Madonsela: Molefe can clear his name | Fin24
 
  • SAA

    Pravin Gordhan says while govt is committed to saving the airline, there's no room for more bailouts.

  • Andre de Ruyter

    Bondholders aren’t convinced that Eskom’s new chief executive officer is the best choice.

  • Illicit Tobacco Trade

    The SA Revenue Service says it is going to court to recover R200m in taxes in a decade-old case

Loading...

Madonsela: Molefe can clear his name

Nov 11 2016 20:23
Kevin Crowley

Johannesburg - Former public protector Thuli Madonsela says the best way for outgoing Eskom CEO Brian Molefe to clear his name is to encourage that the judicial commission of inquiry is set up as soon as possible.

Molefe announced on Friday that he will leave the power utility following the release of Madonsela's report  into the influence of the wealthy Gupta family on the state and the company.

ICYMI: All the news on Molefe

Molefe brought whole Eskom into disrepute - Iraj Abedian

Molefe's successor must be 'clean'

Molefe has done the right thing by resigning - Yelland

Brian Molefe a 'fallen angel' - economist

Lynne Brown 'sad' to see Molefe go

Eskom regrets Molefe's exit, says it's a great loss

TIMELINE: Brian Molefe's career so far

Molefe, who joined Eskom in April 2015, was accused in the report published on November 2 of favouring the Gupta family, which is in business with President Jacob Zuma’s son, by handing out coal-supply contracts and helping them buy Optimum Coal Holdings. He and Eskom deny wrongdoing.

Brian is the fallen angel for investors,” said Peter Attard Montalto, a London-based economist at Nomura International. He is “now implicated in alleged grand corruption and rent extraction.”

Molefe is leaving “in the interests of good corporate governance,” he said in a statement emailed by the Johannesburg-based power utility Friday. “I do so voluntarily.”

Molefe helped oversee an end to rotational power cuts that crippled Africa’s most-industrialised economy in the first half of last year, implementing a maintenance program designed to trim blackouts. He previously ran Transnet, the country’s profitable rail and logistics company.

Gupta influence

The report, written by former public protector Thuli Madonsela, rocked South Africa’s political elite earlier this month as it published evidence that appeared to show the Gupta family exerting undue influence over Zuma’s government and state-owned entities for commercial gain. The Guptas and Zuma deny wrongdoing.

READ: #StateCaptureReport: Madonsela nails Eskom over Gupta coal tender

Mobile-phone records show Molefe called Ajay Gupta 44 times from August last year through March, while Gupta called the Eskom CEO 14 times, according to the report.

“I am confident that, when the time comes, I will be able to show that I have done nothing wrong and that my name will be cleared,” Molefe said in the statement.

Eskom’s $1.25bn of bonds due in February 2025 extended declines after the news, with the yield climbing 43 basis points to 7.75%, the highest since June 28.

At a briefing last week, Molefe wept as he said there was “no basis” to the public protector’s findings. Madonsela canceled a meeting in which he was supposed to give his version of events, he said.

Pics: Gareth van Zyl, Fin24

Judicial commission

In her 355-page report, Madonsela gave a directive that chief justice Mogoeng Mogoeng name a judge to chair a judicial commission of inquiry into allegations of the Guptas’ influence.

“The best way for Mr Molefe - and others mentioned in the report - to clear his name is to encourage that the commission of inquiry is set up as soon as possible,” Madonsela said by phone on Friday. “The worst-case scenario here is that they are found to be in contravention of the law.”

READ: #StateCaptureReport: I had a right to use cellphone records, says Madonsela

Eskom is considering taking the report on legal review, company secretary Suzanne Daniels said last week. Doing this “will just prolong the agony and may mean they never get a real chance to clear their names,” Madonsela said today.

She found that Eskom pushed Glencore, Optimum’s previous owner, into “financial distress” by playing hardball over coal contracts last year. Tegeta Exploration & Resources, then part-owned by the Guptas and Zuma’s son, bought Optimum after it was placed into bankruptcy protection. Tegeta was then awarded a R659.6m prepaid coal contract.

Acted legally

Eskom and Molefe said they acted legally and wanted to get the best deal for the country at a time when the power utility was struggling to get enough coal and blackouts were an almost daily occurrence.

“Thuli Madonsela has struck a deadly blow against Eskom,” chairperson Ben Ngubane told reporters on November. “If we lose Brian, she takes the blame.”

READ: #EskomResults: All the drama - AS IT HAPPENED

Molefe had a “distinct line of communication” with the Guptas during the sale of Optimum coal, the report said. Given their business links with the Guptas’ business empire, which spans computing, mining and media, Eskom’s board appears to be “improperly appointed,” Madonsela wrote.

Both Eskom’s board and its executive committee tried to convince Molefe to stay, company spokesperson Khulu Phasiwe said in an interview on Johannesburg-based broadcaster eNCA.

Lynne Brown, Minister of Public Enterprises, which oversees Eskom, said she was “saddened” by Molefe’s departure. “I will work closely with the board to ensure that the company remains stable,” she said in an e-mailed statement.

© 2016 Bloomberg L.P

Read Fin24's top stories trending on Twitter:

brian molefe  |  ceo  |  resignation  |  eskom
NEXT ON FIN24X

 
 
 
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What do you think about private healthcare in SA?

Previous results · Suggest a vote

Loading...