Ex-Eskom board chair: Guptas wanted New Age breakfast probe to go away | Fin24
 
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Ex-Eskom board chair: Guptas wanted New Age breakfast probe to go away

Jan 23 2020 21:49
Lameez Omarjee

Tony Gupta wanted the Eskom board to scrap an investigation into alleged irregularities in a R43m sponsorship deal with the former Gupta-owned New Age newspaper, the state capture commission has heard.

On Thursday, former Eskom chairperson Zola Tsotsi testified about three sponsorship deals the power utility concluded with the newspaper, which has since folded. Tsotsi told the commission that the TNA breakfast sponsorships were operational matters which fell under Eskom management. These deals were only escalated to the board in certain cases. 

Two of the deals - which date from 2011 and 2012 - predated Tsotsi's term as chairperson. The third sponsorship deal, valued at R43m and concluded in April 2014, was flagged to the board's audit and risk committee via a whistleblower.

The whistleblower complained that the utility's then-acting CEO, Collin Matjila, approved the deal without following due process.

Tsotsi told the commission that the audit and risk committee resolved to conduct a forensic audit of the deal to be undertaken by an independent authority. The committee then appointed SNG to investigate what happened. 

In 2017, Tsotsi testified before a different Parliamentary inquiry into Eskom that the Guptas had threatened to remove him from his position for not helping them with anything, including issues with the TNA breakfast sponsorships, Fin24 previously reported.

'Chairman, we have a problem'

Tsotsi's evidence before the Eskom inquiry was brought up by Hofmeyr, who asked that Tsotsi recall a meeting with Tony Gupta at the Sahara Computers offices in Midrand, in November 2017.

Tsotsi could not recall what stage the SNG investigation was at when he met the Gupta brother, but he could confirm that the probe had started.

"I met him [Tony] briefly. He said to me, 'Chairman, we have a problem here. There is some issue to do with the signing of our contract. It is some problem we do not understand. What we understood is that Mr Matjila did something wrong in signing this contract,'" Tsotsi recalled.

"He says to me, 'Well, you are the chairman, and as far as I am concerned this is a matter you can deal with… what I would like to see happen, is to see this thing go away. Can you make this thing go away?'"

Tsotsi said he assumed Tony Gupta was referring to the investigation, as it impeded the TNA deal. He said he explained to Gupta that he did not have the operational authority to intervene in decisions made by management. He also explained that there was a formal process – an inquiry – into the signing of the contract, which was why he could not assist.

"For the first time I had dealt with him, he was visibly upset," Tsotsi said. "He said to me, it appears to him that I am not interested in assisting him," he added.

The final SNG report was circulated among board members on November 7, 2014 – it had advised Eskom to seek legal opinion on the matter and advice on disciplinary actions to take against implicated employees - Matjila and Chose Choeu.

Eskom appointed Tshediso Matona as permanent CEO on November 1, 2014. Matjila returned to his position as a board member, before resigning from the board in December that year, just before a new board was appointed on December 11.

The attorneys advised that because Matjila had left the business, "pursuing him would be an academic exercise", Tsotsi said. "It would not be worthwhile for us to discipline him, because he was no longer part and parcel of the organisation."

New board

Tsotsi further testified that the new board's appointment coincided with the appointment of a new public enterprises minister, Lynne Brown. He, however, clarified that the old board's term was supposed to be concluded earlier in the year and there was nothing untoward the appointment of a new board.

Reiterating his previous testimony to Parliament's Eskom inquiry, he shared how minister Brown and Gupta business associate Salim Essa and Tony Gupta tried to interfere with the allocations of board sub-committees.

At Eskom, there are a number of sub-committees in place and the duty of the chairperson is to assign members of the board to different sub-committees, Tsotsi explained. The exception would be the audit and risk committee - a statutory body - which the minister would appoint. 

While in the processes of allocating board members to the sub-committees, Tsotsi said he received an email from Essa, whom he had met before at TNA breakfasts.

In the email Essa shared with Tsotsi his allocation of board members to sub-committees, Essa asked Tsotsi to pass on the allocations to Brown. "I was taken aback by this. I did not understand what his role was and the reasons why he was involved in this," Tsotsi said. He ignored the email and continued working on the allocations by himself, assigning board members to sub-committees based on their abilities as reflected in their CVs.

Tsotsi emailed his allocations to Brown, who in turn emailed him back her proposals which were "precisely" what Essa sent him. "I got the impression there was some collusion between Mr Essa and the minister," he said.

Before the process was finalised, he recalled being invited to Brown's official residence to discuss the allocations to sub-committees, shortly after the new board was appointed. Tsotsi said both Tony Gupta and Essa were at the minister's house. 

"I did not spend more than two or three minutes. I did not even sit down," he said. The minister asked him to proceed with the sub-committee allocations she sent him, to which Tsotsi replied that he had seen the allocations and would proceed as such.

Gupta and Essa did not say anything at the meeting, Tsotsi confirmed to the commission.

Tsotsi will continue his testimony on Friday.

the new age  |  tna  |  eskom  |  tony gupta  |  zola tsotsi
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