Eskom: Dentons’ advice mostly taken
Electricity supplier Eskom said it had implemented 80% of the recommendations by law firm Dentons. The utility has, however, flatly refused to say what those recommendations were. “Two years later, 13 out of 18 recommendations have been implemented,” said an Eskom spokesman.
Eskom said it had implemented 80% of the recommendations made by law firm Dentons, but the utility has flatly refused to say what those recommendations were.
The law firm was tasked by Eskom in 2015 to look into its recent business failings.
“Two years later, 13 out of 18 recommendations have been implemented. These recommendations encompass, inter alia, information technology, legal, security and supply chain management,” said Eskom spokesman Khulani Qoma.
He said the Dentons investigation had fulfilled the terms of reference of the probe, “with no explicit attention to misconduct, the board moved expeditiously to restore the business”.
Eskom’s insistence that Dentons gave it 18 recommendations to implement is a continuation of the utility’s lies. The Dentons report that Eskom was forced to publish in February, after Business Day and the Financial Mail exposed it, contains no recommendations for Eskom. That’s because the probe was stopped midway.
Unable to supply the economy with adequate electricity, in 2015, Eskom asked Dentons to investigate what had caused the utility’s near-collapse in the previous three years. In addition to daily load-shedding, Eskom had run out of cash to pay its 49,000 staff and to continue with operations. It had no money to continue its capital build programme. It then collected an R83bn bail-out from the government, R23bn of it in cash.
However, when the probe turned up serious allegations of fraud and corruption against senior employees and board members, Eskom terminated the probe, paying the law firm off to go away.
Instead of probing further and taking action against the accused executives, the Eskom board formally resolved to hide and destroy the allegations.
Eskom then lied about the status of the probe for two years. Through chairman Ben Ngubane, it said the investigation had been completed and the report handed to the minister of public enterprises. The company was using the report’s recommendations to fix what was identified by the law firm, he said.
Public Enterprises Minister Lynne Brown, however, publicly contradicted Ngubane and rubbished his claims, saying in January that the investigation was incomplete and needed further work. She said the Dentons report “was inadequate for use”.
Brown added that the report was being kept hidden in a vault because it implicated the company’s employees with allegations of fraud and corruption.
“There are people’s names in there [in the report]; we don’t want to go there [to publish it],” the minister said.
In the interim report handed by Dentons to Eskom, it said the utility’s employees had stolen money from it and cut friends and family into business deals with Eskom. Dentons alleged that some Eskom executives had contravened the Public Finance Management Act and flouted tender processes to benefit their connections.
Many of those executives still work at Eskom, possibly perpetrating the very acts that brought the utility to its knees.
The board, however, resolved on August 14 2015 to destroy the Dentons presentation to prevent anyone from using it to pursue those accused of wrongdoing, according to board minutes that Business Day has seen.
Ngubane later said Eskom had declined to investigate and take action against people accused of corruption because “that would demoralise an already depressed organisation and dampen morale”.
Last week, when asked what those recommendations were that it had allegedly implemented, Eskom changed its tune, saying it could not corroborate the claims.