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01 Nov 2017
Parliament must act now to halt illegal Eskom deal with Guptas – Shivambu
Economic Freedom Fighters MP Floyd Shivambu wants Parliament to act now to halt what he said was an illegal deal between Eskom and Tegeta Exploration and Resources.
While the Guptas said they sold Tegeta (also part owned by Duduzane Zuma) to a Dubai businessman, Shivambu disputed this. “They have not disposed of it,” he said. “They have just put it into a different form.”
He said there is prima farcie evidence that deal was illegal. “This illegality is ongoing,” he said.
“Parliament should take a resolution to halt the crime now. “All the other institutions which were supposed to stop the crime are not doing anything,” he said.
“We should table a preliminary report and make recommendations.
“They can take this on judicial review,” he said. “A rational court will appreciate that Parliament has acted to stop this industrial looting.
“We must stop delaying this or we will collapse our fiscus,” he said. “When history looks back, we will just say we talked among ourselves.”
He pointed to the revenue shortfall of R50bn and Eskom’s 20%
tariff hike.“The implications are on ordinary people,” he said. “We are
increasing electricity in those circumstances.”
01 Nov 2017
We walked into a hornets’ nest at Eskom – witness
Business rescue practitioner Piers Marsden said they walked into a hornets’ nest at Eskom, when Brian Molefe took over at acting chief executive in 2015.
Molefe – seconded from his role as Transnet CEO – took a hard line against Glencore, the owners of Optimum coal mine at the time in 2015.
“We walked into a pretty difficult hornets’ nest,” he told Parliament’s inquiry. “It became quite clear that a transaction involving the contract with Glencore as a shareholder would not succeed.
“The hard stance Eskom took at the time stood up to commercial muster. It made commercial sense,” he said. “Where the picture gets murkier is regarding the facts that came out post the fact.”
The reason Optimum coal mine went into business rescue when Glencore owned it was due to the R2.15bn penalty Eskom imposed on it.
Marsden had tried negotiating this and offered many ways to making Optimum – which traditionally supplies coal to Eskom’s Hendrina power plant – operational.
Once the Gutpas owned the mine through Tegeta, Eskom discounted the fine by 75% and they only had to pay R500m in March 2017. The Gutpas subsequently announced the sale of the mine to a Dubai businessman.
ACDP MP Steve Swart asked that if Eskom had found a negotiated settlement regarding the R2.15bn fine and if they gave Optimum a contract to also supply Arnot power station with coal at a higher rate, whether Optimum would have needed to be in business rescue.
“This was one of the options that we tabled to Eskom,” Marsden said. “We were looking for any options to take to Eskom. We made a number of proposals for coal supplies. It was an option, but we were not able to conclude it.”
01 Nov 2017
Hawks starting to dig into Gupta-Eskom deal – witness
Business rescue practitioner Piers Marsden revealed that the Hawks have started engaging with him this year, a year after he reported Gupta-owned Tegeta and Eskom for what appeared to be a suspicious payment.
Marsden reported the matter to the police on 1 July 2016 and received an acknowledgement of receipt on the same day.
He was only contacted in May 2017, where a warrant officer asked him to write an affidavit regarding the allegation. He was then asked to write a further 34.3 affidavit in July 2017.
He was then contacted last week Thursday by another warrant officer, who he hopes to meet in the next couple of days. “I received a further email (last Thursday) from what appears to be a new investigator and I hope to see him in the next couple of days,” he said.
Marsden said he was frustrated that it took so long for the law enforcement agents to get hold of him. “I would have expected to get some clarity from the law authorities,” he said. “I remain here to assist the authorities.”
Marsden said the money from the pre-payment never came to the mine while he was there until August 2016, saying Howa appeared to have lied to Carte Blanche.
Advocate Nthuthuzelo Vanara had asked Marsden whether he thought former Oakbay CEO Nazeem Howa had control over the Eskom board.
“What do you think of the hypothesis that Mr Howa must have control over the people that convened the board tender committee on 11 April 2016?”
On the same day, Howa had told Marsden that Tegeta was R600m short to pay Glencore. Eskom held a meeting that evening and concluded an agreement to pay Tegeta a R586m prepayment.
Marsden replied: “The timing and quantum certainly look suspicious, but the hypothesis is above my pay grade. We certainly raised the suspicion, but it does not look good.
“From the public protector’s report and media reports, the relationship with Ms (current Oakbay CEO Ronica) Ragavan and Mr Molefe, there is certainly that requires further investigation.”
Regarding Eskom, Marsden said the business rescue practitioners had an acrimonious relationship with Eskom. “They were quite hard to engage with them to find a solution,” he said.
01 Nov 2017
Suspicion that Eskom helped Guptas buy Optimum
Business rescue practitioner Piers Marsden filed papers with the Hawks after watching a Carte Blanche episode in June 2016 that revealed that in mid-April 2016, Eskom agreed to pay Tegeta a R586m prepayment for coal at the same time as Tegeta revealed to him that they were R600m short on the R2.15bn deal with Glencore.
“We believed the quantum and timing of that was something that required further investigation,” he told Parliament’s state capture inquiry.
Tegeta – then owned by the Guptas and Duduzane Zuma – was a relatively unknown mining company at the time.
Glencore agreed to sell its Optimum mine in December 2015, but the Guptas had battled to find the full amount to pay the company.
“Tegeta was supposed to pay Glencore on 13 April,” he said. “Two days before the sale was due, (former Oakbay CEO) Nazeem Howa phoned. I was advised that they were R600m short on the purchase agreement.”
Oakbay – owned by the Guptas – had majority shares in Tegeta.
“I was asked to approach the banks to fill the shortfall,” he said. “The consortium of banks asked me to advise Mr Howa that they would not fund the R600m shortfall.”
“On 14 April the amount was paid.”
In June, when Carte Blanche broadcast an episode where suspended Eskom CEO Matshela Koko revealed that Eskom made a prepayment of R586m to Optimum for coal, Marsden realised there was something suspicious.
This was because the Eskom meeting with Tegeta happened on the same day that Marsden was told Tegeta was R600m short on the purchase agreement.
The suspicion was therefore that Eskom helped the Guptas buy the mine through the prepayment.
He said he therefore alerted the Hawks to investigate the matter.
01 Nov 2017
How Eskom blocked Optimum impasse
Business rescue practitioner Piers Marsden is explaining how Optimum coal mine was purchased by the Guptas. He took on the role in August 2015.
“We knew from the start that Eskom would be a fundamental player in the process,” he said.
“Optimum had a long-term coal contract with Eskom. It was a loss-making mine.”
He said that Optimum had a co-operation agreement with Eskom to find a way forward.
However, he said Eskom failed at the highest level to find a solution and a fine was imposed on the miner.
A R2.1bn penalty related to historic coal deliveries that were delivered to Eskom out of spec was then imposed.
“A variety of engagements were held to keep the mine running for the next two months,” he said. “This engaged the supply of coal.”
On October 5, it became apparent that a negotiated settlement regarding the coal contract would be rejected with current shareholding.
“We tried to pivot to find a potential purchaser,” he said. On October 7, it signed a binding term sheet with a third party, Pembani. The agreement was that the third party had to find a solution with Eskom to overcome the onerous supply agreement.
“Towards the middle and latter part of October, that transaction failed,” he said. “We implored Eskom to find a solution to save several thousands of jobs and retain the supply of coal to Eskom.”
01 Nov 2017
Optimum coal mine under the spotlight
The Portfolio Committee on Public Enterprises will be briefed on the corporate governance of Eskom and on how the optimum coal mine was purchased.
Tegeta Exploration and Resources bought Optimum from Glencore in 2016 for R2.15bn in a deal shrouded in mystery. President Jacob Zuma's son Duduzane was also a shareholder of Tegeta.
Under pressure - and with bank accounts being blocks - the Guptas sold Tegeta to Swiss-based Charles King SA for R2.97bn in August.
Tegeta is at the centre of former Public Protector Thuli Madonsela’s State of Capture report, which found irregularities in its dealings with Eskom. Brian Molefe stepped down as CEO in 2016 as a result of the report.
The Guptas have been under increasing pressure as media houses publish leaked emails, dubbed #GuptaLeaks, which have brought to light allegations of state capture.
In addition, Parliament is currently investigating the Guptas, while the Special Investigation Unit has been tasked with probing Eskom's coal tenders, which would probably focus on Tegeta's contracts.
There is also Madonsela's judicial inquiry, which is yet to be implemented. Zuma has pledged to start the state capture judicial inquiry.
01 Nov 2017
Trillian whistle-blower reveals rot at SOEs
Ex-Trillian Financial Advisory CEO Mosilo Mothepu gave a startling testimony on Tuesday at Parliament’s public enterprises inquiry into state-owned entities.
She alleged that suspended Eskom chief financial officer Anoj Singh had an improper relationship with Trillian CEO Eric Wood.
Mothepu worked for Trillian at Eskom and so had first-hand evidence of the suspicious activities that followed.
She has already provided evidence to former public protector Thuli Madonsela in 2016 and to Advocate Geoff Budlender who investigated Trillian on behalf of its board.
