No free pass for Eskom’s Mr Fix-It, Jabu Mabuza

The average company has some four or five Board meetings a year. Eskom has had 61, each at a total of around eight hours, since January 2018.

That means nearly 500 hours of meetings to try and undo the effects of years of graft and malfeasance at State Capture’s “main theatre”.

This was how Eskom chairman, Jabu Mabuza, described the country’s power utility when he testified before the State Capture Commission of Inquiry on Friday.

He pointed out the excessive number of Board meetings, not so much because he minds the work, but rather, to illustrate the extent of non-executive intervention required to steer Eskom back to the straight and narrow.

Mabuza is widely expected to drop a few bombshells during his testimony, set to continue on Monday, but former executive, Matshela Koko, received an early mention on Friday.

The former acting CEO resigned before facing a disciplinary inquiry on a range of charges including a flood of emails he allegedly sent to the controversial Gupta-linked email address, [email protected].

Those, Mabuza said, included highly confidential Eskom documents, draft statements and contractual documents and spreadsheets.

They related to among other things, McKinsey & Co’s Top Engineers project at Eskom, the Gupta-owned Tegeta and Optimum Coal.

Mabuza’s testimony came on the back of significant and costly load-shedding last week and, it was marked by a push by the State Capture Commission’s legal team to determine precisely what the new Board has done about recommendations from a litany of investigative reports into Eskom.

Those, Mabuza said, were all getting attention, adding that some matters have been reported to the Hawks and Special Investigating Unit (SIU) while further plans are afoot to recover “stolen” money from implicated directors or staff.

As at August 2018, the Board disbanded and reconfigured the duties of a controversial bid tender committee (BTC) that traditionally handled deals in excess of R750-million.

“The new Board does not adjudicate tenders,” Mabuza said.

Allegations of State Capture, he said, had beset the previous BTC which ended up deliberating lucrative deals instead of merely playing an oversight role – among those the Gupta-linked deals at Eskom.

Mabuza highlighted a few examples he encountered since his appointment last January, such as  a R1-billion fuel deal that had been recommended for award to a company set up just a week before the tender deadline.

The company, he said, had previously only done work to the value of R10-million and it turned out that the Eskom employee who was responsible for this submission had been on suspension on an unrelated matter.

That in itself, ought to have raised red-flags, but didn’t until he asked tough questions.

He said it has since been found that the CEO of Eskom did not sit on the BTC, nor an executive tender committee – meaning that he/she would hear about major purchases for the first time at Board meetings.

As a result, and in order to ensure accountability, this has now been changed to ensure the current CEO, Phakamani Hadebe, has access to such information ahead of time.

Mabuza suggested that Eskom’s procurement arena was in dire need of a clean-up.

“Procurement is the game, but corruption is the name,” he said.

The Commission’s senior advocate, Vincent Maleka, asked him what Eskom has done to give effect to its statutory and corporate obligations in terms of recommendations flowing from various investigative reports into big-money deals.

Those include questionable deals involving global consulting firm, McKinsey & Co, its supplier development partner, Trillian Capital Partners and Tegeta.

Some actions, he said, were initiated by Eskom ahead of the arrival of the new Board, while others continue.

He listed the suspension of former acting CEO, Sean Maritz, among steps taken by the new Board. Maritz jumped ship and resigned when presented with charges relating to him allegedly having withheld crucial information from Mabuza and Hadebe during a hand-over meeting after he was replaced by Hadebe.

Those charges included acts of alleged serious misconduct or gross negligence because he had committed Eskom to the immediate payment of R340-million in a deal involving a 1.5-billion USD loan from China-based company.

Huarong, the agent, was meant to pocket R340-million in fees but this was blocked when Mabuza and his new team discovered it.

Further evidence is expected to be presented this next week and Mabuza told the Commission that Maritz, when confronted about it, claimed he had been told to sign the fee agreement by former Eskom CFO, Anoj Singh, then already on suspension.

The deal had been freshly signed and this had made it problematic to accept that Maritz had simply forgotten to tell them about it, Mabuza said.

This matter has since been handed to the SIU and the Hawks for possible criminal investigations.

“We have since received letters of demand from Huarong. We have told them we don’t owe them anything.”

The chairman (of the company) in China recently asked him for a “coffee,” but Mabuza said he declined as Eskom firstly, didn’t take the loan and didn’t owe the intended middleman a penny.

Before diving into the hard-hitting evidence, the Commission interrogated the circumstances around Mabuza’s own appointment, the timing of his declaration of interest and his shareholding in a private company, Sphere Holdings.

On this front, Mabuza testified that he resigned as chairman of Sphere 24 hours after accepting the Eskom job.

And, that his investment in the company, R26-million upon acquisition, is being moved to a blind trust to avoid any conflict of interest.

Mabuza told the Commission he didn’t mind presenting details of the declaration of interest he submitted soon after his appointment as he has accepted that in view of the position he now holds at Eskom, he would have very little privacy.

He also volunteered information about two subsidiaries, Honeywell and Babcock, one of which he said, maintained a third of Eskom’s boilers.

His testimony continues on Monday and will be followed by that of several other Eskom witnesses. DM

SIDEBAR: Zondo inquiry Statement on Bosasa security link

The State Capture Commission of Inquiry's own Bosasa debacle has been resolved. It emerged last year that GTS, a company contracted to provide security services at the current home of the Commission in Parktown, Johannesburg, was a subsidiary of the corruption-accused facilities management company.

The Commission has heard weeks of testimony by several former Bosasa big wigs, including Angelo Agrizzi, about a shocking monthly bribery system of between R4-million and R6-million to secure and retain lucrative government contracts. 

The Commission's investigation into the appointment of the company has now been concluded and its services, terminated. Herewith the State Capture Commission's full statement on the matter: ZondoBosasaSecurity. DM