Eskom has portrayed its suspended head of legal and compliance, Suzanne Daniels, as a powerful facilitator and enabler of the Gupta tentacles within the parastatal and seeks to blame her for some of its most shocking State Capture scandals.

Emails downloaded from the Eskom server form part of a damning disciplinary case against Daniels, the woman who exposed the role of fellow executives in the scandal and lifted the lid on Ajay Gupta’s alleged Melrose Arch tea gathering, among other things, in Parliament in 2017.

Dismissing her as a “so-called whistle-blower”, there is little, if any, trace of Eskom approval for evidence Daniels presented to Members of Parliament during the Eskom enquiry late in 2017.

Scorpio has established that Eskom does not believe that Daniels’ disclosures to Parliament should be covered by the Protected Disclosures Act. It argues that much of the information was already in the public domain through the Public Protector’s State of Capture report, the #GuptaLeaks and the Budlender report that was commissioned by former Trillian chairman, Tokyo Sexwale, following the scandal surrounding President Jacob Zuma’s axing of former finance minister Nhlanhla Nene during his first term in the portfolio.

Daniels faces a raft of charges for misconduct and negligence in the performance of her duties emanating from her conduct over the course of the attempted heist of the parastatal by the Guptas and their Dubai club of Eskom executives.

Up to her suspension in October, she held various positions at Eskom, including that of general manager in the office of the chairman, group company secretary and head of legal.

Meticulously presented by Advocate Tembeka Ngcukaitobi for Eskom, her disciplinary hearing resumed before chairman, senior advocate Nazeer Cassim, at Maisels Chambers in Johannesburg on Monday. Following a ruling by Cassim, Daniels does not need to plead to any of the charges until Eskom completes its case against her and it has been confirmed that she will defend every single one of them.

She faces four main charges and several sub-charges which, when summarised, incredulously puts her at the centre of the controversial settlement deal that resulted in Eskom paying R1.6-billion to consulting firm McKinsey and the Gupta-linked Trillian Capital Partners.

And Eskom, according to an extensive charge sheet, seeks to pin on Daniels a controversial pre-payment for coal to the Gupta-owned Tegeta and irregularly arranging for the company to pay hundreds of thousands of rand in legal fees for the then chairman, Dr Ben Ngubane, for a matter that had no relevance to Eskom.

Charge 1: ‘Salim Essa blind copied on emails’

Fundamentally, Daniels is accused of sharing confidential Eskom information with an outsider via an email address that she “in all probability knew” belonged to Gupta kingpin, Salim Essa.

Eskom accuses her of distributing or failing to prevent such distribution, via her work and private email accounts, of several highly confidential internal documents to an outside email address that it contends belongs to the businessman.

This includes draft statements from the chairperson of Eskom, a draft contractual document and a draft letter that Daniels allegedly sent to the email address “Businessman [email protected]”.

Eskom argues that based on information accessed from the server emails of former executive, Matshela Koko, and information in the public domain, this email address is likely to be that of Essa, an associate of the Gupta family and shareholder in a number of companies involved in supplying Eskom with goods and services, including the Gupta-owned Tegeta and the controversial financial advisory firm, Trillian Capital Partners.

“You also received and implemented input on the drafting of an Eskom public statement regarding contracts linked to the Gupta family from this person,” states the charge sheet.

This, Eskom says, was in breach of its policies and procedures and amounts to a serious breach of her fiduciary duties to the company.

According to evidence presented, the email trail shows how in one case, upon being provided with a draft statement by Eskom’s legal department, Essa then gave instructions regarding information that needed to be included therein.

Ultimately, Ngcukaitobi said, the statement issued by Eskom included Essa’s comments – specifying that the Gupta-owned Tegeta received less than 5% of coal deals from the parastatal against 80% of deals awarded to four big companies. Based on this, the hearing was told:

“You are not overstating the position when you say Salim Essa was already running Eskom at that stage.”

Ngcukaitobi said the emails suggested that not only did Daniels allegedly blind-copy the email address it believes to be that of Essa, but she was “hiding” that in view of her colleagues having been ‘cc’d” or courtesy copied on the emails while his email address could not be seen by the other recipients.

This was uncovered during a cyber forensic investigation that allowed investigators to examine additional layers in nearly 100 emails from the Eskom server and digital devices of Koko, disgraced former chief financial officer Anoj Singh and others.

Eskom also presented evidence of a copy of a coal supply agreement that Daniels allegedly sent to Koko and which she allegedly also copied the Essa email address in on. This mail involved Koornfontein Mine, an entity that the Guptas gained ownership of through their controversial acquisition of Optimum Coal Mine.

Ngcukaitobi said that, at the very least, the documents shared with the emails widely accepted to be that of Essa show that Daniels had a “prima facie” case to answer.

Charge 2: The McKinsey/Trillian settlement

Eskom is represented by law firm Bowman Gilfillan, ironically the same firm that Daniels instructed to issue letters of demand to McKinsey and Trillian for repayment of R1.6-billion in October 2017. While the fight over that repayment continues, Daniels, who described the payment as “brazen theft” in Parliament, is now charged with, among other things:

• That while she was general manager in the office of then chairman, Ben Ngubane – prior to her taking up the role of Group Company Secretary and later, Head of Legal and Compliance – she was directly involved in preparing the motivation for a Master Service Agreement with McKinsey as a sole source supplier despite internal opposition to this, something Eskom argues was in breach of policies and grossly negligent.
• That later, as group company secretary, she allegedly failed to ensure that members of a Board committee were given legal advice about a proposed settlement agreement with McKinsey and Trillian in the absence of a valid contract. Daniels allegedly allowed a “defective submission” to be given to the committee that approved the controversial settlement agreement with the two companies. The submission to the committee was described as a settlement for “an already lower” amount of R1.8-billion “inclusive of payment to BBBEE partner”. Yet, Trillian, the BBBEE partner, was not mentioned by name in the document even though the company’s Eskom dealings had by then triggered major public controversy. The submission to the committee also contained a check list which noted “no legal or contractual” issues and further payments were released to the companies after a legal opinion by Cliffe Dekker Hofmeyr, which was obtained, later expressed concern with the settlement because, in the absence of a contract, there was “no legal nexus” between Eskom and Trillian and as such that the parastatal had no legal liability towards Trillian.

These factors, among other things, Ngcukaitobi argued, were tantamount to gross negligence as he accused Daniels of having failed in her duties and of misleading the committee to sign off on the settlement deal with the two companies.

Charge 3: ‘The bespoke Tegeta prepayment deal’

In this charge Daniels is accused of financial misconduct under the Public Finance Management Act for various transactions involving Gupta companies, including the controversial R659-million prepayment for coal involving one of the family’s companies, Tegeta. Based on information from various emails, Eskom claims Daniels had, either in her capacity as group company secretary or head of legal, aided other Eskom executives such as Koko and Singh on a regular basis between December 2015 and August 2016 on transactions relating to Tegeta’s coal supply agreements as well as the “bespoke” prepayment deal.

The parastatal accuses Daniels of failing to fully disclose, during her testimony at the parliamentary hearing, her own role in those transactions and/or how she had assured the Board that the prepayment agreement had been verified by “an independent third party” that turned out to be one with a vested interest in the outcome.

This third party entity was represented by Eric Wood who was by then in the process of establishing Trillian Capital Partners along with Essa in preparation for a lucrative partnership with McKinsey at the time.

“In your submissions you likened your role to one of a clerk transcribing the decisions of others. You failed to advise Parliament that you had played a direct role in assisting in the execution of these matters in a role akin to a legal adviser. In this regard you were directly involved in facilitating these transactions and advising on how they could be implemented in drafting documents related to them and in appointed external legal counsel reporting to you.”

The company argues that Daniels’ alleged failure to make honest and candid submissions to Parliament about her role continued to cause it reputational and financial damage in the market.

Charge 4: ‘Ben Ngubane’s SABC bill’

An additional charge Daniels will have to answer to relates to her allegedly irregularly authorising Eskom to pay just over R800,000 towards the legal fees of Ben Ngubane. She allegedly instructed a law firm to assist Ngubane ahead of a parliamentary enquiry into the public broadcaster, a matter that had nothing to do with Eskom.

Eskom paid two invoices in the amounts of R154,614 and just over R651,811 and it argues that this amounts to fruitless and wasteful expenditure and that it was in breach of internal policies and procedure as well as the Public Finance Management Act.

The case is scheduled to resume later in May when Eskom continues its case.

Daniels has thus far been regarded as an important whistle-blower in the fight to undo the Gupta damage at Eskom. How successfully she fights the charges against her will be determined by how diligently she kept records of instructions, minutes of meetings or whether she has a couple of bombshells of her own. DM

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