Golden handshake for Koko?
EMBATTLED electricity producer Eskom, which has described its financial situation as “very dire”, is in secret discussions to terminate the employment of controversial executive Matshela Koko.
The parties are close to a separation agreement as the talks are now centred on the amount the head of generation would take to agree to leave.
Talks are at a sensitive stage, according to three informed sources.
Last week Koko was replaced by Willy Majola as interim head of generation, a move Eskom said was “a mutual agreement” for Koko “to settle in”.
Two senior government officials outside Eskom, however, confirmed plans to remove Koko within days.
The practice of paying officials suspected of corruption to go rather than face charges has been a common feature of President Jacob Zuma’s administration. How the ANC’s new leadership responds to a generous deal with Koko will be a key indicator of whether it intends getting tough on corruption.
The talks with Koko started last week, according to the sources. Eskom would, however, be stretched to justify paying a golden handshake to part ways with Koko – it would contravene the Public Finance Management Act, which governs its finances.
Eskom failed to take disciplinary and criminal action against Koko, as recommended by independent forensic investigations in 2017 and its own forensic team. If any separation deal involved Eskom paying Koko, the Treasury and public enterprises minister would have to approve it.
At least three forensic investigations into corruption recommended Eskom lay criminal charges against Koko and five other executives and senior managers, as well as subjecting them to a disciplinary processes for their role in facilitating a R1.6-billion illegal payment to global consultancy McKinsey and the politically connected consultancy, Trillian – which was majority-owned by Gupta family associate Salim Essa at the time.
In an August 2017 forensic report, commissioned by Eskom after media and public outrage, law firm Bowmans recommended the utility charge Koko, chief finance officer Anoj Singh, former head of procurement Edwin Mabelane, acting head of group capital Prish Govender, senior procurement manager Charles Kalima and Maya Naidoo (or Bhana) for their role in the illegal deal with McKinsey.
Eskom admitted it did not have a contract with Trillian and was not aware of any services given by the firm.
Eskom’s own internal forensic unit recommended disciplinary procedures against those implicated in the payments to Trillian and McKinsey.
In its report G9 Forensic Consulting, also commissioned by Eskom, arrived at a similar conclusion, as did US management consultancy Oliver Wyman.
In a report commissioned by former Trillian chair Tokyo Sexwale, advocate Geoff Budlender described the McKinsey/Trillian/Eskom arrangement as “a sham”. Koko was not charged for facilitating the illegal payment.
It emerged in January that the National Prosecuting Authority’s asset forfeiture unit had obtained a preservation order to freeze McKinsey’s and Trillian’s assets in order to secure and to recover the R1.6-billion. However, this is a civil case seeking to safeguard stolen property against loss, while a criminal leg may be instituted later.
Koko’s position as head of the utility’s generation unit became untenable following numerous allegations of conflict of interest where he was accused of irregularly awarding more than R1-billion in contracts to a company in which his stepdaughter, Koketso Choma, owned shares.
He was also accused of irregularly removing colleagues from their posts at the Kusile power station. Koko was found not guilty and reinstated in January after eight months’ suspension.
Asked detailed questions about the negotiations and the legality of any proposed golden handshake, Eskom skirted the issue, only confirming Koko’s “current status” as an employee.
In October, Eskom’s legal head Suzanne Daniels sent a letter to McKinsey and Trillian demanding they pay back the money. She was suspended two days later. McKinsey has since offered to repay the money. Trillian denies any wrongdoing. Bizarrely, Eskom on Wednesday changed its tune on the McKinsey and Trillian deal: “The investigation into McKinsey and Trillion (sic) was done by a senior council (sic) and they found the contract was valid, hence Prish Govender’s suspension was lifted."”