South Africa

Resigned to his fate? Brian Molefe to face parliamentary inquiry

By Marianne Merten 24 May 2017

There is no clarity as to whether Brian Molefe resigned as Eskom chief executive, took early retirement with a R30-million pension payout or, as it now appears from court papers, went on unpaid leave. After almost five hours of questions on Tuesday, MPs on Parliament’s public enterprises committee were none the wiser – and expressed unanimous “serious concern” that they were being led by the nose. Acting committee chairperson Zukiswa Rantho summed it up by saying the committee would continue to see Molefe’s return to the power utility “as an illegal thing that happened in Eskom until persuaded otherwise”. By MARIANNE MERTEN.

As the saying goes, you can fool some of the people some of the time, but you can’t fool all of the people all of the time. On Tuesday the Eskom board and its chairperson Ben Ngubane fundamentally misjudged that the time for fooling people was over.

Parliament’s public enterprises committee unanimously decided on Tuesday to take the first step towards a parliamentary inquiry over the return of Brian Molefe as Eskom chief executive and a host of other governance troubles, much but not all related to various contracts with companies linked to the politically connected Gupta family.

Such a parliamentary inquiry would be the second in six months, following that into the SABC. Like the one into the public broadcaster’s long-standing financial and governance turmoil, a parliamentary inquiry into Eskom cannot be disassociated from the factional battles in the governing ANC. Right now, those gatvol with the public embarrassment appear dominant, and determined to get to the bottom of state capture. The ANC was deeply embarrassed by Molefe’s return, some three months after being sworn in as MP in late February, as it had been by the widespread public outcry over the SABC’s ban on visuals of protests in the run-up to the 2016 municipal poll.

The mood was reflected in the at best lukewarm reception given to Public Enterprises Minister Lynne Brown’s announcement that her department had already drafted the terms of references for a probe into Eskom procurement only, not governance. Usually ANC MPs would welcome such a ministerial announcement. On Tuesday it was not so and tough questions and comments came from all sides.

There is a question mark around Brian. That question mark has not been cleared… That question mark is in the public interest,” said ANC MP Mondli Gungubele as his party colleague Zukile Luyenge said: “All has gone wrong. Eskom is in tatters… and the work of the board has been tarnished.”

ANC MP Pravin Gordhan later weighed in. “The public are connecting the dots,” he said in reference to Eskom, and there was “a conspiracy to capture Eskom for the benefit of a few” despite it being a critical state-owned entity. “What I see are straight faces because whatever you put out there in public no one will challenge.”

And DA MP Natasha Mazzone added: “We will tell our children to stop telling Molefes because we don’t believe anything”.

The question mark in question is Molefe’s appearance in the public protector’s “State of Capture” report, which found that the Eskom chief executive had called members of the Gupta family, or their business associates, over 40 times as the power utility negotiated a coal deal with Tegeta, linked to the Guptas. And further question marks have emerged, as amaBhungane reported, over Molefe’s relationship with the Guptas during his time at the helm of Transnet and the Trillian deal.

EFF Chief Whip Floyd Shivambu did not mince his words, describing Molefe as “captured”, and adding: “The reason why Brian [Molefe] is returned to Eskom is because the Guptas want to continue to loot Eskom.”

Both Shivambu and DA Chief Whip John Steenhuisen pointed out that Molefe had not taken the public protector’s report to court on review, and that what is on review by President Jacob Zuma relates largely to the recommendation that a commission of inquiry must further probe state capture.

Molefe in a public statement on November 11, 2016 said that he “in the interests of good corporate governance, decided to leave my employ at Eskom from 1 January 2017” and that he was “confident that, when the time comes, I will be able to show that I have done nothing wrong and that my name will be cleared” after criticising the report as “rushed” and “incomplete”.

Brown, in a public statement, accepted the “resignation” and wished Molefe well. On Tuesday it was a public humiliation for Brown to admit: “My impression was Brian Molefe resigned.” No one on the Eskom board told her that for months he went on early retirement, or whatever the circumstance of his departure were. On May 12 Brown publicly confirmed that she had accepted the Eskom board’s decision to “rescind” Molefe’s early retirement because it was “a significantly better value proposition for the South African fiscus” than paying him R30-million.

Molefe’s early retirement emerged in an April Sunday Times report on the R30-million pension payout. It sparked widespread outrage amid questions as to how, after just 18 months at Eskom, such monies were to be paid to someone not meeting the age and service conditions of the pension fund for early retirement. There were also reports saying an argument could be made for such a payment in terms of retrenchment. But retrenchment would have required a legal process under the labour laws, and that clearly didn’t happen.

But Ngubane told MPs that Eskom had agreed to buy out a decade of pension monies for Molefe as part of his chief executive contract because he had been moved from the Public Investment Corporation (PIC) to Transnet and then Eskom. “We had a signed agreement. We bought him 10 years,” Ngubane said.

Answers came reluctantly from Ngubane, who at one time chaired the SABC board and the turnaround strategies that did not pull the public broadcaster out of its financial quagmire as emerged before Parliament’s watchdog on public spending, the Standing Committee on Public Accounts (Scopa), as recently as last week.

His initial response – “The minister has said almost everything on the processes that occurred” – did not wash with MPs. Neither did his invocation that on legal advice “this matter cannot be debated anywhere except in court” since the DA has lodged court papers to review Molefe’s return.

He was bluntly told that matters before court, or sub judice, did not stop Parliament from exercising its constitutional oversight mandate. Parliamentary Rule 89 only cautions MPs not to make direct commentary on the merits of a court case.

Ngubane maintained the early retirement narrative even though court papers now qualify it with “purported”. Instead he vocally defended his team, and urged MPs to bring on any investigation. “The board has worked very hard. South Africa must at least acknowledge that.”

A similar tone came from Eskom non-executive board member Pat Naidoo. But his emphasis on Eskom’s positive balance sheet was smoothly swatted off by Gordhan. Enron, the American energy, commodities and services company that collapsed into bankruptcy in 2001 amid an accounting scandal, also had very positive balance sheets. Gungubule put it more bluntly: “All you are telling us – if we got the numbers, if we got money, shut up!? What’s your problem? That (attitude) is nonsense.”

Similarly rejected by MPs was Brown’s argument that she had no say in the matter because Molefe’s contract was signed under the 2014 memorandum of incorporation (MOI), not the 2016 memorandum that gives her a direct role on conditions of employment.

The R30-million pension payout debacle was the second cloud over Molefe in just two months. In February 2017 controversy erupted when various ANC branches claimed Molefe as their own in the push to get him to Parliament. Election candidate lists, on the basis of which party members are sent to the national legislature, were amended to ensure Molefe was eligible on the North West list. He was sworn in as MP in late February amid widespread speculation he would be the new finance minister.

In the Cabinet reshuffle to remove Gordhan and his deputy Mcebisi Jonas from the finance ministry, Molefe was not brought in. The South African Communist Party (SACP) subsequently put it on public record that it objected when his name was raised in earlier discussions on the reshuffle.

On May 12 Parliament confirmed that Molefe had resigned with effect of Sunday May 14. Or as ANC MP Namhla Nobanda put it: “He left here on Thursday after a sitting, on Monday he’s Papa Action (at Eskom).”

The court papers claiming Molefe’s Eskom employment contract actually never ended, according to the Mail & Guardian, have raised even greater problems – for Molefe, the ANC and Parliament.

If Molefe never left Eskom, he could have never been sworn in as MP. Section 47(1)(a) expressly excludes from qualifying as MP “anyone who is appointed by, or is in the service of, the state and receives remuneration for that appointment or service…” As chief executive of a state-owned entity, Eskom, Molefe is such a constitutionally disqualified person.

But MPs never got any answers on this unpaid leave issue, and why the post of Eskom chief executive was advertised and candidates interviewed if Molefe was just on unpaid leave.

ANC national spokesperson Zizi Kodwa slammed both Brown and Ngubane. “Not only are these latest developments disingenuous to say the least, they amount to perjury. The ANC calls on government and Parliament to act decisively to deal with this irrational and untenable situation.”

After meeting the ANC top six officials last Monday, Brown told MPs, it was decided government needed to establish a committee. This structure is now reviewing documentation. “There are a lot of opinions in the room. I don’t hold the same opinions,” the minister ended her time with the MPs.

What happens now depends on how the political winds blow. If the SABC parliamentary inquiry is any indication, and Tuesday’s committee meeting, the Eskom governance turmoil may come under sharp scrutiny. DM

Photo: President Zuma and then CEO Brian Molefe address the media and Eskom staff at Eskom Headquarters in Megawatt Park, Sunninghill, on his monitoring visit to the state-owned power utility. 06/05/2016 Kopano Tlape (GCIS)

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