Business Day

Eskom: Dentons’ advice mostly taken

- Sikonathi Mantshants­ha Financial Mail Deputy Editor mantshants­has@fm.co.za

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.

 ??  ?? Ben Ngubane
Ben Ngubane

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