Eskom board chairperson Ben Ngubane on Friday hit back at former public protector Thuli Madonsela, saying her adverse findings on CEO Brian Molefe regarding “questionable transactions” with the Gupta family-owned Tegeta company was “not based on facts”.
“Transactions made were entirely commercial. Eskom disputes the public protector report, as it is not based on facts,” Ngubane told reporters in Johannesburg.
He said during her investigation, Madonsela did not interview anyone at Eskom.
In her State of Capture report, Madonsela found that a prepayment of several hundred million rand by Eskom to Gupta-owned Tegeta Resources & Energy for a coal tender to supply Arnot Power Station was allegedly used to buy Optimum Coal Mine (OCM) from Glencore – a move that she noted may be corrupt, illegal and amount to fruitless and wasteful expenditure.
She also found that Molefe and Ajay Gupta had a close relationship and they called each other numerous times.
Madonsela, who was investigating allegations of state capture by the wealthy Gupta family, cast the net wider into Eskom’s dealings with Tegeta.
The probe included cellphone records, which showed that between August 2015 and March this year, Molefe and Ajay Gupta called each other 58 times. Her report, which was released on Wednesday, also included a diagram “placing Mr Molefe within the Saxonwold area” on 19 occasions between August 5 and November 17 last year.
Madonsela noted that when she interviewed Ajay Gupta on October 4, he claimed Molefe to be his “very good friend” and said he often visited the family’s Saxonwold home.
In the same interview, Gupta “also admitted to being friends with President Zuma”, Madonsela said.
In a tearful response to the media on Thursday, Molefe denied being at the Gupta Saxonwold compound. He said he had instead frequented a shebeen in the area, hence the cellphone records placing him in Saxonwold.
In the damning report, Madonsela concluded that the power utility neglected its public mandate — and prejudiced mining multinational Glencore — to benefit Tegeta, the Gupta-owned exploration company that has secured contracts to supply Eskom’s Majuba, Arnot and Hendrina plants.
She furthermore found that the Eskom board may have violated the Public Finance Management Act (PFMA) by approving, at a hastily convened after-hours meeting, an advance payment of more than R659 million to Tegeta when it emerged that it needed funds to buy out OCH.
“The Eskom board does not appear to have exercised a duty of care or acted, which may constitute a violation of section 50 of the PMFA.”
She added that Tegeta may have committed fraud by misrepresenting the real reason for requiring the prepayment.
Madonsela also faulted Public Enterprises Minister Lynne Brown for failing to intervene and forcing the board to act in line with its public mandate.
“It appears as though no action was taken on the part of the minister of public enterprises as government stakeholder to prevent these apparent conflicts,” she remarked in the report.
Ngubane and Molefe both deny any wrongdoing.