Eskom guns for the Guptas

COURT SUMMONS: R3.8 BILLION CLAIM LODGED

Power utility out to recover money it says was diverted to help brothers secure mining operation.

Power utility Eskom, alongside the Special Investigating Unit (SIU), has issued a summons in the High Court in Pretoria in an attempt to recover funds from former Eskom executives, former board members, members of the Gupta family and their associates in what may be the biggest civil claim in recent history.

The claim for damages for Eskom relates to R3.8 billion in funds diverted from Eskom to allegedly help Gupta family members and their associates to acquire the operations of Optimum Coal Holdings (OCH), which owned Optimum Coal Mining, that supplied the Hendrina power station with coal.

The chief executive of the Organisation Undoing Tax Abuse (Outa), Wayne Duvenage, described the move as “long overdue” as well as “very significant” for a number of reasons.

Firstly, he said, it was a step towards holding people to account.

“And until that starts taking place, people don’t believe government and government is suffering a crisis of legitimacy,” Duvenage said.

But, he said, Eskom was also now “doing what it should be doing”.

“Its leadership has decided to start holding its previous leadership to account and that’s what we at Outa have been advocating for,” he said.

“So it’s nice to see the Eskom executives doing their job. It shouldn’t be left up to civil society.”

In a statement, the power utility highlighted that the funds were lost in a “concerted effort to divert financial resources from Eskom to illegally benefit the Gupta family and entities controlled by the said family and their associates during their 2015-16 acquisition of the operations of OCH Limited”.

“The further delictual claim for damages pertains to the payments that were unlawfully made to Trillian by Eskom executives.

“The defendants are former Eskom employees Brian Molefe [group chief executive officer], Anoj Singh [chief financial officer], Matshela Moses Koko [group executive: generation and former acting group chief executive officer], as well as Suzanne Margaret Daniels [company secretary and group legal head].

“Eskom also seeks damages against nonexecutive directors Baldwin Ben Ngubane [board chair], Chwayita Mabude [board member], Mark Vivian Pamensky [board member], Mosebenzi Zwane [former government minister of mineral resources], Salim Aziz Essa, Rajesh Tony Gupta; Atul Gupta and Ajay Gupta.”

Eskom said the former executives and board members breached their fiduciary duty of care and good faith to Eskom.

They acted in a concerted state capture effort with some members of the Gupta family, including Mosebenzi Zwane and Salim Aziz Essa, to illegally divert funds from Eskom.

“The Gupta brothers owned the majority shares in entities [Oakbay Investments Limited and Fidelity Enterprises Limited] that in turn owned the majority shares in Tegeta Resources and Exploration.

“These 12 defendants acted in a concerted effort whose objective was the corrupt, alternatively irregular, diversion of resources from Eskom.

“As a result of their actions in the acquisition of OCH during this period, Eskom suffered at least R3.8 billion in losses which it is legally obliged and morally burdened to recover, together with the interest thereon.”

As Eskom and the SIU continue investigations into numerous contracts at Eskom under proclamation of R11 of 2018, the labelled Gupta brothers were reported to be in Dubai dodging a plethora of allegations into state capture.

Lawson Naidoo, the executive director of the Council for the Advancement of the South African Constitution, echoed Duvenage’s sentiment.

“This has been highlighted as an issue for some time now,” Naidoo said.

“It’s certainly a demonstration that the new governance structure at Eskom is committed to dealing with corruption and recouping monies that have been stolen.” – gopolangm@citizen. co.za, additional reporting by Bernadette Wicks

Eskom is doing what it should be doing