Guptas deny Eskom pre-payment used to buy Glencore mine | Fin24
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Guptas deny Eskom pre-payment used to buy Glencore mine

Oct 20 2016 17:20

Cape Town – Gupta-owned Oakbay on Thursday denied it used a pre-payment from Eskom to inappropriately fund its acquisition of Optimum from Glencore.

Oakbay was responding to a media query, in which it was speculated that the Optimum’s business rescue practitioners “may have” made these allegations.

It said its subsidiary Tegeta Exploration & Resources – which Jacob Zuma’s son Duduzane had shares in – had bought the seven target companies that were owned by Optimum Coal Holdings.

“Tegeta is not – and has never been – in business rescue,” the company said in a statement. “As such, the structure of Tegeta’s consideration for the target companies, was not within the remit or scope of the business rescue practitioners in any shape or form.

“Tegeta received the pre-payment, not Optimum,” they said.

“There was no need to inform business rescue practitioners as our negotiations with Eskom has no bearing or relevance to them,” they said.

“The coal being supplied by Tegeta was being purchased from Optimum and for which we had separate agreements from time to time and business rescue practitioners, who were in control of the business, were fully aware of this.

“We took the necessary steps to ensure increase in coal supply and even delivered prior to the deadline date.”

Oakbay said Tegeta has not received any notification from any regulatory body that anything untoward has taken place.

Eskom said on Wednesday that prepayment is a common commercial practice that is used widely, and is not unique to Eskom contracts.

“Eskom concluded a contract with Tegeta to supply 1 250 000 tonnes of coal from April to September 2016 and obtained approval to extend the contract with Umsimbithi to supply 540 000 tonnes from June to September 2016,” Eskom said in a statement.

“These two contracts in our view sufficiently addressed the winter shortfall and security of supply risk relating to coal procurement.

“The Eskom contract with Tegeta was concluded on the basis of an off-take agreement between Optimum Coal Mine and Tegeta.

“Hence the prepayment was paid to the contracting party being Tegeta. Optimum in turn supplied the coal to Tegeta and received payment from Tegeta.

“Eskom did not have a contractual obligation to pay Optimum Coal Mine as asserted by the business rescue practitioners.”

“We can confirm that the full amount of the prepayment to Tegeta has been recovered via coal delivered to Eskom by the end August 2016.

Eskom said an internal audit review found that the process followed for the procurement and prepayment complied with the Public Finance Management Act and National Treasury regulations.

“Eskom has not been approached by the Directorate of Priority Crime Investigation (DPCI),” it said. “Should the DPCI approach Eskom, Eskom will cooperate with the investigations.”

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optimum  |  tegeta  |  eskom  |  oakbay


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