Eskom pressured Glencore to sell mine – Group Five shares plunge
Utility’s former acting chief executive Matshela Koko manupilated system to favour Tegeta
DETAILS from the explosive forensic report into Eskom has revealed the pivotal role played by erstwhile acting Transnet chief executive Matshela Koko and his management team in strong-arming Glencore to sell the Optimum Coal Mine (OCM) business to Tegeta.
The investigators concluded that Eskom management prejudiced Glencore by refusing to sign the negotiated Coal Supplier Agreement (CSA), giving an advantage to Tegeta to acquire all assets in OCM , which amounted to “the abuse of a position of authority, a breach of trust”.
Investigators found that Eskom management prejudiced Glencore by fining OCM R2.1 billion for supplying allegedly poor-quality coal. In a damning conclusion, the report found that Eskom acted in bad faith when the company, represented by Koko, refused to waiver the historical penalties levied against OCM which led to OCM going into business rescue, but reduced the said penalties through arbitration after Tegeta purchased the assets in OCM.
“We noted through minutes of a meeting between Eskom, Tegeta and Glencore, that Koko indicated that Eskom was not willing to waive the penalties levied against OCM,” the report said.
“It would appear that Eskom took a hardline stance to attempts by Glencore or the appointed business rescue practitioners to negotiate the price Eskom was paying for Optimum coal.”
Optimum was placed in business rescue in August 2016 after Glencore said its contract to supply coal to Eskom had lapsed.
Eskom had refused to renegotiate the contract and said it would hold Tegeta to the same arrangement.
It also fined Optimum R2bn over the quality of the coal it was supplying.
Koko shrugged off the bombshell report as nothing “new”. “Once you start reading the report you will see that my name has just been parachuted because it does not answer what exactly Koko did for the coal supply to be unlawful,” he said.
On November 27, 2015 the Gupta and Duduzane Zuma-owned Tegeta made an offer of R2.15bn for OCM.
A day later, the Department of Mineral Resources (DMR) sent officials to all Glencore mines and conducted inspections and issued them with Section 54 notices, which enabled the DMR to close entire mines and shafts in the event of a safety breach.
Then minister of DMR Mosebenzi Zwane met Glencore officials to persuade them to sell their business to Tegeta. The report also revealed how former Eskom chief executive Brian Molefe allegedly blocked the purchase of Optimum Coal by Phembani, a company led by group chairman of MTN Phuthuma Nhleko.
Investigators said it could be determined from available facts that Phembani Group attempted to purchase OCM, but its efforts were allegedly thwarted by Molefe.
They determined that, contrary to the primary energy division request to negotiate a new contract with OCM and to negotiate the sale of OCM to either Eskom or a state-owned mining house, Eskom instead negotiated and facilitated the sale of OCM to Tegeta only a month after Molefe rejected Phembani’s request to buy OCM.