Golden handshake for Eskom boss on table
Secret talks to eject generation chief Koko Parties said to be close to separation deal
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 Majoa 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 there were 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 under 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 to get 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, as that would be in contravention of the Public Finance Management Act that 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 monies to Koko, the Treasury and the public enterprises minister would have to approve it.
At least three forensic investigations into corruption recommended that 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 R1.6bn 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 that 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 also admitted it did not have a contract with Trillian and was not aware of any services provided by the firm. Eskom’s own internal forensic unit recommended disciplinary procedures against those implicated in the payments to Trillian and McKinsey. G9 Forensic Consulting arrived at a similar conclusion in its report, also commissioned by Eskom, as did US management consultancy Oliver Wyman.
In a report commissioned by Tokyo Sexwale, former chairman of Trillian, advocate Geoff Budlender called the McKinsey/Trillian arrangement at Eskom “a sham”. Koko was not charged for his role in 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 R1.6bn. This, however, is a civil case that seeks to safeguard stolen property against loss, while a criminal leg may be instituted at a later stage.
Koko’s position as head of the utility’s generation unit became untenable after he was suspended in May 2017, following numerous allegations of conflict of interest in which he was accused of irregularly awarding more than R1bn in contracts to a company in which his stepdaughter, Koketso Choma, owned shares.
He was also accused of irregularly removing some colleagues from their positions at the Kusile power station. Koko was found not guilty and reinstated in January after almost eight months on suspension.
Asked detailed questions about the negotiations and the legality of any proposed golden handshake, Eskom skirted the questions, instead only confirming Koko’s “current status” as an employee.
In October, Eskom’s legal head Suzanne Daniels issued a letter of demand to McKinsey and Trillian to pay back the money — she was suspended two days later. McKinsey has since offered to repay the money, while Trillian denies any wrongdoing.
Bizarrely, Eskom yesterday 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.”