Eskom has work cut out in bid to recover looted R15bn

ESKOM has its work cut out to recover R15 billion lost to state capture after Chief Justice Raymond Zondo last week released a report detailing the extent of corruption that has bought the power utility to its knees.

It needs every cent to add to its kitty as it staggers under a massive debt burden of R392bn. This as it struggles to keep the lights on, spending billions on diesel recently amid bad weather and infrastructure breakdowns.

Eskom, in a response to the fourth edition of Judge Zondo’s report on state capture, said that it had already taken steps to recover funds irregularly paid out to various suppliers and had over time recovered R1.1bn from McKinsey, R1.577bn from ABB, as well as from several other significant cases.

Eskom said it had furthermore initiated civil action to recover some of the money lost to state capture, including R3.8bn in damages suffered by Eskom due to unlawful actions by those implicated in state capture.

The entity was also studying the report to identify whether there are implicated individuals still in its employ and would take appropriate action as required in line with its policies.

This is in addition to the numerous criminal cases registered with the SAPS over the years and disciplinary action taken against its employees implicated in the irregularities.

“Eskom has proactively set up a project team, supported by its internal and external lawyers, to ensure that the report is reviewed, understood and appropriate actions are taken to address recommendations made therein and to protect Eskom’s interests,” it said.

Justice Zondo’s report points to roles played by former Eskom chief executive Brian Molefe, former chief engineer for generation and acting CEO Matshela Koko, as well as former chief financial officer Anoj Singh.

A large part of the capture exercise involved fraudulent procurement of coal for Eskom’s power stations, mainly the Majuba power station, which was ring-fenced by Tegeta as a cash cow for inappropriate product with exaggerated invoices.

Eskom board chairperson Professor Malegapuru Makgoba said, “State Capture and its agents caused immense harm to Eskom over many years. We view the release of the commission’s report as an important step to ensure that more of those who undermined Eskom are brought to book, and we look forward to working with the National Prosecuting Authority to ensure that the miscreants speedily face criminal charges.”

In April credit rating agency Moody’s kept its rating of Eskom at Caa1 with a negative outlook and warned that the power utility needed to reduce its debt burden and solve its operational issues.

The agency flagged that it had received equity injections from the government of roughly R137bn over the past three years. The government had also committed to provide further support to Eskom of R88bn over the four years to March 2026. The finances are stabilising under the management of its CEO Andre de Ruyter, who is trying to return Eskom to health.

In December Eskom reported a 4 000 percent improvement in net profit for the six months ended in September.