South Africa

SCOPA, Parliament

Thousands of Eskom officials failed to declare financial interests, SIU verifies

Thousands of Eskom officials failed to declare financial interests, SIU verifies
The extent of 5,452 staffers failing to disclose their financial interests equates to almost one in 10 employees at Eskom, with its total workforce of just over 46,600, from the lowest-ranking blue collar worker to top executives. (Photo: Adobe Stock)

As the Special Investigating Unit alerted Eskom that 5,452 of its employees had failed to declare their financial interests, MPs were also told of tens of millions of rands in kickbacks paid to officials at the power utility.

Wednesday’s Special Investigating Unit (SIU) briefing to Parliament’s public spending watchdog, the Standing Committee on Public Accounts (Scopa), on its probes at Eskom has two takeaways.

First, illegality and self-enrichment – and the abuse of state assets for private gain – continues to run deep in the power utility that was central to State Capture. Second, institutional change remains an uphill battle while Eskom – given its R488-billion debt and insecure power supply – remains the biggest risk to South Africa.

The extent of 5,452 staffers failing to disclose their financial interests equates to almost one in 10 employees at Eskom, with its total workforce of just over 46,600, from the lowest-ranking blue collar worker to top executives.

Of those, the SIU confirmed that 324 employees were linked to entities on Eskom’s vendor list. And 135 employees were doing business with the power utility to the tune of more than R6-billion.

In contrast, in September 2020 it emerged that one in 1,100 civil servants across national and provincial departments that employ over 1.1 million public servants were unlawfully doing business with the state.

The department of public service and administration told MPs of an increase to 1,539 in the number of civil servants doing business with the state, up from 1,068 just a year earlier in February 2019 – even though the Public Administration Management Act banned, and in Section 8 even criminalised, civil servants doing business with the state.

Words are not enough: Fighting corruption requires action, time frames and political will

On Wednesday the SIU told Scopa it had referred the cases of seven Eskom officials to the National Prosecuting Authority (NPA), with another eight cases being prepared for referral.

Eskom, meanwhile, had instituted 15 disciplinary proceedings in relation to the failures to disclose, with two officials having been acquitted and two found guilty. Four officials resigned and Eskom decided not to pursue these cases.

SIU boss Andy Mothibi told MPs it became difficult to act against employees who resigned. But, he maintained, action must be taken.

“We are driving hard… there’s consequences on all fronts. Disciplinary measures… we are following up with Eskom whether they are implementing our recommendations,” said Mothibi.

Eskom previously told MPs its top executives and senior managers had all filed their disclosures, and also passed lifestyle audits. That means most conflicts of interests and cases of business being done with the state would be at middle management level and below.

On Wednesday the SIU told Scopa that Eskom red-flagged 34 officials from those lifestyle audits. Eight are now facing disciplinary proceedings; seven resigned and 19 investigations are ongoing.

Eskom spokesperson Sikonathi Mantshantsha told Daily Maverick the power utility would investigate and act where there were findings of malfeasance. “We will hold to account anyone in disciplinary proceedings, and even criminal charges.”

A number of former Eskom executives have already been bust.

In mid-December 2019, former senior Eskom executives Abraham Masango and France Hlakudi were arrested and charged with fraud and corruption over R30-million kickbacks linked to Kusile’s coal power station. And in November 2019, former financial controller Bernard Moraka was charged on 53 counts.

Ex-Eskom bosses, Tubular Construction executives charged over R30m Kusile kickbacks saga

The new build programme at Kusile and Medupi – these power stations are tens of billions of rands over budget and years overdue – and the power stations of Matla, Majuba and Ingula, were also red-flagged.

At Kusile, for example, the SIU identified what it called “suspicious payments” of R136-million from four contactors to another two sub-contractors who, in turn, unlawfully channeled R44.4-million to four Eskom officials.

Although the SIU referred three matters related to the new build programmes to Eskom, once officials received their suspension letters, two of them resigned. One staffer was found guilty in disciplinary proceedings.

The SIU has instituted civil proceedings against three contractors to recover overpayments totaling R2.78-billion. This comes in addition to a civil summons for R3.8-billion which the SIU and Eskom instituted in August 2020 against former power utility boss Brian Molefe, ex-chief financial officer Anoj Singh and others.

It emerged the SIU also seems to be looking at sumonsing Tegeta itself, regarding losses its coal contracts caused to Eskom. SIU chief legal counsel Jerome Wells told MPs the unit was currently quantifying the losses and damages suffered by Eskom.

“That process is at an advanced stage. That’s the basis for claims against Tegeta… (It) should be finalised within the next month, or two months. Then we institute summons,” said Wells.

“Tegeta is a going concern at the moment. It is operating… so it has assets at Brakfontein. The only concern is that it is under business rescue at the moment, but it is operational.”

As part of its Eskom investigations that began in April 2018, and were expanded in early 2020, the SIU is looking to recover R8.74-billion from various companies, contractors and others.

But the SIU has its hands full, given its involvement in the PPE tender scandal that benefited the politically connected and companies with no background in medical supplies – now also under scrutiny by the South African Revenue Service (Sars).

Mothibi told MPs the unit recently advertised 25 vacancies for forensic accountants and legal specialists. DM


Comments - Please in order to comment.

  • Derek Hebbert says:

    This should solve the retrenchment problem. No need to fight with the courts or the unions when firing this lot.

  • Angus Auchterlonie says:

    Excellent, lets see how many (and how many high-up) rats start scuttling from the spotlight, or making deals to save their own skins. Problem is our prisons are already overcrowded. Maybe they can put all the new inmates to hard labour building new prisons?

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