Criminal charges could follow 'devastating judgment' against Molefe | Fin24
 
  • Covid-19 Money Hub

    The hub will help answer your business and money questions during the coronavirus crisis.

  • Dudu Myeni

    The former SAA chair has been declared a delinquent director for her role at the national airline.

  • Cigarette Ban

    Govt says emerging research shows smoking leads to more severe cases of Covid-19.

Loading...

Criminal charges could follow 'devastating judgment' against Molefe

Jan 25 2018 13:00
Yolandi Groenewald

Johannesburg - Apart from the speedy repayment of R11m, former Eskom boss Brian Molefe could also soon face criminal charges for the controversial golden handshake he negotiated with Eskom after his tearful resignation.

On Thursday a full bench at the North Gauteng High Court ordered Molefe to pay back the R11m he has already received as part of his R30m pension payout from Eskom within 10 days. The court found Molefe’s declaration that he had not resigned was false, and that he was never entitled to pension money.

Trade union Solidarity chief executive Dirk Hermann told Fin24 after the judgment that the next step for the union would be to pursue criminal charges against Molefe.

Solidarity approached the high court on November 29 2017 to declare Molefe's controversial pension award of about R30m, as well as the more than R10m already paid out to him, unlawful.

Hermann said justice has been served, but that this was not the end of Solidarity’s legal battle against Molefe. He added that Molefe is not the only party Solidarity would hold accountable in the pension debacle.

“The next time we come to this court with a case against Molefe, it will be on the ground floor where the criminal courts are,” he said.

Molefe’s laywer Barry Farber said the ruling came down like a ton of bricks, adding that Molefe would be disappointed with it. He added that the former Eskom CEO is a good person and a family man who wants to serve South Africa to the best of his ability. 

Judge Elias Matojane, reading out the judgment, stated that Molefe had indeed resigned and not retired early.

“The decision by Eskom to approve Mr Molefe's early retirement and to conclude the early retirement contract is ultra vires (beyond legal power) and void for non-compliance,” the judgment said.  

The three judges ruled that the allegations against Molefe contained in the then public protector Thuli Madonsela’s State of Capture report led to his resignation.

“The allegations against Molefe contained in the Public Protectors (sic) are so serious that they were the reason for his resignation,” the judgment said.

Public Protector allegations a 'dead weight'

“The allegations are highly relevant to Molefe's suitability to be reinstatement (sic) as CEO. They are a dead weight that he must carry until he is cleared.”

The judgment stated that in the absence of new facts arising in the interim to lift the "dead weight" that motivated the need for Molefe to resign in the first place, the allegations in the Public Protector's report cannot just be ignored by Public Enterprises Minister Lynne Brown or Eskom.

Brown and Eskom acted irrationally in ignoring the damning allegations in the Public Protector's report, the judges found.

“We find that the reinstatement of Mr Molefe as Group Chief Executive Officer at Eskom is at variance with the principle of legality and is invalid and falls to be set aside,” the ruling stated.

Molefe briefly returned as CEO of Eskom on May 15 after the scandal around his pension emerged, but was removed again two weeks later when Brown ordered the board to reverse his reinstatement. Molefe later challenged this decision when he filed Labour Court papers against the board and Brown.

The court unanimously found that Molefe had resigned in December. The money he has already received with regards to the pension must be paid back in 10 days, and the claim of early retirement that he publicly made was false and deceitful, the court said.

Refuting Molefe’s argument that he had had no time to accumulate a pension, the judges stated that in terms of his Executive Employment Contract with Eskom, Molefe received a total annual guaranteed remuneration package of R7.65m.

It is thus untrue that Molefe had not been in a position to accumulate pension benefits over time, the court said. 

Eskom stated in the notes to its financial statements last year that the R30m Molefe received as an early retirement benefit would only be refunded to the company pursuant to a court order.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

NEXT ON FIN24X

 
 
 
 

Company Snapshot

Voting Booth

How has Covid-19 impacted your financial position?

Previous results · Suggest a vote

Loading...