Hogan: case of CEO gone rogue

ESKOM: ZUMA BACKING MAROGA – INQUIRY TESTIMONY

Flouting company law and corporate governance exposed.

So bizarre was the former president’s meddling in the management of state-owned enterprises (SOEs) that he ordered former public enterprises minister Barbara Hogan to tell the Eskom board to reinstate CEO Jacob Maroga who had resigned earlier.

Jacob Zuma’s flouting of corporate governance and company law, including assuming the power to choose SOE boards and CEOs, was laid bare yesterday during Hogan’s testimony in the Commission of Inquiry into State Capture.

Hogan, who was in Zuma’s Cabinet from 2009 to 2010, said she butted heads with him “mainly because we did not share the same values”. This led to her being fired and offered a diplomatic post in Finland.

The last straw was when Zuma ordered her to reinstate Maroga, who had had “an irretrievable breakdown” in relations with former Eskom chairperson Bobby Godsell. On October 28, 2009, Maroga told a board breakaway session chaired by Godsell he was resigning as CEO.

“Eskom faced serious funding and operational problems and had to produce reliable energy. I was informed Maroga came with a resignation letter and said he was resigning. The board unanimously accepted it.”

But when the board engaged with him “to discuss the modalities of his departure”, he announced he was no longer resigning. Hogan said she did not take sides in the standoff between Maroga and Godsell and proposed mediation, which Maroga rejected. When Maroga and Hogan met, she said: “He was absolutely arrogant and asked me to affirm his position of CEO.”

She later received a call from a furious Zuma “asking what did I think I was doing. He said I should stop the board from processing Maroga’s resignation. The board and I did not want to be disrespectful to the president and obeyed.

“On November 8, 2009, he asked me to confirm Maroga back in his position. I said I could not assume responsibility for the instruction and asked him to implement it. He was forcing me to take a position the board was not happy with.”

Zuma then told Hogan he had given Maroga permission to assume responsibilities as CEO. Maroga “then wrote to me saying he was CEO and board director on instructions of the shareholder at the highest level and would participate in all board meetings.

“It was a case of a CEO gone rogue on the understanding the president would back him up.” –