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Did Tegeta receive a 75% discount on Optimum fine?

Jun 23 2017 21:00
Yolandi Groenewald

Johannesburg - Did the Gupta-linked firm Tegeta Exploration & Resources receive a R1,65b discount on a fine it had to pay to Eskom? 

On Friday reporters grilled Public Enterprises minister Lynne Brown and Eskom executives on whether Tegeta, a company owned by the Gupta family and President Jacob Zuma's son Duduzane, managed to get a 75% discount on a fine of R2.15bn.

Brown was questioned during a briefing where she revealed Eskom's four new board member.

Tegeta and Eskom struck a deal in March during arbitration, but Eskom has refused to disclose the details of the agreement, citing a confidentiality agreement.  

READ: Concern about lack of disclosure of Eskom, Tegeta arbitration details

But the state utility didn’t deny the accuracy of the figure when specifically asked at the press conference.

Suzanne Daniels, Eskom’s company secretary, confirmed in the briefing that the state utility had entered into a settlement agreement with Tegeta. But she again emphasised that the arbitration contained a confidentiality clause, which prevented any details of the process being disclosed.

Brown told reporters she had to abide by the law, and would first have to consult legal advisors before speaking out.

“I am not sure what the details of the confidentiality agreement is and as such I have no opinion regarding if I can overstep the arbitration. But I can assure you I will not act outside the law,” she said.

Brown said she represented government as the shareholder over Eskom and appointed a board.

“If there are arbitration laws linked to the operations of the company the board and Eskom executives will deal with it,” she said.

Eskom levied the fine on Optimum’s previous owners, Glencore, after the mine delivered substandard coal. At the time Former CEO Brian Molefe insisted that Eskom would not back down from the full penalty of R2.15bn.

“We cannot shift, we are inflexible,” Molefe said in August 2015 . “Unfortunately Eskom’s financial position and standing does not allow us to waive any penalties, or to renegotiate contracts simply for the sake of rescuing a particular mine.”

Molefe has been fingered in allegedly colluding with Tegeta to force Glencore to sell Optimum, and it is widely believed the hefty fine was used as leverage to force Glencore to sell Optimum. The former group executive denies the allegations.

The struggling Optimum mine eventually went into business rescue and was bought by the Gupta-linked Tegeta. Tegeta then inherited the fine when it bought the mine from Glencore last year, before it was concluded in arbitration.

Share register documents show Zuma’s son, Duduzane, obtained shares in Tegeta Exploration & Resources weeks before it bought Optimum.

READ: Zuma’s son took stake in Tegeta 3 wks before Optimum buy

After ownership passed to Tegeta, Eskom backtracked on its hardline position and opened up to arbitration.

Daniels said arbitration had always been on the table when the fine was levied.

“The matter was always going to be referred. Then Glencore went into business rescue. When it emerged out of business rescue, we went to arbitration.” 

Read Fin24's top stories trending on Twitter:

tegeta  |  eskom  |  brian molefe  |  lynne brown  |  fine  |  optimum  |  coal


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