Eskom’s beleaguered former chief executive officer Brian Molefe must pay back the R10.33 million of an unlawful R30-million early retirement package he received within the next ten days, a full bench of the High Court in Pretoria has ruled.
Judges Elias Matojane, Hans Fabricius and Sheila Mphahlele found that Molefe had terminated his employment relationship with Eskom in November 2016 either by retirement or resignation and that a decision by the Eskom Board to accept Molefe’s “early retirement” proposal was unlawful.
They also set aside Public Enterprise Minister Lynne Brown’s decision to reinstate Molefe and declared that any payment he received under any purported pension agreement was invalid.
Molefe was also saddled with the costs of the application by trade union Solidarity, The Democratic Alliance and the Economic Freedom Fighters.
The judges rejected Molefe’s claims that his original contract of employment did not come to an end, and that he was entitled to go back to his job as “contrived and manifestly false”.
Molefe announced in tears in November 2016 that he was stepping down for further good governance at Eskom in the light of serious allegations against him in former Public Protector Thuli Madonsela’s state capture report.
He spent a brief stint in parliament as an ANC MP before Public Enterprises Minister Lynne Brown in May last year reinstated him, but Eskom finally dismissed him a month later. He is now a reservist colonel in the South African Defence Force.
In court, he insisted he and the Eskom Board had been under the mistaken belief that he was entitled to a R30-million early retirement payout and that his “resignation” had therefore been invalid.
Judge Matojane said the state capture report contained damaging allegations against Molefe of abusing his position at Eskom to benefit the Gupta family in the improper and possibly corrupt awarding of state contracts and benefits to the Gupta family businesses.
He said the allegations were so serious that they were the reason for Molefe’s resignation, and were highly relevant to his suitability to be reinstated.
“They are a dead weigh that he must carry until he is cleared.
“In the absence of new facts that arose in the interim to lift the dead weight that motivated the need for Mr Molefe to resign in the first place, the allegations in the Public Protector’s report cannot just be ignored by the minister or eskom. The minister and Eskom acted irrationally in ignoring the damning allegations.
“… We find that the reinstatement of Mr Molefe as group chief executive officer at Eskom is at variance with the principle of legality and is invalid.
“… We also find that Mr Molefe was never entitled to receive any pension benefits from Eskom Pension Fund and any payments made in lieu of such benefits were patently unlawful,” he said.
“The decision by Eskom to waive penalties and buy Mr Molefe an extra 13 years of service totaling R30.1 million after only 15 months service at the age of 50 stretches incredulity, and is unlawful for want of compliance with the rules of the Eskom Pension Fund.
“What is most disturbing is the total lack of dignity and shame by people in leadership positions who abuse public funds with naked greed for their own benefit without a moment’s consideration of the circumstances of fellow citizens who live in absolute squalor throughout the country with no basic services,” the judges said.
Solidarity’s chief executive officer Dirk Herman welcomed the ruling as a huge victory for South African taxpayers and the rule of law. He said it now opened the way for the union to continue pursuing criminal charges against Molefe and other Eskom top executives.
Molefe’s attorney, Barry Farber, said his client “only wanted to serve the people of South Africa”, and would continue with his Labour Court action to get his job back, but he had no instructions yet if Molefe wanted to apply for leave to appeal against today’s ruling.