State-owned power utility Eskom and the Special Investigating Unit (SIU) on August 3 issued summonses in the North Gauteng High Court to recover funds from former Eskom executives, board members and members of the Gupta family and their associates, as well as others.
"The funds were lost in a concerted effort corruptly to divert financial resources from Eskom, to improperly and illegally benefit the Gupta family and entities controlled by it and their associates during their 2015/16 acquisition of the operations of Optimum Coal Holdings (OCH).
"This delictual claim for damages that Eskom suffered relates to the recovery of about R3.8-billion in funds illegally diverted from Eskom to help the Gupta family and its associates to acquire the operations of OCH, which owned the Optimum Coal Mining that supplied the Hendrina power station with coal.
"The further delictual claim for damages pertains to the payments that were unlawfully made to Trillian by Eskom executives," the utility stated in a media release.
The defendants are former Eskom employees, including former group CEO Brian Molefe, former CFO Anoj Singh, former generation group executive and former acting group CEO Matshela Moses Koko and former company secretary and group legal head Suzanne Daniels.
Eskom is also seeking damages against former nonexecutive directors, including Baldwin Ben Ngubane, Chwayita Mabude and Mark Vivian Pamensky, as well as former Mineral Resources Minister Mosebenzi Zwane.
It is further seeking damages from Gupta-linked cohorts, Salim Aziz Essa and the “Gupta brothers” − Rajesh, Atul and Ajay.
Eskom alleges that all of the former executives and board members breached their fiduciary duty of care and good faith to Eskom and acted in a concerted State capture effort with the Gupta brothers, Zwane and Essa, to illegally divert funds from Eskom.
The Gupta brothers owned the majority of shares in entities – including Oakbay Investments and Fidelity Enterprises – that in turn owned the majority of shares in Tegeta Resources and Exploration, which bought the Optimum mine from diversified miner Glencore in 2015.
The Gupta brothers and Essa are currently fugitives from justice in South Africa and are based in Dubai.
Eskom states that the 12 defendants "acted in a concerted effort [in 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," the utility states.
Eskom continues to review major contracts concluded over the years. Where any evidence of corruption or other irregularities have been discovered, Eskom has a moral and legal duty to cancel those contracts and to recoup any losses it may have suffered as a result of any illegal or irregular activity.
The SIU is investigating numerous contracts at Eskom under Proclamation R11 of 2018.