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I'm being used to discredit government and Eskom - Koko

Jan 23 2018 07:34
Yolandi Groenewald

Johannesburg - Controversial former acting Eskom CEO Matshela Koko believes he is being used to discredit the power utility and the government.

Koko is set to appear before the parliamentary inquiry into the extent of state capture at Eskom on Wednesday.

He said in his submission, leaked to Fin24, that he was somewhat at a loss to understand what he should provide to the portfolio committee. He blames his own crusade against corruption as a reason for being targeted.

The former Eskom executive believes he is “part of a frenzied campaign” calculated to break Eskom and to discredit the government.

“I have been caught in the crossfire and, arising from the simple magnitude of the campaign, have been unable to defend myself against it,” he said.  “It has all been very, very hurtful.”

Fin24 reported early in January that Koko was reinstated as Eskom's head of generation after a period of suspension.

He faced a disciplinary hearing over allegedly not declaring a conflict of interest while his stepdaughter Koketso Choma was a director at Impulse International, a firm which benefited from about R1bn worth of contracts awarded by Eskom over 11 months. Koko was found not guilty at the disciplinary hearing.

But he has never given a full account of his role in the controversial Eskom deal that handed a prepayment to the Gupta-linked Tegeta to acquire the Optimum mine, when it went into business rescue.

Tegeta 'tall tale'

In his submission, Koko dismisses the “narrative that has been spun by the media and others”.

He said the tale that Optimum was driven into business rescue by Eskom with the intention to enable Tegeta to acquire Optimum Coal Holdings' assets, and that when Tegeta by April 2015 fell short in putting up the money, Eskom made a prepayment to Tegeta to enable it to make payment, was false.

He also denied that in 2017 Eskom knocked down the penalty claim from R2.18bn to less than R600m to assist Tegeta further, as part of an overall strategy to establish Tegeta as a substantial player in the coal mining sector.

Koko said that in large part he was not party to the series of events that gave rise to Tegeta acquiring Optimum Coal Holdings' assets.

“I nevertheless deny that any such overall strategy ever existed,” he said. “Eskom instituting its penalty claim against Optimum, which did lead to Glencore’s putting OCH (Optimum Coal Holdings) and Optimum into business rescue, was an event quite distinct from what happened subsequently.”

Koko said the Gupta-linked Tegeta was first brought to the table by the business rescue practitioners. “The proposal of a deal did not to my knowledge in any manner or way originate from Eskom.”

Koko paints a picture in his submission that Glencore had tried to strongarm Eskom into a higher coal price and had refused to pay “even a cent” of the penalty issued as result of a poor coal quality. He said Glencore held “Eskom to ransom".

He said the Department of Mineral Resources became involved because of its officials’ concerns about Glencore Optimum’s apparent precarious financial status.

The department suspended the relevant mining licence and then Eskom CEO Brian Molefe had to approach the minister to ask that the matter be dealt with very carefully in light of the circumstances that existed - more particularly, Eskom’s generation constraints and load shedding that was costing the national economy dearly.

Last year former mineral resources minister Ngoako Ramatlhodi had accused Molefe and former Eskom chair Ben Ngubane of trying to force him to suspend coal mining licences while load shedding was taking place.

Koko states the communication with the Department of Mineral Resources was not out of the ordinary, usually occurring at the most senior levels.

“Suggestions have been made that our letter to the Department of Mineral Resources was in some or other manner irregular,” he said. “I deny that that is the case.”

He adds that the correspondence indicates the major concern Eskom executives had about the continued uncertainty regarding coal supplies to Hendrina.

Department aware

On December 7 2015 mineral resources director general Dr Thibedi Ramontja wrote to Koko, indicating that the department favoured a sale and transfer of the relevant Optimum mining right.

“The department was, clearly, abreast of  ongoing developments and of the identity of the potential buyer,” Koko said.

Also, Koko didn’t think a prepayment as suggested by the department was strange at all and said that Suzanne Daniels, suspended legal head, had also testified in front of Parliament that a prepayment was perfectly legitimate, given the circumstances.

Arnot emergency coal

But the former Eskom executive denied that the prepayment to Tegeta, made in April 2016 for the emergency coal from Arnot, was linked to the Tegeta payment for acquiring Optimum.

“I was not party to setting up anything of the sort,” he said in the submission. “From my perspective the prepayment was made to enable Tegeta to secure urgently required coal for Arnot from Optimum.”

Eskom declared a coal emergency for Arnot power station on December 23 2015, after an assessment of the 2016 winter supply plan indicated that there was a shortfall of 2.1 million tonnes of coal at Arnot, Koko said.

Eskom then approached the existing Arnot coal suppliers to make offers to increase their supply to mitigate the load shedding risk that the estimated shortfall at Arnot presented, he explained.

Tegeta, a coal supplier to Eskom at the time, was a good solution, Koko stated.

Koko said securing an adequate coal supply to Arnot for the immediate future was of critical importance at the time. On April 11 2016 Eskom’s Board Tender Committee authorised the prepayment due to Arnot’s coal supply shortage.

Koko supported the recommendation because it was urgently necessary to do so to secure coal supplies to Arnot. “I signed the relevant agreement with Tegeta and it was implemented in its terms.”

But Koko conceded that if other Eskom employees were party to arrangements to get the money to Tegeta to enable Tegeta to make payment in terms of the December 10 2015 deal, “it would be troubling to me”.

Reduced fine

Answering allegations that the fine was suddenly reduced after Tegeta acquired Optimum, Koko explained that "the settlement of the penalty claim occurred at a figure that was reasonably in the correct ballpark".

He said it emerged during the build-up to the arbitration proceedings that a substantial miscalculation of the penalties had occurred originally.

Also commenting on allegations that he lied on camera during an interview with Carte Blanche about the prepayment for coal to Tegeta, Koko maintained that his response was accurate and that he was misled by wrong documentation presented to him.

“I have since the broadcasting of the interview been publicly vilified on a regular, relentless basis and at every turn, not only by Carte Blanche, but by the media of all stripes and also within Eskom.” 

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