THE ISSUE: Brian Molefe has agreed to return to Eskom as its chief executive on Monday, after the board rescinded his application for early retirement, Eskom board spokesperson Khulani Qoma confirmed on Friday. READ THE BREAKING STORY.
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12 May 2017
Brian Molefe to open African Utility Week
Organisers of African Utility Week sent out a statement indicating
Molefe will deliver the welcome address of the conference and expo on
Tuesday. This is touted to be one of Molefe’s first public appearances
since returning to the power utility.
The conference will host
over 7 000 energy and water experts from over 80 countries, in Cape
Town. Other speakers include Eskom board chairperson Ben Ngubane and
Public Enterprise Minister Lynne Brown. The conference will focus on
addressing challenges and opportunities in power and water sectors.
The rapid rescission of the resignation of Eskom CEO Brian Molefe is
another example of President Jacob Zuma going rogue on the governing
party he heads, writes Ferial Haffajee.
Brian Molefe must be considered innocent until proven
guilty, Minister of Public Enterprises Lynne Brown reiterated as she defended
Molefe's reinstatement as Eskom CEO.
On Friday it emerged that
Molefe resigned as ANC MP to return to the post he left in November 2016 after
he was linked to President Jacob Zuma's controversial friends in the business
world, the Guptas.
Molefe then said he will leave Eskom in “the interests of
the company and good corporate governance". Asked about this statement,
Brown said at a press conference at Parliament she would not know what Molefe
was thinking at the time.
The news of Molefe's
reinstatement was met with an outcry, with even the ANC weighing in with a
strongly worded statement condemning the "unfortunate and reckless"
move.
When pressed on the view of the party on whose NEC she sits, Brown didn't
want to respond because she didn't want to pre-empt the meeting with the ANC
which will follow.
WATCH: Tegeta, tears and triumphs - Brian Molefe's full circle
MP Brian Molefe is set to return to Eskom as its chief executive on
Monday, as the board has rescinded his application for early retirement -
sparking outrage from opposition parties and even members within the ANC.
Civic organisations Corruption Watch and OUTA have written letters challenging the reinstatement of Brian Molefe as Eskom CEO.
Fin24 reported on Friday
that Molefe will return to Eskom, following the board’s decision to
rescind his application for early retirement submitted in November 2016.
Public Enterprise Minister Lynne Brown had objected to a R30m pension
pay out for Molefe, as he was already paid a performance bonus.
Several
organisations and political parties have expressed their disappointment
in Molefe’s reinstatement by the power utility.
The ANC has called it “unfortunate and reckless”, while the CEO Initiative and Business Unity South Africa (BUSA) have highlighted that it might influence investor confidence.
@Fin24 No! No no no! He was mentioned in the PP report! Had compromised relations with the guptas! He's rotten!
— Heinrich Abrahams (@TheWorldofHein) May 12, 2017
12 May 2017
Molefe's Eskom return better than R30m payout - Brown
Reinstating Brian Molefe in his old job at Eskom was better than paying
out the proposed R30m pension he wanted, says Public Enterprises
Minister Lynne Brown.
'In terms of the Eskom board's proposal Mr Molefe agreed to serve out
the remainder of his original contract and to reconsider his contract I
objected to,'' Brown said at a press conference to elaborate on the
unusual move.
''The board's proposal I believe is a better value proposition for the SA fiscus than the previous proposal.''
EE Publishers MD Chris Yelland reports that Eskom's legal department confirms there are a number of legal actions under way to prevent Brian Molefe's return as CEO. It also said Brian Molefe "did NOT resign as Eskom CEO - he submitted application for early retirement & media misinterpreted his statement."
12 May 2017
Corruption Watch has written to Eskom chairperson Ben Ngubane and Public
Enterprises Minister Lynne Brown demanding copies of correspondence between
Ngubane, Brian Molefe and Brown that pertains to this decision. We are
considering our legal options in relation to the board’s decision.
See the letter below:
12 May 2017
'We are taking the matter to court' - EFF's Julius Malema on Brian Molefe.
12 May 2017
Brian Molefe’s reinstatement will intensify the negative impact of the downgrade, says the CEO Initiative. Similarly Business Unity South Africa (BUSA) said Eskom’s decision is “not in line with the expected levels of accountability and ethical leadership”.
OUTA has written a letter of demand to Public Enterprises Minister Lynne Brown regarding Brian Molefe's reappointment as Eskom CEO. Read the full letter below:
Brown: The cloud we have over SOEs is the fact that they are being viewed as being captured and particularly by the Guptas. If you push me I will probably tell me that I do have a plan - now my officials will be really angry with me! but I think we must look at costs (including pre-payments etc) and then the bottom short term which Tegeta falls under - must be clarified once and for all.
The second issue would be the issue of the quality of coal. We just had a case where the quality of coal was not up to standard - I won't name the company. Those kinds of things are important matters but it becomes very technical so we have to specify. I will ask the company doing the report on Koko to complete its findings and present to me so I can ask them questions.
Media briefing ends.
12 May 2017
12 May 2017
Brown: I would really like to believe that you get better answers and more answers when the board sits next to me and you can ask them the questions [next week] - I want them to do their job - maybe you will then get a better picture. Regarding Tegeta: there have been a number of investigations - I am waiting for the final investigation from National Treasury - that will put the lid on it. That draft report was sent to Scopa before Eskom had an opportunity to look at it. I would like to do the investigation but I have to wait because the president is the one who has the prerogative to institute a judicial commission of inquiry.
12 May 2017
There have never been more investigations into poor governance & corruption at #Eskom, most under Brian Molefe's watch. And now he's back! https://t.co/gXqMHEmBn5
Lynne Brown points to ex-War Room member Anton Eberhard regarding the below tweet. She said it is not true that most of the investigations into Eskom occurred while Brian Molefe was CEO in 2015 and 2016.
12 May 2017
Brown: There are many other things I can say about it - I do not want you to think I do not regard your outrage [to the media]. I don't Tweet.
12 May 2017
Brown: I would hope that I take my principles into everything I do and I like to believe that I do that. It is managing a portfolio which I do not run operationally each of the companies - but what keeps me sane is that there is a process that looks at each one and we need to look at what we need to do with the SOEs in the future. There are many examples in the world of where it is either placed in a vehicle outside of Government where Government remains a shareholder - it is very complex to find that a company is doing something and they are actually allowed to do so in terms of the companies act.
12 May 2017
Brown: Court has taken Eskom out of the nuclear matter - it does not have a role to play in it. I dont think one person - it is a decision of government - and I dont think one person will be able to sway on it either way.
12 May 2017
Brown: Can I trust the Eskom board? It does not take one issue to convince me - I know what I came into when I first came into this portfolio. There was not going to be money for Eskom but today I really have a sustainable company Eskom. Three years later I am very pleased that we have been able to meet all the targets set - that does not of course take away the fact that there have been long delays before. I am soon going to the Eskom AGM. We have a board evaluation (an external evaluation) as part of the AGM preparation process and that will determine many things as well.
12 May 2017
Brown: The issue is: do I have problems of governance? I have problems of governance with all the SOEs - I think we can always do better. I would not know what Molefe was thinking when he said he was resigning for good governance.
12 May 2017
Brown is told by a reporter that an analyst said Molefe is to Eskom like nuclear is to government.
12 May 2017
12 May 2017
Brown: Eskom does not have a right to oppose IPPs - but must remain viable and sustainable. It is just time to balance the energy mix.
12 May 2017
Brown: The issue for me is that there isn't another solution other than paying Mr Molefe R30m - other than going to court. In terms of the previous [agreement with Molefe] Eskom was in the right to negotiate a pension. It is negotiated in terms of the Eskom Pension Fund. Having said this - I said it earlier - I do not think Eskom is out of control, in fact I think it is in a much better position.
12 May 2017
Brown: I don't want to pre-empt a meeting the ANC is going to call me to so I do not want to answer the question whether my statements are in contrast to the ANC statement issued regarding Molefe's return. I am bringing Molefe back on the basis of the board having gone back to re-evaluate the pension after I declined the R30m. I have never said that I do not understand the outrage. I understand it and that is why I am sitting before you (the media) today.
12 May 2017
Brown: I think the outrage we have sometimes is quite personal - when I saw the R30m I even had a personal feeling about it. But I am trying to be as objective as possible. I say: you come back, you do your job, then I give you my support. In 2.5 years Molefe will get the pension he will get for 5 years employment. Remember I declined the R30m - so he would have to get a pension in line with his 5 years of employment - this is done in terms of the pension fund - the national pension fund and that is how they arrived at the R30m. It is governed by the Pension Fund Act.
12 May 2017
Public Enterprises Minister Lynne Brown in Cape Town on Friday.
12 May 2017
Brown: I think Eskom itself is quite sustainable and I feel (acting Eskom CEO Matshela) Koko has done well to willingly step down.
12 May 2017
Brown: Eskom has given me an assurance that within 5 years it will reduce its reliance by almost R100bn. Those are matters that cannot be scoffed at. It shows a company actually quite resilient.
12 May 2017
Brown: I am not sure if Mr Molefe has been cleared, I cannot make a prediction if he will remain or not. All we can do as team SA is to put our best foot forward with credit agencies. I know that credit agencies won't be able to fault Eskom.
12 May 2017
Brown: Regarding bonus payments - they have not had bonus payments for 3 years - they have short and long term incentives that they invest in in the company. They have not had a bonus under my watch. Last year they had 4.2% across the board increase. I am not sure if I will be here in 2.5 years' time.
Brown: The fact that the board assured me that it is a legal process, I accepted that Mr Molefe will be in the employ of Eskom until the end of his contract. I still think that is a better proposition than paying Mr Molefe R30m.
12 May 2017
Brown: Therefore, in many of these areas I would bring in the board as well - and I will bring the board next week - to tell their side.
12 May 2017
Brown: State-owned companies operate under the Companies Act - where the shareholder appoints a board to exercise its responsibility on its behalf. So when the board acts, it acts within the broad policy of the state and not necessarily in constant consultation with the shareholder.
12 May 2017
Brown: In the rewriting of the regulations, the board will not be able to negotiate such a settlement anymore. Has government been hijacked? This is a very complex matter.
12 May 2017
12 May 2017
Brown: Under the previous agreement between the shareholder and the board, under the Companies Act then, the board had a right to negotiate a settlement.
12 May 2017
Brown: 2.5 years ago SA was in load shedding, while it clocks profits now. When Mr Molefe has been declared guilty or not, then we can decide if his return has been ethical or not.
12 May 2017
Brown: Mr Molefe was the person who brought Eskom where it is today after 3 years. He was paid do the maintenance and paid to keep the lights on but I can tell you three years ago I really did not know the lights were going to go on.
12 May 2017
Brown: The outrage in the public space has been that Mr Molefe has been accused of having been captured and so he therefore cannot go back to Eskom. It is an ethical outcry but the man has not been found guilty yet. He must be seen as innocent until found guilty. I know the prerogative rests with the president for an investigation. Mr Molefe's contract is still about 2.5 years to go.
12 May 2017
Brown: The issue for me is that there is an outrage and it is about the State of Capture Report. It makes one recommendation and that is for further investigation and until the president uses his prerogative and calls a commission of inquiry or there is some other investigation, Mr Molefe is not guilty of anything yet.
12 May 2017
Brown: There is a public narrative that says Eskom is in an exceptionally bad shape and that there is a possibility of another downgrade - but Eskom has been able to cover its loan programme by 90%. Eskom is financially sustainable.
12 May 2017
Question time:
Bloomberg: Surely Cabinet has to be informed of Molefe decision - how long was his original term for?
Daily Maverick: Effectively the calculation to say it is cheaper for SA to keep Brian Molefe at Eskom than to pay him R30m - isn't that a case of Government being hijacked?
12 May 2017
Brown: Clouds of unproven allegations and counter-allegations are doing SOEs a disservice.