Eskom

Cautious Zondo sticks his neck out on Eskom (just a bit…

By Erin Bates 14 September 2020

 Deputy Chief Justice Judge Raymond Zondo. (Photo: Gallo Images / Financial Mail / Freddy Mavunda)

The long-suffering chairperson of the State Capture inquiry has begun to hint at what he may find in his final report. This comes as the inquiry returned its attention to graft at Eskom. It’s about time, with six months left for public hearings.

The State Capture inquiry needs to regain a grip on its terms of reference since it is running out of time. A court-ordered deadline for public sittings is six months away, and Friday, 11 September 2020 marked the 266th day of hearings.

We saw a flicker of renewed focus in the past week as hearings returned to Eskom, a centrepiece in the State Capture racket. Former Public Protector, Advocate Thuli Madonsela stipulated the scope of the inquiry in her “State of Capture” report in 2016. The original Terms of Reference emphasised graft at SOEs, but Madonsela claims that focus was lost with the introduction of Bosasa.

Thuli Madonsela.

“The reason we wanted a commission of inquiry was with a view to having something that was going to be prompt and rigorous,” said former Public Protector Thuli Madonsela on eNCA. Prompt, it was not. Rigorous, it may yet prove to be.

Eskom forms one of the most important focus areas for the inquiry. It ropes in the former president Jacob Zuma and his son Duduzane, government ministers, the Guptas, McKinsey & Company, Tegeta, Regiments Capital, Trillian and Salim Essa, to name a few. 

During last week’s hearings on the parastatal, Chairperson Deputy Chief Justice Raymond Zondo demonstrated a material shift in his thinking. Zondo has a reputation in some legal circles for being painstakingly slow. 

He is methodical (which may prove to be to the inquiry’s benefit long-term) and deliberate. In contrast with his superior, Chief Justice Mogoeng Mogoeng, outbursts of soliloquy are rare from Zondo. 

Change is afoot, however. Zondo has begun to air his musings on what findings he may make in his final State Capture Inquiry report. While careful to couch the remarks as hypothetical and subject to change, Zondo is beginning to signal where he is headed.

For instance, it struck Zondo as peculiar that former Eskom board chairperson Zola Tsotsi agreed to cancel a board meeting after he received a call from the then head of state.

“There was no indication that the president was meant to be part of that meeting,” said Zondo. “So, why would somebody who is not meant to attend that meeting seek to have a meeting of other people cancelled? I found it strange.”

On Thursday last week, Zondo raised the prospect of a scheme hatched outside Eskom to replace its executives.

“I don’t know what conclusion I will reach when I have heard all the evidence, but it is possible that there may have been (a plan) made somewhere outside of Eskom to get rid of these executives and this plan was sold to the board,” he said.

“It becomes quite interesting that of all these executives Mr Koko is the only one who is allowed back and there are allegations that Mr Koko had some association with either the Guptas or associates of the Guptas,” added Zondo.

The chairperson also lashed out over Eskom’s use of consultant Nick Lennell, who Tsotsi brought into a board meeting. Lennell, who is an associate of Dudu Myeni, provided input on an Eskom press statement on the four executives’ suspension. 

“You should have wanted to have nothing to do with him,” said Zondo, leaning forward. “You should have from the beginning said to Mr Tsotsi, ‘You can’t do this. You can’t taint the board’s process by bringing somebody irregularly here. Have you gone through the processes? If you haven’t why are you bringing somebody to the board in breach of the processes of the company? We won’t taint our processes with somebody you bring in like this here.’ That’s what you should have done if you had a problem, isn’t it?”

 Light my Eskom fire

Former Eskom chairperson Ben Ngubane testifies at the State Capture Inquiry in Johannesburg on 11 September 2020. (Photo: Gallo Images / Luba Lesolle)

 So sparks flew at the inquiry on Friday, 11 September 2020 at the mention of an alleged “sexual escapade” involving an Eskom executive said to be caught on camera. Spoiler alert: no video was furnished. If nothing else, the lurid claim shows Eskom’s boardroom was a pit of vipers in 2015.

Former board chairperson Dr Ben Ngubane detailed allegations of wrongdoing by Eskom executives he claims his predecessor Zola Tsotsi raised in a board meeting on 9 March 2015. Tsotsi raised the claims, said Ngubane, in a bid to persuade the board to suspend the four.

“He said Mr Matshela Koko was caught on camera in a sexual escapade with a fellow employee at Eskom,” testified Ngubane, who characterised the allegation as spurious.

“I presume by that stage the board had started to doubt Mr Tsotsi’s credibility because everyone said: well, show us the papers, show us the report because these are serious allegations before we suspend the executives.”

However, the remarks Ngubane reported Tsotsi made in the board meeting do not appear in the official minutes Ngubane himself signed. Evidence leader advocate Pule Seleka SC noted they were absent from (incomplete) audio of the board meeting now held by the commission.

Former board member Venete Klein, who testified the day before, supported Ngubane’s report of suspicion the board harboured towards Tsotsi.

“By this time there was a level of mistrust that was now starting to rear its head,” said Klein.

Klein raised a meeting Tsotsi reported he attended, after then SAA board chair Dudu Myeni called him to arrange a meeting with then-president Jacob Zuma, the day before the board meeting of 9 March 2015.

According to Tsotsi, Myeni steered the meeting with Zuma, which was held at the official presidential residence in KwaZulu-Natal.

“The discussion was primarily led by her as to what are the issues that are causing the concern with the performance of Eskom,” said Tsotsi.

In sync with what Tsotsi said previously in Parliament, he credited Myeni with the idea of launching an inquiry into Eskom executives. Tsotsi claimed Myeni advised that executives should be suspended pending findings.

Klein said of Tsotsi’s remarks in the board meeting on 9 March 2015, “Now you’re coming and you’re telling us you’re going to suspend four people. We can’t just suspend people unilaterally.”

Klein detailed board members’ resistance to summarily suspending executives without grounds, which she said prompted Tsotsi to raise allegations against each of them.

“You had a ‘war room’ telling you what you could and couldn’t do. You had the minister calling and telling us from day one and she said it here again, you must turn this business around. You’ve got a chairperson telling you these people have done all these things wrong,” said Klein.

She later reported she felt bullied by Tsotsi from the moment she joined Eskom as a non-executive director in December 2014. The board was under immense pressure, too. Rating agency Moody’s downgraded Eskom’s outlook from stable to negative on 6 November 2014. Klein recalled “people were dumping Eskom bonds dime-a-dozen” and in her view, the suspensions prompted a second downgrade.

Klein and Ngubane told Zondo that Tsotsi promised a report on the allegations against the executives which never materialised. “He didn’t give us a report so then the board took that decision of approaching the shareholder to hear her view on the suspension,” said Ngubane.

The shareholder was then minister of public enterprises, Lynne Brown, who Tsotsi implicated in his evidence. Brown provided an affidavit to the inquiry. In it, she denies meeting Tsotsi at her official residence in Pretoria with Salim Essa and Rajesh “Tony” Gupta present in order to discuss candidates for the December 2014 board.

Among the members appointed: Klein, Ngubane, Tsotsi and Chwayita Mabude. During Tsotsi’s testimony, Seleka introduced audio of Mabude warning board members against drawing Zuma into Eskom’s fray.

In the recording of a board meeting, Mabude said:

“We need to take ownership of the process. He [Zuma] might have been shady. The minister (Brown) might have given us guidance, but she cannot own this process. We need to own it.”

Isn’t it ironic?

There was a stark irony in Ngubane testifying on Eskom at the State Capture Inquiry. In 2016, he was a vociferous critic of the report which gave rise to the process. Ngubane and colleagues at Eskom slated Madonsela over her methodology in the “State of Capture” report. His posture before Zondo was opposite: Ngubane appeared fairly measured and pliant.

Four years ago, then Eskom CEO Brian Molefe and Ngubane lamented not having had meetings with Madonsela during which they would have explained themselves. Other correspondence occurred, however, with Madonsela sending written questions and Eskom providing various files at the 11th hour.

Last week on eNCA, Madonsela said the inquiry was important for justice, fairness and completeness.

“Some of the allegations had not been investigated conclusively and the accused persons had not given us their side of the story,” she said. “Even though they played hide and seek, it seemed to be fair given the importance of the matter to give them a second bite.” 

Load shedding tears

One day after the North Gauteng High Court ordered the release of the former public protector’s “State of Capture” report, Eskom held an unforgettable press conference on 3 November 2016. The term Saxonwold shebeen entered South Africa’s political lexicon, and Molefe was moved to tears.

Ngubane joined seniors at Megawatt Park for the release of interim financial results and Madonsela’s report was off the agenda. Unsurprisingly, that position did not hold.

“I would like to say Thuli Madonsela has dealt a deathly blow to Eskom and to South Africa,” said a livid Ngubane.

After the press conference,  Ngubane spoke to SABC journalist Liabo Setho.

“I consider this a watershed moment for South Africa,” he began. “We have been, over the past few years, sliding slowly along this dangerous slope. Someone makes a report, it’s not properly investigated. Reports are written that condemn people, that pass judgments without due process.”

Ngubane bemoaned the timing of the report’s release:

“Why couldn’t she have left it to the new Public Protector who would call us and say there are these charges against you, what do you say?” he asked.

During that press conference, Ngubane warned that losing Molefe would be to the detriment of Eskom and the country. “If that happens Thuli Madonsela must take the blame because Eskom has recovered in an incredible way,” he chided.

On this point, Ngubane was consistent between 2016 and 2020. He sang Molefe’s praises at the State Capture Inquiry while justifying Brown seconding Molefe from Transnet to Eskom. Ngubane cited Molefe’s apparent triumphs at the Public Investment Corporation (PIC) and Transnet.

Ngubane waved away Sekuma’s mention of the 1,064 locomotive deal at Transnet, arranged while Molefe was CEO. “It never arose and I don’t think any one of us had an in-depth knowledge of this,” said Ngubane. “It never featured as a negative in any discussion.”

As recorded in a Daily Maverick report, “Trillian Asset Management, a company under the umbrella of Trillian Capital Partners (Gupta kingpin Salim Essa previously owned a majority stake in it) would also bag millions of rands, allegedly for having done no work on the [locomotive] deal.”

Ngubane described Molefe as a gregarious Eskom CEO, quite distinct from the man in tears at the 3 November 2016 briefing.

“I went with him to some of the power stations. Whenever he appeared people were applauding, clapping and he came there into the centre of the room, dance, sing. You know it was incredible and it just changed so that within eight months there was no more load shedding,” said Ngubane.

Ngubane sought to exonerate his association with the Gupta brothers and their kingpin, Salim Essa. Ngubane shunned any association between Essa and the infoportal@zoho.com email address (with which he and Suzanne Daniels corresponded from their private email accounts regarding sensitive Eskom matters). Ngubane rubbished claims of a larger conspiracy at Eskom:

“We are not so sophisticated as to plan, to conspire. If people did that, well, I was not part of it.”

Speaking in Parliament on 7 March 2018, Ngubane claimed that Eskom’s board believed a hurried R659-million payment from Eskom in Tegeta’s favour “was for the pre-purchase of coal from Optimum Coal Mine” and only later did Eskom management “discover” it was converted into a guarantee.

Ngubane has also faced scrutiny over a R13-million payout to Molefe, which a court found invalid. The suspension of four executives (which was the topic of intense discussion during Friday’s sitting) cost Eskom about R18-million in settlements. Zondo found it curious that the parastatal should pay executives if, as Ngubane claimed, the board wanted them to return after the inquiry.

That’s preposterous!

Moreover, former mineral resources minister Ngoako Ramatlhodi implicated Ngubane in Tegeta’s acquisition of Optimum Coal Mine. Ramathlodi told Zondo that Ngubane was among those who pressed him to withdraw Glencore’s mining licences, around the time Tegeta was vying for Optimum.

Ngubane has previously denied Ramatlhodi’s version. On 16 May 2017, he said:

“We can’t instruct a minister what to do. We take our problems to ministers, we ask for help. We have done that with the Treasury, with our own minister, with DOE, with DMR when we have problems. Now, for a minister to claim that we actually made him take a decision about something is preposterous.”

Similarly preposterous is Ngubane’s rendition of his own ignorance of a bigger political scheme involving Zuma and the Guptas, when he was the chair of Eskom’s board. He will continue testimony before Zondo at an undisclosed date. 

Eskom’s former head of legal and compliance Suzanne Daniels, who worked closely with Ngubane, is set to testify on Tuesday 15 September 2020. DM

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