Matshela Koko hits back

Eskom head of generation Matshela Koko has implicated former board chairman Zola Tsotsi, suggesting he tried to arrange a payment by Eskom of R69 million to a Japanese company in 2014, despite the fact that Eskom neither had a contract, nor issued a purchase order to warrant the payment.

Koko states that his refusal eventually led to his and then Eskom CEO Tshediso Matona’s suspension in March 2015. Matona and Koko were among four Eskom executives suspended at the time. He is the only one who later returned to service. The four were not accused of any wrongdoing.

Tsotsi is only one of the persons who earlier implicated Koko in wrongdoing before the parliamentary portfolio committee on public enterprises that has been investigating governance failures at Eskom. Koko has hit back with counter-allegations in a written submission to the portfolio committee, which Moneyweb has seen.

He will present his submission and face questions from the evidence leader and members of parliament on Wednesday.

This comes days after government appointed a new Eskom board and directed it “to immediately remove all Eskom executives who are facing allegations of serious corruption and other acts of impropriety, including Mr Matshela Koko and (suspended finance head) Mr Anoj Singh”.

Finance minister Malusi Gigaba has called on Koko and Singh to resign “in the interest of the country”, but Koko says he has done nothing wrong. Singh resigned late on Monday evening.

In his submission, Koko further implicated former board member Venete Klein who apparently asked him to help her husband, Dr Harold Klein, get a contract for his company for the project management of the conversion of Eskom’s diesel-guzzling open-cycle gas turbines to gas.

‘Complete fabrication’

In her earlier testimony before the committee, Klein sketched Koko in a poor light, suggesting he was a bit of a dictator. This Koko says, is based on resentment because he refused to assist her husband.

As far as the Japanese company is concerned, Tsotsi told Moneyweb on Monday that Koko’s version of events is “a complete fabrication”. He said he referred a letter he received from the company Sumitomo Corporation to Koko as the relevant executive. In return, he got a letter from Koko stating that the purchase order would be issued and the payment would be made. He checked this with Eskom’s legal department.

Nevertheless, no purchase order was ever issued and no payment was made. He doesn’t know why.

Tsotsi earlier testified that the suspension of the four executives followed pressure from Tony Gupta, President Jacob Zuma and former SAA chairperson, Dudu Myeni.

Klein, in her response to the allegations, said she does not consider it appropriate to respond to Koko’s allegations before he testifies before the committee, but might do so at a later stage. She however denied any impropriety.

Koko denies having played a role in Eskom’s irregular payments to Gupta-linked company Trillian and says suspended Eskom company secretary and head of legal, Suzanne Daniels’, statements to that effect are lies.

“The truth is to the very contrary – it was Ms Daniels who was pivotally involved in procuring payments directly to Trillian of R460 million in circumstances where I, in my capacity as interim CGE, had on more than one occasion declined to approve such payment.”

Daniels told Moneyweb that she has not seen Koko’s submission and stands by her testimony in parliament, which she says is based on independent legal and forensic investigations and documentation provided to parliament.

Tegeta and Optimum 

The portfolio committee asked Koko to deal specifically with Gupta-linked Tegeta’s purchase of the Optimum coal mine from Glencore and the prepayment for coal to Tegeta.

He describes how Glencore bought Optimum in 2012 and put pressure on Eskom to increase the price it paid for the coal for Hendrina power station.

The relationship deteriorated and in July 2015 Eskom issued a letter of demand for R2.18 billion in penalties for sub-standard coal supplied over an extended period.

Koko refers to Daniels’ earlier testimony that the amount was overstated by about R1 billion due to a “spreadsheet error”. He says he always held the view that the final amount would be determined in arbitration.

Glencore at the time stated that it would be R800 million at the most and the business rescue practitioner testified before the committee that he estimated it at R700 million.

It was eventually settled with Tegeta as owners at R577 million.

Koko paints a picture in which Eskom played an active role in shaping the transaction to ensure continued coal supply to its Hendrina power station against the background of a power shortage, while making suggestions that would make the mine sustainable in the long run.

Koko states that the prepayment to Tegeta for coal for its Arnot power station was in line with Eskom policy and mandates and aimed at securing reliable supply.

He also deals with an interview with Carte Blanche in June 2016 during which he apparently lied about prepayments for coal to Tegeta. He states that he correctly denied that Eskom made prepayments to Optimum, because the prepayments were in fact made to Tegeta which sourced the coal from Optimum.

He says the document with his signature on that Carte Blanche showed him on camera was indeed an agreement with Tegeta, not Optimum as the presenter stated, but he didn’t realise it at the time.

Koko denies any strategy to drive Optimum into business rescue to enable Tegeta to acquire the business and that Eskom further enabled the transaction through a prepayment and hugely-reduced penalty.

“I have been the subject of a still-ongoing trial by media by journalists and others,” he states.

“The public and others in government and elsewhere have been taken in by the many falsehoods and misleading reports published about me, that are, on my reading, part of a frenzied campaign calculated to break Eskom and discredit the government. I have been caught in the crossfire and, arising from the simple magnitude of the campaign, have been unable to defend myself against it. It has been very, very hurtful.”

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