Public Enterprises Minister Lynne Brown told a media briefing she had met with the Eskom board and instructed it to remove Molefe from the post, following a decision by an inter-ministerial commission that considered the circumstances surrounding his controversial re-appointment earlier this month.
Brown said she would appoint an acting CEO within 48 hours, and hinted that she could also remove the board next month over the debacle that drew criticism from the ruling African National Congress and sent the opposition to court to demand Molefe's removal. She said she would wait however until after Eskom's annual general meeting in three weeks' time.
She would not act sooner so as not to "more scurrying into the markets". Brown said it was not clear to her at this stage whether Molefe would receive a termination payout, and she would discuss the issue with the board.
Molefe left Eskom under a cloud in November last year after he was implicated in former Public Protector Thuli Madonsela's report on state capture.
He was reappointed to his old post two weeks ago, for the stated reason that he had mistakenly been granted early retirement which would entitle him to a pension payout of R30 million, that was vetoed by Brown.
The ministerial committee said on Wednesday it was of the view that the board could have corrected the administrative errors relating to Molefe's contract in other ways than reinstating him. "We are saying that the decision that was taken was unfortunate," Finance Minister Malusi Gigaba said.
"The events of the last three weeks have been quite painful in a number of ways.... The board, if it sought to correct the anomalies in the issues that arose when the group CE resigned or retired, they could have done so administratively without having taken the decision that they took.
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"It has caused government a lot of harm... it has caused Eskom itself a lot of reputational damage, it has caused board members a lot of reputational damage." Gigaba stressed that government's decision should not be seen as a reflection on Molefe. "He is well capable. He has proven himself in a number of his previous responsibilities.
We believe he still has an enormous contribution to make to the country, in whatever way it will be." He added: "There is no decision on our part of where he is going, there are no plans to appoint him anywhere else."