “required calibre, expertise and experience”, it said.
The MPs also found that they “were in dereliction of their duties and acted in a manner demonstrably in breach of the Executive Ethics Code”.
They dismissed Brown’s repeated claim that she did not know what was going on at Eskom, saying she had “misrepresented her powers and authority to parliament in order to evade responsibility for a large set of impugned decisions”.
The hijacking of Eskom’s procurement processes would not have been possible “if not for the guise of integrity and legitimacy that internationally reputable entities afforded certain impugned Eskom decisions”, the report said.
The “private sector mercenaries” identified by the report include Eric Wood, the CEO of consultancy Trillian, Vikas Sagar and Alexander Weiss of McKinsey.
KPMG and the relevant members of its corporate law and deal advisory divisions are also named in the report.
Wood has previously denied all wrongdoing, while Sagar and Weiss did not respond to requests for comment.
Sagar left the company in 2017 after an investigation, and Weiss was sanctioned by losing financial and career benefits.
Earlier in 2018 McKinsey repaid about R1bn of fees it received from Eskom, while KPMG, also embroiled in the VBS Mutual Bank scandal, lost a number of high-profile clients.
The roles played by Vikas and Weiss, who were involved in brokering an irregular subcontract with Trillian as part of the R1.6bn contract with Eskom, were “highly questionable” and “warrant further investigation, including for potentially serious criminal conduct”, the report says.
The committee also heard evidence on six specific transactions, all of which it says it deemed unlawful and, or, corrupt.
A McKinsey spokesperson said on Sunday: “We have not been provided with a copy of this leaked document, so it’s impossible for us to comment on what it may or may not contain. We support the committee’s work and have cooperated fully by providing written and oral evidence.
“We will study the committee’s recommendations seriously when its report is officially released and respond at that point.”
It also said: “We have conducted an extensive investigation, including more than 110 interviews and a review of more than one million documents.
“We found no evidence to substantiate any allegations that our firm engaged in acts of corruption or bribery.”