Arguably one of the most telling statements made at last week’s Eskom results presentation was the public assurance given by interim CEO Johnny Dladla, when he stated: “No decision would, in future, be taken outside the executive committee meetings. Whatever decision is taken, it will be a decision that is documented and we have applied our minds to it. There will be no decisions that are taken in some corners, or by individuals, without having been debated and decided on by the executive committee.” What can be read into this statement is that, hitherto, certain individuals were indeed making decisions in “some corners”, which were neither debated nor documented by the executive committee, which has arguably allowed a certain predatory elite to turn Eskom into their own piggy- bank, leaving the 94-year-old organisation’s reputation in tatters.
To his credit, Dladla did not seek to hide behind the fact that he had only been in the position for 21 days. He opened his presentation by acknowledging Eskom’s reputational collapse and did not suppress hostile media questioning during the marathon session at Megawatt Park. Still, all present left with as many questions as answers.
How was it possible for Eskom to have paid the Gupta-family-linked consulting firm, Trillian, R495-million, despite having never entered into a direct contract with the company? Eskom claims Trillian was paid as a subcontractor to McKinsey, which itself pocketed R900-million of the R1.4-billion in fees. It also says it was Mckinsey that asked for Eskom to pay its subcontractor directly. McKinsey flatly rejects this version, stating that it never had a subcontract with Trillian. Both organisations are running separate investigations, which will hopefully shed light on the matter.
Then there are the ongoing questions about the notorious R650-million prepayment to Tegeta, which enabled the Gupta-linked mining company to buy the Optimum mine out of business rescue. Fresh questions are also being asked about an arbitration settlement of R577-million with Tegeta, massively down from Eskom’s original R2.1-billion claim against the previous owner of Optimum, Glencore. Eskom has offered a mind-boggling explanation, suggesting that the installation of a crusher in 2010 resulted in a higher coal-quality rejection rate from Optimum than was justifiable, but that this had only come to light after several years of investigation. To make matters even worse, the utility admitted, for the first time, that it had indeed approved a R1.6-billion guarantee to facilitate the Optimum purchase by Tegeta. The guarantee, about which chairperson Zethembe Khoza claimed to have no recollection, was never used and was subsequently cancelled.
Then, of course, there is the question as to why CFO Anoj Singh has not been suspended. Khoza says the board has found no justification to suspend Singh, despite the fact that he seems to have been intimately involved in both the Tegeta and Trillian affairs and despite having visited Dubai at the Gupta family’s expense. Singh says he is in the process of preparing a “tell-all” document, which will offer details of the visits.
The reputational platform is burning and it is not yet clear that the Minister, the board, or the new executives have the plan and tools to extinguish the blaze.
However, Dladla’s promise that all decisions will be “documented” and will no longer be taken “in some corners” is a good start.