Inquiry hears Eskom tender committee resolved to pay Tegeta R659m before contract was signed | Fin24

Inquiry hears Eskom tender committee resolved to pay Tegeta R659m before contract was signed

Mar 05 2019 13:35
Jan Cronje, Fin24

Atul Gupta

Eskom's board tender committee in April 2016 resolved to make a R659m prepayment to Gupta-linked company Tegeta Exploration and Resources before Tegeta's own board signed off on approaching the power utility or a contract was in place, the state capture inquiry heard on Tuesday.

The inquiry was hearing evidence from Eskom's head of finance for its primary energy division, Snehal Nagar.

Nagar was on Tuesday morning testifying about the sequence of events in mid-April 2016, when Eskom made a R659m coal prepayment to the mining company. 

Nagar said the first he heard of the proposed payment was on April 12, 2016, when he received an email from Ayanda Nteta which included a proforma invoice for R659m.

Nteta, said Nagar, was at one stage the power utility's head of fuel sourcing and later progressed to the head of its primary energy division. He was not sure what her capacity was at the time she sent the email.

He said she wrote in the email that the payment should be made "as discussed". No supporting documents were provided.

Asked whether he had discussed such a payment, he said: "If I had a discussion with her about a R659m prepayment, I would most probably have remembered it."

Copies of the email and the invoice were shared with the commission.


Nagar said it was unusual for prepayment to be made, as Eskom usually only made payments for goods received.

The following day, April 13, Nagar said he received a call from Maya Naidoo, from the office of then-CFO Anoj Singh. He said she called him at about 10:00 or 11:00.

She instructed him to make the R659m prepayment to Tegeta within two to three hours.

Naidoo told Nagar the deal had been approved by Eskom's board tender committee, he said. He asked her for additional documentation, which was sent through via email at 12:38, with an instruction to make the payment by 14:00.

This documentation included a resolution by the Tegeta board to ask for the prepayment, dated April 13, 2016.

Nagar was asked by the evidence leader how Nteta could have already sent him the pro-forma invoice the day before Tegeta board signed off on its resolution. 

"Chairperson, it does not make sense and I cannot answer it," said Nagar.

Board tender committee resolution 

The inquiry then moved on to the resolution passed by a special Eskom board tender committee to go ahead with the payment to Tegeta.

The resolution, dated April 11, 2016, was shared with the committee.

As the evidence leader noted, this meant the resolution was passed two days before Tegeta's own board resolved to approached Eskom for the prepayment. 

The board tender committee meeting was held via a telephone conference at 21:00, the inquiry heard. 

Nagar said the prepayment contract for Tegeta – also shown to the inquiry – was signed by its then Head of Generation Matshela Koko and witnessed by Singh. This document was also signed on April 13, 2016, the same day the urgent request for payment was made.

'Why this rush rush?'

Nagar was asked by the chair of the inquiry, deputy chief justice Ray Zondo, if he understood why the payment was rushed?

He said he didn't know. 

Nagar added that while the payment was "certainly startling," it was based on an instruction by Eskom's board. 

"I don't get to see the board minutes, I don't know what the board discussion is, I don't know what the reference point of the board is [...] you have an extract that says please do these one, two, or three things'.  

The inquiry continues. 

eskom  |  anoj singh  |  state capture inquiry


Company Snapshot


Debt and Eskom will take centre stage at this year's Budget

Voting Booth

How concerned are you about ransomware attacks?

Previous results · Suggest a vote