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How Brian Molefe was imposed on Eskom

Nov 12 2017 06:01
Andisiwe Makinana

The Eskom board, led by Ben Ngubane, pushed for Brian Molefe’s permanent appointment to the power utility’s top job just two months into his secondment to the post.

While the erstwhile Eskom boss is fighting to clear his name, questions have been raised this week about the legality of his permanent appointment to the power utility in September 2015.

Molefe had been on the job for only two months of his secondment, when Ngubane started flooding Public Enterprises Minister Lynn Brown about the board’s decision on Molefe’s permanent appointment as soon as possible.

City Press has learnt that the board pushed for the appointment, even going as far as seeking legal opinion to justify why it could appoint Molefe without considering other candidates.

The legal opinion indicated that the process to be followed in appointing a chief executive officer (CEO) was set out in Eskom’s memorandum of incorporation (MOI).

Although it is stated in this document that the board must identify potential candidates, it does not preclude the board from identifying, nominating and evaluating one candidate – because, as the shareholder, the public enterprises minister would still have discretion on whether to appoint the preferred candidate or not.

“The MOI also does not have as a requirement that the candidate should be publicly invited to apply for the position.” So said Ngubane in one of a series of letters between him and Brown.

In one letter, written in June 2015, Ngubane informed Brown about a resolution taken by the Eskom board’s people and governance committee. It had been decided that Molefe’s appointment to the position of CEO be confirmed as soon as possible.

The resolution was taken at the end of May 2015.

Before his permanent appointment, Molefe had been acting CEO for six months, following his secondment from Transnet in April that year.

"His well-known track record"

Ngubane cited nine reasons for Molefe’s appointment as a permanent employee, rather than on a secondment basis.

Among them was “his well-known track record in the market, both nationally and abroad, for being able to turn around ailing companies, and this experience has been demonstrated in the stability and marked improvement in performance he has brought to Eskom since he joined 63 days ago”.

Another reason Ngubane put forward was Molefe’s hands-on approach to operational matters, particularly with regard to maintenance and load shedding, which had reached crisis point at the time he joined the power utility.

Ngubane wrote that Molefe had raised the bar on all fronts for his executive management team to follow, adding that Molefe’s academic background and considerable financial acumen had already been demonstrated in the more positive outlook that Eskom – and consequently, South Africa – enjoyed with the ratings agencies.

This was key to addressing the country’s liquidity issues, said Ngubane.

“Given the fact that Eskom is the core driving force of the South African economy, we are of one mind that no other person would, at this point, be able to maintain the current upward trajectory that Brian has placed the company on since his secondment in April this year,” he wrote.

“It is with this in mind that the board unanimously supports his appointment.”

Four days after the initial letter, Ngubane again wrote to Brown, requesting the extension of Molefe’s secondment “in order to ensure that we do not have a period where he is not contracted to either Eskom or Transnet”.

In response, Brown agreed to the extension of Molefe’s secondment, but made it clear that due process had to be followed in his permanent appointment.

“I am of the view that the Eskom board must deal expeditiously with the process, in line with the MOI, the Labour Relations Act and Eskom’s employment policies and procedures,” she wrote.

“In consideration of the business imperatives and the need to build public confidence, I urge the board to observe the acceptable procedure so that the recruitment process and submission is managed with integrity and transparency, and is able to withstand scrutiny,” added Brown.

Molefe’s permanent appointment was scrutinised in Parliament this week as part of the public enterprises committee’s inquiry into state capture at Eskom.

ANC MP Pravin Gordhan, who is a member of the committee, asked whether the proper recruitment processes were followed in hiring Molefe.

In his presentation to the inquiry this week, Tshediso Matona, who was Eskom CEO from October 2014 to March 2015, said he did not remember the position being advertised and that he did not think a minister could simply install a CEO, according to law.

City Press asked Eskom spokesperson Khulu Phasiwe about Molefe’s appointment.

He responded: “The reason there is currently a parliamentary inquiry is precisely to get to the bottom of the issue that you raised, and many others that are confronting Eskom.

“In due course, both Eskom and Mr Molefe are expected to give their sides of the story through this legally constituted forum,” he added.

Molefe did not respond to emailed questions.

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