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Eskom challenges ‘unfair’ State capture claims

Eskom chairperson Dr Baldwin Ngubane

Eskom chairperson Dr Baldwin Ngubane

Photo by Duane Daws

19th April 2016

By: Terence Creamer

Creamer Media Editor

  

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State-owned electricity utility Eskom has moved to challenge ongoing media reports suggesting that the company has been “captured by politically connected families and individuals” and has also called on its former chairperson to approach the law enforcement agencies if he has any information regarding corruption by senior managers.

In a statement issued following a two-day board breakaway session, led by chairperson Dr Baldwin Ngubane, Eskom said the perception was being created that Eskom directors were being “used as pawns to facilitate lucrative tenders to these politically connected families”. It was particularly aggrieved by a recent Mail & Guardian article, which named directors who, the newspaper claimed, had either indisputable, circumstantial, or minor links with the controversial Gupta family.

“The effect has been that the professional integrity of board members has been adversely affected as well as their business dealings outside of Eskom. In the absence of concrete evidence of wrongdoing, this, surely, is unfair. They too, need to be protected by the Constitution and be presumed innocent until proven guilty,” Eskom said in the statement.

“The negative publicity is affecting the morale of Eskom employees and its directors. In this month alone, Eskom has lost two board members who had made valuable contribution to the board and its activities,” it added, referring to the departures of Romeo Kumalo and Mariam Cassim.

No mention was made of Mark Pamensky, who was reportedly appointed to the Eskom board three months after joining the board of Gupta-owned Oakbay Resources and Energy.

“Eskom is confident that it has a robust system and processes in place to ensure that actual, potential and perceived conflicts of interest of all its directors and employees are managed effectively. The interests of all directors on the Eskom Board are managed in terms of the legal and governance requirements relating to disclosure of personal financial interests.”

The utility added that, if the recent comments attributed to former chairperson Zola Tsotsi that some senior managers within the company are corrupt were correct, Tsotsi should “report the matter to the law enforcement agencies as required by Section 34 of the Prevention and Combating of Corrupt Activities Act”.

OPTIMUM TERMS UNCHANGED

The statement also tackled the recent purchase by Oakbay-linked Tegeta Exploration and Resources of the Optimum coal mine, which was placed into business rescue by Glencore in mid-2015.

Eskom argued that, throughout the business rescue process, it had indicated that it had no interest in the identity of the buyer, but had insisted that the contract remained valid until 2018, the price remained R150/t, that the agreed volumes and coal qualities remained unchanged and that the R2-billion penalty imposed on Optimum remained in force and payable.

“None of these conditions have changed. Of critical importance is to note that Eskom has issued summons against Optimum for failing to supply coal that meets the quality specifications of the Hendrina power station. Once the business rescue process has been finalised, the legal proceedings will continue to run their course.”

Eskom said the statement that coal was being sold to Hendrina at R174/t was inaccurate and that the prevailing price was R154/t.

It added reports suggesting that Eskom was not imposing penalties on Tegeta for the same poor quality of coal were also incorrect, but acknowledged that during the business rescue, the parties had agreed to suspend the application of penalties until the process was finalised.

“In fact, if the new owners fail to supply us with the contracted quality of coal, the same penalties will be applicable as per the service level agreement.”

The joint business rescue practitioners of Optimum Coal Holdings announced recently that the outstanding obligations in respect of the sale of the assets of Optimum to Tegeta had been performed and that the transaction became effective on April 15.

However, the mine would “operate as a going concern under the operational control of the business rescue practitioners until the practitioners are satisfied that Optimum Coal Mine is no longer financially distressed.

Edited by Creamer Media Reporter

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