Eskom the 'main theatre' of state capture - Jabu Mabuza

Board chairperson says most of disciplinary hearings at SOE are dealing with the contents of Treasury report

Eskom was the 'main theatre where corruption and state capture was taking place' - Mabuza

When Eskom board chairperson Jabu Mabuza took office at the state-owned entity in January 2018, he found that it was the "main theatre where corruption and state capture was taking place".

Mabuza was giving evidence at the Zondo commission of inquiry into state capture on Friday, where he testified about the state that the power utility was in at the time that he joined the Eskom board.

Mabuza testified about a Treasury report, which recommended remedial action to rid the power utility of impropriety, and said the current board had not yet seen it.

Evidence leader, advocate Vincent Maleka, SC, asked: "Why would a report such as this not be tabled before a board whose mandate was to clean up allegations of impropriety, at least with the Tegeta set of contracts?"

He was referring to Tegeta Exploration and Resources, formerly owned by the Gupta family, which is at the centre of state capture allegations. Tegeta, which started to experience operational challenges, made headlines after it received a 2016 contract, which involved a R600m pre-payment, for the supply of coal to Eskom.

Mabuza responded: "I first learnt of the report in November 2018. It has not yet been tabled to the board.

"I would argue that there is a new board since this report was served on a previous board that was in office at the time. It is that board that would have received this report."

The 2017 report was compiled as part of a probe into coal supplier contracts with the power utility with specific reference to Tegeta.

In its report, Treasury concluded that the pre-payment was unlawful and recommended remedial action for Eskom.

This remedial action is yet to be undertaken according to Maleka. Mabuza, however, said this was not the case.

"Some of the remedial action we have started since my statement to the commission and some will continue. Some land in the area of criminal procedures being put in place and there are some that we are embarking on a civil nature.

"Most of the disciplinary hearings at Eskom are dealing with the contents of the Treasury report; the Matshela Koko matter for example. [Some of] the charges he was served deal with the issue of this contract. He resigned barely hours before we had the hearings," Mabuza explained.

As it probes the capture of state-owned entities (SOEs), the commission is focusing on Eskom due to its importance to the country and the economy.

The inquiry continues.


#StateCaptureInquiry: 'We should have foreseen this' – Eskom board chair on load shedding

Chair of the Eskom board Jabu Mabuza says that the new board appointed in January 2018 should have foreseen the issue of load shedding.

"This is not an excuse, but it is important to remember that the board was put in place to deal with issues Eskom was facing at the time," he told the commission of inquiry into allegations of state capture.

"What we are now having is not the problem we had at the time, maybe we should have foreseen it," Mabuza told the commission on Friday afternoon.

The chairperson of the new board tasked with cleaning up and addressing allegations of impropriety at the power utility following allegations of state capture was responding to the commission's evidence leader advocate Vincent Maleka, SC, on the question of whether the board had reflected on the primary causes of load shedding.

This comes after the nation was rocked by a series of power cuts, the most recent one occurring over a five-day period this month.

The commission prioritised the power utility first in its investigation into alleged state capture at state owned entities (SOEs) due to its centrality to the economy.

Need for skills

The return of load shedding was described as "an emergency" by Public Enterprises Minister Pravin Gordhan last week Wednesday. Gordhan was speaking to the Portfolio Committee on Public Enterprises.

Fin24 earlier reported that the minister said he interrogated Eskom on the cause and learned that there were technical issues that had to be addressed.

"What I would like to assure [is that] everything is being done to ensure we minimise load shedding," he said.

Mabuza himself admitted before the commission that he was not that "knowledgeable" on engineering issues and that the power utility would require assistance to solve the problem.

"Clearly this problem cannot be solved by Eskom alone.

"We need to get people with skills to replace the current skill sets that are required to address issues of an operational and technical nature," he explained.

The inquiry will resume on Monday with the continuation of Mabuza's testimony.