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Matshela Koko is the key: How a Swedish-Swiss energy company colluded with then acting Eskom CEO in billion-rand Kusile deal

Matshela Koko is the key: How a Swedish-Swiss energy company colluded with then acting Eskom CEO in billion-rand Kusile deal
Former Eskom CEO Matshela Koko. (Photo: Gallo Images / Luba Lesolle)

Telephone records, internal company emails and text messages have provided the National Prosecuting Authority with a detailed picture of how former acting-Eskom CEO Matshela Koko was actively wooed by Swedish-Swiss robotics company ABB, and allegedly played a key role in providing information to the company ahead of a crucial bid award in 2015.

Matshela Koko is facing corruption charges along with several representatives from ABB’s local and European divisions who worked for over a year to ensure the company was awarded the tender for Control and Instrumentation (C&I tender) at Eskom’s Kusile project. 

Read more in Daily Maverick: Eskom Intelligence Files

The details of the NPA’s Investigative Directorate probe were revealed in a recent asset forfeiture case heard in the Gauteng Division of the High Court in Johannesburg. The court agreed to the seizure of more than R500-million in assets from former employees of ZAABB, the South African arm of ABB, and Impulse International, a company in which Koko’s stepdaughter was a director.

Koko, for his part, told Daily Maverick he was awaiting his court date, along with the full docket and charge sheet and added that the National Prosecuting Authority (NPA) had set itself up for failure.

Among the affidavits submitted as part of the forfeiture case is one by former ABB South Africa and Africa Business Unit manager, Götz Dietrich Wolff, who has agreed to act as a witness under Section 204 of the Criminal Procedure Act. Hawks investigator Wilhem Schreiber also submitted an affidavit in the civil case, detailing his investigation thus far.

Schreiber alleges that Koko “abused the trust vested in him and used his position and power to capture Eskom for his own personal enrichment and agenda. For this, he needed a company which epitomised good governance, high ethical values, and a solid partner to get the work done. That company was ZAABB.”

In his affidavit, Wolff details how senior managers in ZAABB blatantly ignored the company’s manuals and training on ethics and good governance, aggressively going after Koko as a potential “key” to ensuring they won the contract.

“ZAABB’s success in winning the C&I tender was to the best of my knowledge brought about by a scheme involving primarily certain of my fellow employees from ZAABB, including myself, employees from other entities in the ABB group of companies, a company called Leago Strategic Services and its CEO Mr Thabo Mokwena and Matshela Koko of Eskom,” Wolff wrote.

In mid-2013, the company became aware that Eskom would likely remove competitor Alstom from the Kusile project. Siemens was in the running to replace them. According to Wolff’s affidavit, Markus Bruegmann, a senior executive based in the company’s Zurich office, had told the South African team they needed to make inroads at Eskom.

‘Matshela is the key’

According to Wolff’s affidavit, Bruegmann had tried to arrange a meeting with Brian Dames, who was Eskom’s CEO from 2010 to March 2014, but failed. He then identified a new player, telling the South Africa team to try to meet Koko urgently.

In one internal email that is quoted in Wolff’s affidavit and written in German, Bruegmann said: “Ingo please try to meet M. Koko during VGB. You can easily identify him, he is the only colored man in this event (sic). He is a member of the VGB committee, maybe Gerhard can help you. Matshela is the key… get him on our booth.”

According to Wolff, Bruegmann was able to strike up a relationship with Koko which was later taken over by what Wolff calls the head of the “Capture Team”, a part of the company’s sales department aimed at capturing new business.

While the team’s name did not directly denote State Capture, their actions had all the hallmarks. The team was led by Sunil Vip who flew into South Africa several times, allegedly to meet Koko.

“I cannot recall the specific dates that Bruegmann met with Koko, but I remember being impressed with the frequent and direct access that Bruegmann enjoyed to Koko. This close relationship was later overtaken by more direct relations between (Sunil) Vip and Koko during 2015,” Wolff alleges in his affidavit.

Read more in Daily Maverick: How to beat load shedding at home… and other ideas

Bruegmann and Vip have been charged alongside Koko for their alleged roles in corruption linked to the ZAABB deal.

Asked to comment on the nature of his relationship with Bruegmann and Vip, Koko told Daily Maverick: “The state has made allegations about my relationship with Bruegmann and Vip. They must provide evidence that supports their allegations. It is not up to me to make up the state’s case – in the Daily Maverick, nogal. Daily Maverick is not an extension of the Independent Directorate.”

He added that “Bruegmann and Vip are consummate and upright professionals. Throughout my relationship with them as ABB Executives, they have always acted with integrity.”

The Leago scheme 

Koko’s version is likely to be tested against that of Wolff, who has admitted to witnessing and being party to wrongdoing in the process of ZAABB winning the C&I tender.

The tender was advertised in 2014 – around the same time Bruegmann introduced Mokwena to Wolff and the South African team, as a potential partner. Wolff said he was surprised that Bruegmann had made the introduction as he was based in Zurich and did not usually deal with local contractors or suppliers.

Investigator Schreiber says Mokwena, who owned the Leago Group, was a close associate of Koko. He allegedly acted as an influencer and information broker as the tender process unfolded in what investigators describe as “the Leago scheme”.

Wolff says he was unimpressed by Leago’s capabilities, and their inclusion as a Social Development and Localisation partner would push up the bid price by more than R130-million.

“I assumed that a part of whatever would be paid to Leago would go towards the ‘cost’ of influencing decisions at Eskom, including the award of the C&I contract,” Wolff said. He added that Vip and Mokwena were having one-on-one meetings.

“When I asked Vip what he was discussing with Mokwena, he would generally give vague and evasive answers and told me very little,” Wolff said.

But the information obtained in these discussions with Mokwena and Koko appears to have equipped the company with sufficient information on what Eskom expected ahead of the bid discussions.

According to Schreiber, Koko and Mokwena knew each other well – the two men allegedly went to university together and Koko was a groomsman at Mokwena’s wedding.

It appears the “Leago scheme” was meant to see Mokwena’s company paid by ZAABB as a subcontractor, and then kickbacks would be sent to Koko.

“Koko was mistaken regarding the trustworthiness of Mokwena and Leago since, after Leago’s appointment by ZAABB, Leago and Mokwena allegedly decided to keep its illicit gains without paying Koko his share,” Schreiber alleged.

As part of the investigation, a forensic case analyst has looked at the calls between Koko and Mokwena over several months.

“He concluded that from May 2014, there were numerous cell phone exchanges between Koko and Mokwena. The communication reduced dramatically during May 2015 (when Leago entered into an agreement with ZAABB) and spiked again in June 2015. We submit that the reason for that is that there was a falling out between Koko and Mokwena about the sharing of the advance payment,” Schreiber said.

Wolff also claimed that during the crucial stage of the bid negotiation, Vip appeared to be getting inside information about what would be required.

“I have been advised that our proposal has too many commercial deviations, which seem to be a negative aspect of our proposal. Moreover, the language, the way they have been presented, seems also not to be adequate. Therefore we should review them before the start of the negotiation and possibly remove some of them and rephrase the others,” Vip wrote in an internal email in November 2015.

In December he told colleagues that there would be a highly anticipated board meeting that would decide the fate of the deal.

“I have been advised to be patient, refrain from any hectic activities and await the events as they unfold,” Vip said.

He also told the ZAABB team that the tender should not exceed R2.2-billion in the final negotiation phase.

Wolff alleged that “the information recorded in Vip’s emails came from Mokwena and from Koko”.

In early 2015, ZAABB was awarded the contract, despite Koko being suspended in March of that year. In May 2015, Bruegmann had allegedly told Wolff that “it was very important that advance payment under the Leago contract be made right away”.

“I told him that the advance payment was only due the following month under the contract with Leago, but he told me that it had to be made as soon as possible and then said that ‘this is important for our relationship to No 1’,” Wolff said.

Wolff adds that Bruegmann had previously referred to Koko as “No 1”.

“Prior to this conversation with Bruegmann, I had not been as explicitly aware of what portion of the Leago contract was intended for Koko and this explicit knowledge brought home to me what I had gotten myself into.” 

Wolff claims he later found out that Mokwena had double-crossed Koko, keeping the advance payment for himself.

‘No Stalingrad approach’

This resulted in the creation of a second scheme, known as the “The Impulse Scheme”, which saw ZAABB subcontract Impulse International. Koko’s stepdaughter, Koketso Aren, was a director at the company.

Koko, Aren, Koko’s wife Mosima, Bruegmann, Vip and Mokwena are all facing criminal charges for their roles in the alleged scheme, which the NPA is prosecuting under organised crime legislation. The case has been postponed to 4 September.

Koko told Daily Maverick he was awaiting his court date, along with the full docket and charge sheet.

“I was arrested on October 27, 2022. It was a six-year investigation that led to my arrest. To my surprise, the state asked for a five-month postponement notwithstanding that mine was an investigation-led arrest.

“I went back to court five months later hoping for a signed charge sheet and a docket. That would tell me what case I must answer. I got nothing. The state asked for another five months’ postponement. I expect the signed charge sheet and the docket when I return to court on September 4, 2023, and nothing less,” he said.

“There will be no Stalingrad approach, but the NPA is not entitled to arrest me and then take more than 10 months investigating when they have had the benefit of six years of investigation and a ‘slam-dunk’ affidavit from Gotz Wolff, whom I don’t know and I have never met,” he added.

Koko added that the NPA had set itself up for failure in his case.

“If you think Nulane’s matter was an embarrassment, then you have not seen much.” DM

Gallery

Comments - Please in order to comment.

  • Bhekinkosi Madela says:

    ZAABB was awarded the contract in early 2015. Wolff claims in his affidavit that by June 2015 there was still communication between Koko and Mokwena and that the information in Sunil Vip’s emails came from Koko and from Mokwena. Wolff further alleges that Vip communicated via email that he had anticipated a board meeting in December 2015 that would decide the fate of the deal. It would seem the dates as stated in Wolff’s affidavit are faulty (how was Koko privy to the tender process at that stage, while on suspension since March 2015) and that’s where Koko’s stated confidence comes from that the NPA has “set itself for failure.”

    • Johan Buys says:

      You forget that ABB has already settled a R2,500,000,000 reparations claim for this corruption, so the evidence of who paid what to who is going to be easy and irrefutable. Then SARS comes calling about their 300% penalties plus interest on the profits and illegal deductions (bribes are not tax deductible expenses…)

  • Auke Van Der Meulen Van Der Meulen says:

    I think Koko might be right.
    NPA setting up to fail again! Unfortunately very true

    • Gerrie Pretorius says:

      We should all be reminded that koko is an anc cadre deployee. He is not destined for jailtime. He is to be protected at all cost. The NPA is most likely deliberate in their amateurish attempts at prosecuting any state capture case.

  • Jane Crankshaw says:

    Soon nobody in the world will want to do business with us!
    We’ve fast becoming an economic pariah!
    You can’t trust any SOE to do the right thing with taxpayers money on behalf of the people of South Africa and ordinary South Africans trying to live a reasonably decent life are paying the price.
    Now the huge fines from the company colluding with SA’s politically connected will only end up being stolen along the way….there is no justice for the taxpayer in any of this!

    • Johann Olivier says:

      – not to mention our geo-political parlous situation. South Africa is swanning with the scum-of-the-earth dictators & not exactly making friends with those countries that we’d want as commercial partners. In fairness, the capabilities of BRICS are not insignificant, but I’m not sure they’ll be as easy to squeeze, as that’s what THEY do!

  • Sue Hutchings says:

    Whoever was complicit in all of this, is never going to be held accountable anyway. That’s the way we roll in South Africa. They can investigate and prove things until the end of time but Stalingrad tactics will ensure that no-one will ever be held accountable.

  • Johan Buys says:

    they will ensure that this prosecution goes the way of all investigations of powerful and connected cadres. Nowhere. The small fry R500k, R2m and R5m cases get completed after a decade probably only because the cadre did not share the spoils. The R100m and R1b cases die a slow death.

  • Paul Hjul says:

    Unfortunately it’s not clear whether the NPA has set itself up for failure or whether they are simply using a different metric of success. An expeditious, fair and unimpeachable conviction is what I would regard as success.

    But maybe the NPAs measure of success is to be seen going in and out of court and having the public and press writing about somebody as the villain all the while fluttering about and knowing that convicting Koko etc… will only require them to prosecute others. If this is what the NPA regards as success then the repeated postponements is a good way to achieve success.

  • Epsilon Indi says:

    The arrogance of Koko in the face of criminal charges such as this makes me want to vomit.

  • Ernest Esterhuizen says:

    Cases are dragged out intentionally (stalingrad style) so that the perpetrators can walk away scot free. That is why the Koko’s and Zuma’s can demonstrate such arrogance in the face of their cases. Mkwebane’s impeachment has been allowed to be drawn out so long, that the case will still run beyond of her 7 year term in October 2023. What is there then to impeach? Does our country not have qualified and competent people who ‘fear fokkel’, to bring this circus to an end? How much longer will our patience be tested and our taxes be squandered?

  • Shirley Gobey says:

    Never forget how he lied with a straight face to Devi on Carte Blanche about the Gupta coal mine advance payment. Very dodgy character. Hope the NPA wont mess up.

  • Jellybean Jellybean says:

    I’m certainly not holding my breath.
    Another pusillanimous attempt at converting criminality into conviction

  • Libby De Villiers says:

    Surely ABB and Swiss / Swedish authorities could give us a hand in the matter. They are obviously deeply involved in this corrupt transaction and should be held accountable, not solely for the money stolen, but for their inexcusable malpractices. They would surely have all the information as to who spoke to whom and who was paid what in yet another transaction of a oh-so-holy European company makes out with some corrupt African criminal. One could only assume that some corrupt Swiss bank (laundromat) has a fat finger in the pie as well.
    If the NP messes this up, it is not only a case of corruption, but utter stupidity and and incompetence as well – shameful and pathetic.
    Can they not please, just for once, appoint a competent and intelligent legal team with real degrees, skills and work ethics to do the job for them.

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