Eskom to Investigate Alleged Racism by CEO De Ruyter

By Paul Burkhardt
Mar 9, 2021, 9:15 AM - Updated on Mar 9, 2021, 12:55 PM
Word Count: 433

The state-owned South African electricity producer will appoint an independent senior counsel to “establish the veracity and the basis to the allegation” made by suspended Chief Procurement Officer Solly Tshitangano, the utility’s board said in a statement Tuesday. It didn’t say how long the probe would take.

The investigation comes a year after De Ruyter took over the role of CEO with a brief to turn the utility around. The monopoly power company, which has accumulated 464 billion-rand ($30 billion) in debt, is considered the biggest threat to South Africa’s economy and its failure to maintain its outmoded plants has resulted in regular outages that have curbed economic growth.

De Ruyter has made some progress on the overhaul, including outlining a plan to split the company into three units and raising electricity tariffs. He’s also instituted investigations into continuing corruption at the utility.

Some decisions taken by the De Ruyter, whose appointment angered some of the nation’s labor unions because he is White, have raised tensions within the company.

When the utility announced in July it would cancel a contract for fuel oil with Econ Oil & Energy Ltd., an Eskom director disagreed with the findings of a probe into the matter and resigned. De Ruyter has also shuffled senior managers over performance issues.

READ: Eskom to Cancel 14 Billion-Rand Contract After Probe

The National Union of Mineworkers, Eskom’s biggest labor group, said last week it was “highly disturbed” by allegations of racism against De Ruyter for purging Black suppliers from the utility. It cited Tshitangano as saying that White-owned companies have been preferred.

The ongoing discord comes as the utility searches for a solution to address its debt pile that’s required government bailouts to service. Public Enterprises Minister Pravin Gordhan said last month that such a plan is expected to emerge by July. Eskom is also running an ongoing maintenance program to try and improve the reliability of its coal-fired power plants.

The utility’s board said the counsel it’s appointed will be able to interview any person that may be of assistance in the probe, consider any evidence and then make recommendations.

“The board unanimously and unequivocally stands against racism and sexism,” it said. “Simultaneously, however, the board has instructed the executive to promote a high-performance culture to enable the critically important turnaround at Eskom to be delivered as soon as possible.”

De Ruyter doesn’t have any additional comment beyond the statement, Eskom’s spokesman said by text message.

(Updates throughout with detail on Eskom’s operations and challenges.)
© 2021 Bloomberg L.P.