As it happened: Koko says he never met the Gupta brothers

ICYMI, here's a wrap of the last two days of the #EskomInquiry:

On Monday the inquiry grilled former Eskom CFO Anoj Singh, where he opened up on why he resigned, how much he earned, his Gupta connection, Tegeta, Mineral and Resources Minister Mosebenzi Zwane's involvement and faced-off against former finance minister Pravin Gordhan.

READ: Gorhan: Singh part of the team that brought Eskom to its knees

On Tuesday it was Eskom head of generation Matshela Koko's turn to face the inquiry, where he described himself as an Eskom-blue blooded, corruption buster, saying he was targeted because of his own crusade against corruption at the utility. He also denied that he ever met the Guptas, said he was called a thief by people he trusted and faced questions on the Tegeta guarantee and his disciplinary hearing.

READ: Koko: I do not know and have not met any of the Gupta brothers

 

Koko never met the Gupta brothers

"I do not know and have not met any of the brothers,” Eskom executive Matshela Koko told the portfolio committee of public enteprrises at the Eskom Inquiry on Wednesday.

He spoke on his links to Gupta business associates Salim Essa and Nazeem How

He explained that he knew Howa, who was the CEO of Tegeta and Essa who was a shareholder of Trillian. He had met Essa a “couple of times” to discuss the Trillian transaction with McKinsey, he said.

Responding to a question by DA MP Natasha Mazzone about whether he took an issue with the fact that specific names kept coming up at different state-owned enterprises like Eskom, Transnet and Denel.

She also asked him if at any point he had considered those who owned Tegeta and whether the contract would cause great uncertainty for SA markets. “I had nothing before me to suggest an element of criminality or improper conduct, if I had something to that effect I would have done what you asked me," he responded.

Koko spoke on his 31-year relationship with Eskom, which saw him through high-school and university and ultimately employed him. Koko was part of the team under the leadership of former group chief executive Brian Molefe who resolved the load shedding situation.

But before ending her cross examination Mazzone said that she believed load shedding was an illusion that was created as an enabler of state capture.

Questions have been raised about the ability of accounting bodies to hold professionals such as former Eskom chief financial officer Anoj Singh to account.

This follows several months of revelations against chartered accountants at KPMG and Steinhoff, which has put the prestigious industry under the spotlight.

According to the South African Institute of Chartered Accountants (SAICA) members’ register, Singh has been a member since January 2000. 

His appearance on Tuesday before the parliamentary portfolio committee investigating state capture earned the ire of MPs who said he’d failed to help them in providing information “on acts of corruption” as he’d been part of a team that had brought the power utility “to its knees”.

He faces an investigation by SAICA for “improper conduct”, after the lobby group the Organisation Undoing Tax Abuse (OUTA) laid a complaint against him in September 2017. 

Koko grilled about Guptas

Eskom executive Matshela Koko said he didn’t think there was anything criminal about the Tegeta contract.

He was responding to a question posed by DA MP and member of the portfolio committee of public enterprises Natasha Mazzone. “Knowing who owned Tegeta, did you not think it would cause a great deal of uncertainty for the markets or the SA economy?,” she asked.

She also questioned if Koko at any point found it suspicious that specific names kept coming up at state-owned enterprises like Eskom, Transnet and Denel. “Did you not step back and say, ‘I have an issue,’” she asked.

“I had nothing before me to suggest an element of criminality or improper conduct, if I had something to that effect I would have done what you asked me," he responded.

Mazzone then went on to ask Koko about his trip to Dubai, and if Sahara Computers had arranged and funded the trip. “I did not meet (Ashu) Chawla in Dubai, he did not book for me,” said Koko.

In turn he asked Mazzone if she had a chance to contact the hotel to verify the details of his booking. Mazzone said that she had the email from the hotel specifying the details, including who Koko’s chauffer was.

“These things are incredibly painful for South Africans. To us it paints a picture of a massive conspiracy under our noses,” she said.

She referred to an email from Koko’s Yahoo address. Koko explained the email address was deactivated and then briefly reactivated. The email was sent to the Director General of the Department of Public Enterprises Richard Seleke. Mazzone quoted it: "Please give to the boss, the fight begins.". Seleke then forwarded the email to Chawla and someone else who was later identified to be Tony Gupta. “What concerns me, is who are you calling the boss and what fight is on?,” she asked.

Koko said that he had never sent an email to the DG. “I have heard many versions of the emails and I think there is a way to verify them and they must be verified,” he said.

Earlier Koko spoke on his relations to other business associates of the Guptas. This includes Mr Nazeem Howa, who was the CEO of Tegeta Exploration and Resources, and Mr Salim Essa who is linked to Trillian. Koko said he met with Essa a couple of times to discuss the Trillian transaction with McKinsey.

Mazzone also brought up Koko’s disciplinary hearing. He said that it was not a sham, and had written to Business Leadership South Africa, Business Unity South Africa and Tiso Blackstar Group to desist from calling it a sham. “I am happy to make my documents available to you. If you are still unhappy you can take it for review, I think it is fair,” he said. 

Imperial Holdings CEO and newly appointed Eskom board member Mark Lamberti has denied claims by a former employee that he’s ’under a cloud’ for allegedly thwarting her promotion, as both parties await the judgment from the North Gauteng High Court.

Adila Chowan, a former employee at Imperial’s subsidiary Associated Motor Holdings (AMH), brought a court application against the logistics company’s CEO last year after she was fired in September 2015 over allegations of misconduct. 

At the heart of the matter is the claim that she was promised the position of Group chief financial officer (CFO), by Lamberti, at AMH, and she was not given the job as she is a black female and a white male, Ockert Janse van Rensburg, was appointed instead.

Koko hits out at Carte Blanche

Eskom never prepaid Optimum Coal Mine, Eskom executive Matshela Koko said during his testimony at the Eskom Inquiry, which continued on Wednesday evening.

His interview with Carte Blanche was played in Parliament, Koko said the voice-over was misleading by saying that he lied about the prepayment.

“The actual interview asked if Eskom prepaid Optimum. I said no,” Koko recalled. He said he was asked the same question twice.

In his written submission Koko said he did not lie on camera.  “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 and elsewhere, for, supposedly having lied during the interview, on camera, about the prepayment for coal to Tegeta, or, as it has often been presented, to a Gupta-linked company. This vilification has been baseless.  I did not lie “on camera” at all.”

He recalled the business rescue practitioner’s submission who had dealt with the transaction. According to the business practitioner’s version Optimum Coal Mine had not received R586m from Eskom.

He said he agreed with the business practitioner’s version that Optimum Coal entered into a sale agreement with Tegeta to supply coal to Arnot (power station). At the time prepayment was not made to Optimum. “It would be irregular for Eskom to pay Optimum. Eskom had no contract with Optimum to supply coal to Arnot,” he said.

He reiterated that the contract was between Eskom and Tegeta.  “I was under the impression she understands the prepayment went to Tegeta, not Optimum… My parting shot with her (the interviewer) left me with the impression she gets it now.”

I do not have 'load shedding' in my terminology

“I do not have load shedding in my terminology,” Eskom executive Matshela Koko said during a cross examination by Advocate Ntuthuzelo Vanara.

When people said prepare for two to three years of load shedding, it stopped in August 2015, under the leadership of CEO Brian Molefe, explained Koko.

“There is no power supply problem at Eskom. The country’s lights will be switched on for the next five years. We have surplus capacity,” he told the portfolio committee of public enterprises. He said that if there is a problem in future, it won’t be because of capacity.

He said that while he was on suspension, Molefe had appointed engineers to solve the maintenance problem at plants, which ultimately built up the additional capacity the country has now.

Eskom’s stockpile is an average of 40 days. “The problem with 40 days, is that you locked your working capital.” He said he and the finance director would fight everyday about it.

“There is a reason why 40 days (exists) it was because of the 2008 crisis when we ran out of coal.”

Eskom's group executive for generation Matshela Koko should follow the example of the power utility's former chief financial officer Anoj Singh and former acting head of group capital Prish Govender and resign, Business Leadership South Africa (BLSA) said on Wednesday.

Koko stumbles on question about R1.6bn guarantee for Tegeta

Eskom executive Matshela Koko acknowledged that Eskom did not benefit from the R1.6bn guarantee issued to Tegeta.

But when Advocate Ntuthuzelo Vanara asked him if Tegeta had indeed benefitted from the guarantee, he could not find the words to respond. He hesitated before saying: “I cannot comment further, but I hear you.”

Vanara had similarly probed former CFO Anoj Singh on the R1.6bn guarantee issued to Tegeta the day before. Singh said that not cash had actually left Eskom as the arrangement fell through, but Tegeta got the guarantee.

In his testimony, Singh explained that Eskom had identified a security supply risk to its coal and approached the Department of Mineral Resources for help. The DMR in turn recommended the R1.6bn cash injection from Eskom to help Tegeta, which was taking over a mine that was in business rescue.

Koko would not be drawn in to comment on Singh’s testimony but said that his understanding of the arrangement was that the DMR would do its best to assist by either speeding up Competition Commission process and the department’s as there was a security supply risk.

Of Optimum's financial situation, he said: “Optimum has to be discharged out of business rescue as a going concern. Only when there is a going concern, can it guarantee coal for the future."

Treasury did not support extension of Optimum Mine contract

National Treasury did not agree with the extension of a coal supply contract from Tegeta’s Optimum Coal Mine, the Eskom Inquiry heard on Wednesday.

Inquiry chair Advocate Ntuthuzelo Vanara read out a letter Eskom received from Treasury regarding the contract.

Eskom had sent Treasury a written request in August 2016, while Brian Molefe was still group chief executive. The entity requested to extend the contract from Optimum, owned by Tegeta, to provide Eskom’s Arnot Power Station with coal.

Treasury noted the “varied” reasons Eskom provided for the extension, but it is not clear why the competitive bidding process was not finalised for Eskom to comply with certain requirements of the Constitution.

“National Treasury does not support the extension of the existing contact, but it supports the deviation to request four potential suppliers to submit proposals for volumes of supply,” Vanara read from the letter.

Treasury requested that Eskom submit an assessment from the four suppliers, which included Exxaro and Tegeta (Optimum).

Essentially a closed bid process was undertaken. Koko said that the letter sounded “familiar” to him. Eskom undertook the closed bid process and submitted the report to Treasury in March 2017. It recommended two service providers, Exxaro and Optimum.

The closed bid process however was finalised in July 2017. Koko could not answer to this as he was not at Eskom at the time, he was placed on special leave in May 2017, he said.

Former Eskom interim CEO Sean Maritz is facing increasing scrutiny for his role in signing off on a questionable R400m payment from Eskom to a Hong Kong bank account, against all legal advice.

The R400m is widely viewed as a kickback and was apparently made to secure a $2bn (or R25bn) loan from China's Huarong Energy Africa to build or refurbish power stations last year.

On Tuesday energy analysts Chris Yelland revealed the documents showing the deal, and questioned whether Maritz was facing any action.

Chair probes integrity of Koko's disciplinary hearing

Advocate Ntuthuzelo Vanara questioned eskom executive Matshela Kko on the charges he had to answer to during his disciplinary hearing last year.

Koko 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

He was cleared of any wrong doing and reinstated as head of generation at the beginning of the year.

But the hearing has been criticised as being a sham. Vanara asked Koko to give an account of the original charge sheet he received and what he actually had to answer to during the hearing. 

It was revealed that Koko only answered to five out of the 10 charges during the inquiry.

Business Leadership South Africa (BLSA) has spoken out against Koko's reinstatement and has called for him to resign, as former CFO Anoj Singh and forer acting head of group capital Prish Govender did. 

"Late as it is, BLSA now calls on Mr Matshela Koko, the Group Executive for Generation, to do the same ahead of or soon after his appearance at the Parliamentary Inquiry into Governance Failures at Eskom on Wednesday (January 24 2018)," the BLSA said in a statement issued on Wednesday afternoon.

“BLSA reiterates its position that Mr Koko’s reinstatement was ill conceived and premature and should never have happened. This position is borne out by new disclosures that he breached the conditions of his suspension," said Themba Maseko, communications director at BLSA, said: 

“His continued presence at Eskom is undesirable, untenable and will compromise investigations and undermine the new leadership.”

 

Eskom has seen a remarkable leadership shake up in the past few days. Almost the entire board has been replaced with seasoned businessmen. And a well respected acting CEO has been put in place, too, writes Wits head of school of economic and business sciences, Professor Jannie Rossouw. 

 

Koko family's trip not funded by the Guptas - inquiry hears

Advocate Ntuthuzelo Vanara started his cross-examination by questioning Eskom executive Matshela Koko on his travels.

Koko said that he and his family, his wife, son and three daughters went to Bali from December 23. Upon returning, his daughters flew through Doha and he, his wife and son flew through Dubai.

When asked if Sahara Computers paid for the trip, Koko said that he had funded the travels himself. “I am happy to present passports of all 6 members of my family. I did direct payments myself, you can contact the hotel,” he said. “Sahara Computers  did not pay for my travels at all.”

I have been called a thief by people I trust – Koko

Eskom executive Matshela Koko opened up about the McKinsey-Trillian contract at the Eskom Inquiry on Wednesday afternoon.

“I have been called a thief by people I trust, by people I still trust. I have been called a thief by Suzanne Daniels who I believe is an extremely competent lawyer. I will not call her names,” he said.

Koko then went to present the situation surrounding the McKinsey-Trillian contract, referring to a letter from Daniels recommending Eskom pay McKinsey and its BEE partner (Trillian) R460m.

“What the committee will have to deal with, is Ms Daniels coming here saying Koko is a thief because of the Trillian transaction.” Referring to himself in the third person, he said: “Koko puts forward a recommendation from Daniels to pay McKinsey R460m.”

Daniels who was approached by Fin24 for response this week, said that she stands by her testimony to Parliament. “Suffice it to say, I stand by my testimony in Parliament insofar as it pertains to Matshela Koko. I will reserve further comment," she said.

Koko also hit out at former non-executive board member Venete Klein. In his written submission Koko explains that Klein tried to put him in a “bad light” because of resentment she holds against Koko for not helping her husband to procure a project management contract for his company.

Anoj Singh's ignorance questioned

As former Eskom chief financial officer (CFO) Anoj Singh’s testimony in Parliament continued into the late hours of the night, questions were raised about his denials that he was ever aware of wrongdoing at the power utility.

“You have to look at governance procedures - the board has to have faith in three key individuals: the CEO, the CFO and usually the chief operations officer,” Khaya Sithole, a chartered accountant and analyst, commented to Fin24.

Sithole disputed Singh’s claims to the state capture inquiry in Parliament that he was unaware that not declaring fruitless and wasteful expenditure was a crime, saying that as CFO, he would have signed off on Eskom’s financial statements.

“The idea that someone isn’t aware of the PFMA (Public Finance Management Act), he’s lying in Parliament, the auditors would have asked [him] if they’d complied with the PFMA.”

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

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.”

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.

My blood is Eskom blue - Koko

In his opening address to the portfolio committee on public enterprises, Eskom executive Matshela Koko shared that he made efforts to squash corruption at the power utility.

“I have been working for Eskom for 23 years. My association with Eskom is over 31 years. Eskom took me to high school, took me to university. I have only worked for Eskom… My blood is Eskom blue.”

After being appointed to executive level in November 2014, by then CEO Tshediso Matona. Three months later (March 2015) he was suspended for a period of four months, he recalled.

The reason given that power delivery was compromised. “I was suspended because the board thought that me and my colleagues were sabotaging the country because of load-shedding.”

Koko said that these reasons were not truthful. “I told the board the reasons they are giving me, are not what I am being suspended… I knew why I was being suspended. I was being suspended for refusing to take unlawful instructions from the chairman at the time Zola Tsotsi.”

He returned to Eskom in July 2015, when Brian Molefe was chief executive. “Load shedding was at its worst. It was costing the country R400m per day.” Molefe had met the Mineral Resources Minister Ngoako Ramatlhodi to deal with the situation.

He then detailed the situation regarding the Optimum Coal Mine, which was owned by Glencore at the time. Glencore eventually reached a decision to go into business rescue.

“I share this history, because until then, Koko was not in Eskom. I was in suspension by Zola Tsotsi for allegedly sabotaging the country with load shedding, when the real reasons were different,” he said. 

Controversial Eskom executive Matshela Koko has refused to resign from the power utility, saying he believes he still has a crucial role to play at Eskom. And he says that Eskom’s lenders have been unfairly demanding his dismissal.

Koko sent a lawyer’s letter to former interim Eskom boss Sean Maritz on Monday, in which he stated that if Eskom wants to dismiss him, it must follow the letter of the law.

On Monday last week Koko returned to his job at the power utility as Eskom group executive for generation.

"Our client is not willing simply to resign on the basis of unfounded calls that he do so, insofar as Eskom may believe that it has grounds to terminate Koko's services,” Koko’s attorney Asger Gani stated. “These have as yet not been disclosed to him.”

Finance Minister Malusi Gigaba told the SABC in Davos, Switzerland, on the sidelines of the World Economic Forum (WEF) meeting that he welcomed Singh’s resignation on the eve of his appearance in Parliament and implored with Koko to also step down out of his own “conscious” and “do the right thing”.  

Deputy President Cyril Ramaphosa announced widespread changes to the parastatal on Saturday, including a new board and a directive that all executives implicated in wrongdoing, including Koko and Singh should be removed.

Koko to answer to Parliament

Eskom head of generation Matshela Koko has not followed suit of former Eskom executives Anoj Singh and Prish Govender, who tendered their resignations this week. 

“My focus is on parliament now," he told Fin24 via a WhatsAapp message, in response to a question about whether he plans to leave the power utility.

Over the weekend the government appointed a new board, and requested that executives facing allegations of corruption, this includes Koko, be removed.

On Tuesday evening, during his testimony, Singh said he resigned to accede government’s request. He said that he did not discuss the resignation with Govender, who also resigned on Tuesday.

Koko has been implicated in the McKinsey-Trillian contract, among other things. In his submission to the inquiry, which Fin24 has seen, Koko shifts the blame to company secretary and head of legal Suzanne Daniels regarding the matter.

He alleges Daniels was "pivotally" involved in procuring payment of R460m directly to Trillian, when he in his capacity as interim CEO had on more than one occasion declined the requested payment, Fin24 reported.

Daniels in turn told Fin24 that she stands by her testimony to Parliament. Last year he faced a disciplinary hearing for allegedly failing to declare a conflict of interest.

His stepdaughter was a director at a company, Impulse International, which was awarded Eskom contracts worth R1bn over 11 months. He was cleared of any wrongdoing and reinstated at the beginning of the year.

Koko is expected to present evidence, accounting for his time as acting CEO at the power utility. The inquiry will focus on the purchase of Optimum Coal Mine by Tegeta, the prepayment to Tegeta and corporate governance at Eskom.