New twist to Eskom probe
Under-pressure power utility agrees to publish ‘sanitised’ report amid graft fears
THE Eskom board has finally succumbed to pressure, allowing the contents of a 2015 “sanitised” report into the state of the power utility to be published.
The report by law firm Dentons has been hidden in chairman Ben Ngubane’s vault at Megawatt Park since July 2015.
The inquiry was initiated to establish the causes of the near operational meltdown the utility had suffered in 2008, when it could not adequately supply the economy with electricity.
Hiding the report fuelled suspicions of a cover-up of corruption and wrongdoing by the utility’s management and board.
Only when it became apparent the report could not remain hidden from the public – after dozens of Financial Mail interviews with current and former directors and executives of the utility – did Eskom’s board meet last Thursday formally to endorse its publication.
This is quite a departure from Ngubane’s aggressive stance over the past two years. On no fewer than four occasions did the nonexecutive chairman fob off Business Day’s sister magazine, the Financial Mail, when asked about the report.
He said: “The investigation is complete and has been handed to the minister of public enterprises. Eskom is using it to fix what was needed to be fixed.”
It was only when Lynne Brown, the minister in question, contradicted him publicly in his presence that the Eskom chairman relented begrudgingly.
It is not clear, however, which version of the report will be published as Eskom’s board kept cleansing the draft reports Dentons had presented, doing so on at least three occasions.
What the utility considers its final report has been watered down to a sanitised version the minister described as useless.
The Financial Mail has seen three different versions of the report on the investigation.
In each of those, Dentons states quite clearly and prominently that the report is incomplete because it had been stopped in its tracks in the early stages, at Eskom’s insistence.
In January, Brown implied she was complicit in hiding the probe that had cost Eskom R27-million and had resulted in the departure of three of its senior executives and the CEO.
The minister said, “There are people’s names [mentioned adversely] there, so we don’t want to go there”, when asked why the report was not being made public.
The version of the report due to be published has those names edited out.
“We have also been told there are anecdotal references to employees establishing companies using their family members and then removing themselves from the board before probity checks,” says Dentons in one version of the report.
Current and former directors spoken to said those individuals were named in an interim report presented to the board in late May as senior executives and board members.
Business Day has also seen minutes of board meetings instructing the destruction of the incriminating reports and that Dentons stop its probe. This appears to contravene the fiduciary duties of the directors, leaving Eskom potentially exposed to further abuse by the same executives.
Other allegations in the report include that Eskom paid millions into bank accounts of dubious origin in the two years to June 2015.
Whereas earlier versions contained allegations made by employees interviewed by Dentons against senior executives and directors of Eskom, accusing them of diverting commercial benefits to themselves at the expense of the electricity utility, the final version has all of those claims edited out.
As a result, the final report now only contains generalisations that would be unusable if anyone at the utility were to be brought to account.
Among the main findings of the report, which are unlikely to be published in the official version, are that Eskom’s financial problems are partly the result of its own doing when it failed to collect unpaid municipal debt and to negotiate discounts when buying diesel. — BDLive