Auditors flag irregularities at Eskom

Kevin Crowley

Eskom says auditors have raised concerns about issues relating to Matshela Koko and Brian Molefe, who both ran the power utility this year, in their year-end review.

The company’s external auditors reported two irregularities to the Independent Regulatory Board of Auditors (IBRA), Eskom spokesperson Khulu Phasiwe said yesterday.

The first was Eskom’s relationship with Impulse International, which got contracts from the power provider while Koko’s stepdaughter was a nonexecutive director. The second related to the reinstatement of Molefe as CEO in May. He was removed three weeks later and a legal case is ongoing.

Eskom had 30 days to report back to IRBA to state whether the issues had been fixed or not. The “reportable irregularities” were stated by Eskom’s auditor, SizweNtsalubaGobodo, as “continuing”, IRBA said. They are being processed and will be forwarded on to the Companies and Intellectual Property Commission, the auditor-general and the department of public enterprises.

“Eskom’s board has taken adequate steps to the satisfaction of the auditors that the irregularities were no longer continuing,” the power utility said. “In Molefe’s matter, it was noted that the irregularity could only be closed out when the court proceeding had been concluded.”

Some of Eskom’s top leaders, including Molefe and Koko, were cited in a public protector report last year suggesting Eskom gave preferential treatment to the Guptas by awarding coal-supply contracts and helping them buy Optimum Coal Holdings. – Bloomberg