CHAPTER III OF THE INVESTIGATIONS: ESKOM EXECUTIVE SUMMARY 1. THE CSA BETWEEN TEGETA AND ESKOM
1.1. Mboweni, Koko, Nteta and Mabelane contravened the provisions of the Medium Term Mandate and section 57(c) of the PFMA in that they concluded or caused to be concluded, a CSA with an entity which was not 50%+ 1 at the time of conclusion.
1.2. Samples collected by Eskom on June 2014 showed that only Seam 4 lower from Brakfontein complied with the requirements Eskom’s specifications for the Majuba Power Stations. Seam 4 upper from Brakfontein did not comply with Eskom’s specifications Adjustment of CSA duration
1.3. Eskom officials increased the duration of the CSA from five (5) years to ten (10) years, without consultations with legal and the Senior General Manager, Primary Energy Division, Mboweni.
1.4. There is no evidence that the Eskom Executives who concluded the coal supply agreement between Eskom and Tegeta obtained approval to procure beyond the lifespan of the Medium-Term Mandate from the Board.
1.5. Nteta gave preferential treatment to Tegeta by emailing an editable template of a CSA for inputs.
1.6. The conclusion of the CSA with Tegeta prior to conducting successful combustion tests was irregular;
1.7. Eskom continued with blended tests even after various coal analysis results in respect of the blended coal samples, indicated that the blended coal was not suitable for Majuba power station.
1.8. Nteta, Bester and any role player may have contravened section 34 of Prevention and Combating of Corrupt Activities Act. SABS – testing of new samples
1.9. Koko’s conduct in preventing Eskom’s employees from observing the resampling and retesting processes compromised the transparency of the said processes as none of the Eskom officials observed the sampling process.
1.10. The coal samples of 29 August 2015 that passed the SABS analysis was transported from Brakfontein mine by Mpumamanzi. Final report: Forensic investigation into various allegations at Eskom Page iii
1.11. The samples tested by SABS on 29 August 2015 were not from Brakfontein mine due to the significant difference in the samples tested on 29 September 2015 and 6 September 2015
1.12. The integrity of SABS tests results of 30 August 2015 are brought to question in that there are discrepancies in the number of sample bags recorded in Mpumamanzi’s report and the SABS delivery notes.
1.13. By allowing Brakfontein parties to observe the analysis of the coal samples, SABS contravened their own policies and procedures.
1.14. Koko suspended the Tegeta CSA on 31 August a day after he received the SABS’s results on the Brakfontein Coal quality testing which was done on 29 August 2015 and the results thereof provided to Eskom on 30 August 2015. Coal Deliveries from Brakfontein Mine
1.15. Eskom officials gave Tegeta preferential treatment in that they were allowed to commence coal deliveries without any confirmation by Eskom that Tegeta’s coal was compliant with CSA’s coal quality requirements;
1.16. Tegeta failed to meet their quarterly planned quantity requirements, during 2015.
2. OPTIMUM COAL HOLDINGS
2.1. Eskom management prejudiced Glencore by refusing to sign the negotiated CSA, giving advantage to Tegeta to acquire all assets in OCH and which amounted to the abuse of a position of authority, a breach of trust, and a violation of a legal duty or a set of rules in terms of the Prevention and Combating of Criminal Activities Act.
2.2. Eskom management prejudiced Glencore by fining OCM R2.1 billion for supplying allegedly poor-quality coal, which prejudice which amounted to the abuse of a position of authority, a breach of trust, and a violation of a legal duty or a set of rules in terms of the Prevention and Combating of Criminal Activities Act.
2.3. Eskom was prejudiced by the reduction of R2,1 billion penalty imposed for supplying allegedly poor coal quality which amounted to the abuse of a position of authority, a breach of trust, and a violation of a legal duty or a set of rules in terms of the Prevention and Combating of Criminal Activities Act.
2.4. Eskom acted in bad faith when the Company, represented by Koko, refused to waiver the historical penalties levied against OCM which led to OCM going Final report: Forensic investigation into various allegations at Eskom Page iv into business rescue, but reduced the said penalties through arbitration after Tegeta purchased the assets in OCH.
3. PREPAYMENT OF R659 558 079
3.1. Tegeta and Eskom officials (Nteta, Koko, Mabelane, Daniels and Mboweni) discussed the prepayment of R659 558 079.00 well before 11 April 2016; Nteta engaged Tegeta about the prepayment through discussions, telephone calls and emails from at least 8 April 2016;
3.2. Nteta sent an e-mail relating to the Tegeta prepayment to inter alia Koko, on Monday 11 April 2016 at 07:22. It is improbable that the said e-mail was the first time that Koko learnt about the Tegeta prepayment.
3.3. Eskom’s Special Board Tender Committee (“SBTC”) meeting of 11 April 2016 rubber stamped the conditions and terms of the prepayment that were agreed by Eskom and Tegeta officials.
3.4. The SBTC approved the Tegeta prepayment request on 11 April 2016 in a meeting held by teleconference at 21:00;
3.5. The SBTC approved the prepayment before the Tegeta shareholders took a resolution to request the prepayment and provide guarantee, which resolution was taken on 13 April 2016;
3.6. Nteta drafted the letter that was used by Tegeta on 11 April 2016 as an offer to supply additional coal to Eskom;
3.7. Singh and or Eskom did not negotiate the 3.5% discount as the said discount was offered by Tegeta prior to the BTC’s approval of the prepayment;
3.8. Singh misrepresented facts to the Parliamentary Portfolio Committee on Public Enterprises when he indicated that he negotiated the 3.5 % discount as the documents indicate that he did not do so.
3.9. Koko misrepresented facts to the Parliamentary Portfolio Committee on Public Enterprises (refer paragraph 114 of his statement to the Committee) when he indicated that Eskom negotiated the 3.5 % discount as the documents indicate that it was Tegeta that offered the said discount..
3.10. Eskom suffered a loss because it paid R19.68 per gigajoule for six months and later offered R15,50 per gigajoule for the same coal.
3.11. Eskom’s SBTC gave Tegeta preferential treatment in that an urgent SBTC was scheduled and took place at 21:00, with the sole purpose of approving the R659 million prepayment to Tegeta. Final report: Forensic investigation into various allegations at Eskom Page v
3.12. Eskom and Tegeta officials contravened section 34(1) of the Prevention and Combating of Corrupt Activities Act
4. ANALYSIS OF SINGH’S FNB BANK ACCOUNTS
4.1. Singh indicated in his response that all the funds received in his bank account were received in lieu of his employment at Transnet and/or Eskom;
4.2. Singh may have received funds from other sources to service his personal lifestyle as there were minimal transactions in his bank account.
5. VARIOUS REQUESTS TO SINGH TO TRANSFER MONEY OR MAKE PAYMENTS
5.1. Singh claims that the emails were fake and he requested SAPS to investigate the perpetrators who hacked his emails.
6. THE LEAKING OF CONFIDENTIAL INFORMATION AT ESKOM
6.1. One of the allegations which we were required to investigate was the Eskom Executives may have leaked confidential information to third parties through an email styled email@example.com. Koko
6.2. Koko stated that the firstname.lastname@example.org e-mail address was given to him by Daniels on the basis that he (Koko) had to use it for purposes of assisting her to provide information on a day to day to the Chairman (Dr Ngubane?) regarding topical operational aspects of Eskom business. Ngubane
6.3. Ngubane denied any knowledge of an e-mail address styled email@example.com. This regardless of the fact that he forwarded several emails, including Eskom confidential information, to the said e-mail address. Daniels
6.4. Daniels indicated that firstname.lastname@example.org belongs to Seleke. Seleke
6.5. Seleke indicated that he does not have a relationship with the email@example.com email address.