ANA
Premium Journalist
3 minute read
8 Nov 2016
9:42 pm

Corruption Watch calls for maximum sentence in Eskom fraud case

ANA

The call was made by a non-profit civil society organization, Corruption Watch, at the resumed trial of Dawid Johannes Malherbe.

Eskom. File photo.

A former Eskom executive who embezzled the parastatal to the tune of R10,2 million, should receive the maximum sentence, a court heard on Tuesday.

The call was made by a non-profit civil society organization, Corruption Watch, at the resumed trial of Dawid Johannes Malherbe, 61, in the Specialised Commercial Crime Court in Bellville, Cape Town.

In June, he was found guilty of fraud and money laundering, by magistrate Sabrina Sonnenberg.

In her lengthy judgment at the time, she referred to Malherbe as an “opportunist”.

Corruption Watch was represented by Leanne Govindsamy, who handed to the court a 10-page report that she compiled, mandated by senior State advocate Derik Vogel.

Earlier, Nicro social worker Arina Smit, handed in a 41-page report in which she told of serious overcrowding in South African prisons and suggested a suspended prison sentence instead.

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Govindsamy said Corruption Watch had a vision of a corruption-free South Africa, in which people could report corruption without fear.

In the vision, corruption and maladministration were addressed without favour or prejudice, and public and private individuals were held accountable for the abuse of public power and resources, she said.

She said corruption against a State-owned enterprise such as Eskom, deprived tax payers of money intended for Eskom operations, and rendered the offence more heinous than corruption aimed at private entities.

“The siphoning of money away from the public good, in order to benefit the accused, undermines the interests of society, and impacts seriously on the delivery of essential services,” she said.

She told the court that the scourge of corruption in South Africa had reached epic proportions, largely due to the lack of sanctions.

The charge sheet cited Malherbe as accused number two, and the company that he formed with intent to defraud Eskom, Energy Utility Services (EUS), as accused number one.

Both Malherbe and EUS were found guilty of both charges.

According to the charge sheet, Eskom entered into a joint venture 23 years ago with the companies Electricite de France Internationale SA, and East Midlands Electricity, to supply Khayelitsha in Cape Town with electricity.

In the process, a third company was launched, Phambili Nombane Energy Services (PNES), based in Bellville, as an Eskom subsidiary.

The PNES board of directors comprised personnel seconded from Eskom, who remained in the employ of Eskom and were subjected to Eskom’s policies and procedures.

Among them was Malherbe, the managing director.

In early 2008, Eskom decided to turn PNES into a separate company, and no longer an Eskom subsidiary.

Malherbe was duty bound to ensure that his personal and business interests did not conflict with PNES or Eskom.

Malherbe was aware that, once PNES became a separate company, he would no longer be MD of PNES. He looked for an opportunity that would enable him to continue obtaining an income from the PNES services – thus bringing his personal interests into conflict with Eskom and PNES.

Malherbe was aware that certain PNES services had to be outsourced, and he saw this as an opportunity to contract with Eskom.

In order to achieve this, he registered EUS, with himself as the sole director.

Malherbe deliberately misled the PNES board on the BEE status of EUS, as it was wholly owned and controlled by himself.
In this manner, he fraudulently induced the PNES board to approve the outsourcing of services to EUS.

African News Agency