Eskom CEO falls on sword amid calls for more
IN a surprise announcement late on Friday Brian Molefe said he had quit as CEO of Eskom, following last week’s revelations that he had a close relationship with the Gupta family.
Molefe, who was named acting CEO in April 2015 and was later appointed on a permanent basis, said he was leaving voluntarily in the interests of corporate governance. Many commentators said that the rest of the Eskom board should now follow.
The State of Capture report, drafted by former public protector Thuli Madonsela, said Molefe had regular contact with the Gupta family. It also detailed alleged irregularities in Eskom’s conduct in the sale of Optimum Coal Mine to the Guptas’ Tegeta Resources.
Azar Jammine, chief economist at Econometrix, said: “It’s a pity that the best out of all of them should fall on his sword. We know of others in state-owned enterprises who should have fallen on their swords and are still in their places, so clearly this is not enough.”
Jammine said Molefe might have been pressured to resign. The commission of inquiry that Madonsela called for “would have cleared a lot of issues and I find it disappointing that Molefe didn’t wait”.
“People will suspect it was an admission of guilt, although he denies it vehemently. But then why resign at this stage?”
Asked about the implications for plans to build additional nuclear power, Jammine said there were perceptions that the nuclear deal was aided by Molefe because of his closeness to the Guptas and President Jacob Zuma. “Therefore you may well see a change of direction.”
Iraj Abedian, economist at Pan African Investment, said the web of “corruption” was going to be dismantled piece by piece. Molefe had been an active and vocal champion of the Guptas, he said.
Abedian welcomed Molefe’s resignation because he was no longer a credible CEO.
“He was an active supporter of some of these misguided projects, be it opposition to independent power producers or a champion of nuclear. We are going to see a bit of a slowdown on those, ” UNDER STRAIN: Brian Molefe Abedian said.
“He is by no stretch of the imagination the only one, they [the board] should all resign,” he added.
The nuclear plan was a misguided and corrupt project with no economic or scientific basis and it was not in the interests of South Africa, Abedian said.
“Those who champion it do it purely for their selfinterest.”
The State of Capture report recommended that Zuma set up a commission of inquiry, to be headed by a judge appointed by the chief justice, to investigate the relationship between the Gupta family and several public figures and enterprises.
Molefe said: “I am confident that when the time comes, I will be able to show that I have done nothing wrong, and
I am confident when the time comes, I will be able to show I have done nothing wrong
that my name will be cleared.”
Eskom chairman Ben Ngubane said Molefe’s decision was regrettable but understandable, while Minister of State Enterprises Lynne Brown said Molefe had been key to developing Eskom’s turnaround strategy, which was beginning to yield positive results.
Matshela Koko, Eskom group executive for generation, said the group had spent a lot of time trying to persuade Molefe to stay on. However, he had taken the revelations of the state capture report personally and did not want to put anyone else at Eskom under stress. The country had put him under “tremendous strain”, Koko said.
“I don’t think Eskom will find any other leader better than Brian,” he said.