One of South Africa’s most vocal and strong unions - the National Union of Metalworkers of SA - has called for the entire Eskom board to step down after CEO Brian Molefe’s fall from grace last week.
Absolutely.
Just as Molefe has fallen on his sword after former public protector Thuli Madonsela’s investigation into state capture lifted the lid on his close-knit relationship with the controversial Gupta family, the rest of the board should also accept their role in approving contracts that should not have been okayed.
According to “The State of Capture”, Molefe was often hanging around the Guptas’ Saxonwold compound, as cellphone records placed him near the compound and showed that he spoke to family patriarch Ajay Gupta more than 40 times in seven months.
Madonsela’s report - which only saw the light of day after the court quashed a bid by President Jacob Zuma and several other ministers to shove it under the carpet - revealed that Molefe and Ajay apparently made 58 telephone calls to one another between August last year and March this year.
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Sure, we can all be friends with whomever we want. However, some of these calls took place when Oakbay, a company that is owned by the Guptas and in which President Jacob Zuma’s son, Duduzane, held shares through his firm Mabengela Investments, used its subsidiary Tegeta Exploration & Resources to launch a determined bid to buy the Optimum coal mine and six other target firms from Glencore for R2.15 billion.
Other bidders made a hue and cry about this deal, feeling that the Gupta-owned company was favoured over them. Molefe defended it, and it went through Competition Tribunal clearance.
But then it emerged that some - granted not a huge percentage - of the coal Eskom buys comes from the Oakbay mines. And that coal was paid for in advance - which isn’t so kosher.
And who inks those deals? Surely not just Molefe?
Surely the entire board has a say in whether or not the company enters into contracts? That’s governance, right?
Molefe, however, has said the board was not responsible for the deal, he was. He has, however, denied any wrongdoing, confident that his name will be cleared.
I certainly hope so - he managed to put Eskom right and I think he should be seconded to SAA to sort out the mess our national carrier is in.
Molefe is not the first CEO to step down after a scandal - and he won’t be the last. I think more CEOs should follow his worthy example.
In 2007, Tiger Brands was fined R98.8 million for colluding with other bread makers to determine which company would sell bread where, which resulted in less competition. Its then-CEO Nick Dennis - who had been slammed by the tribunal - fell on his sword and quit a company he had dominated for almost a decade.
Read also: Little guy tries to leaven bread collusion saga
Dennis, however, was the only person to take this action. Who knows, maybe he was tired and fed up and set to retire anyway, and the bread scandal just nudged him along.
Regardless, it was certainly the right thing to do, and I’m glad that another Eskom board member, Mark Pamensky, has also resigned.
Another good example of board members actually accepting responsibility can be found at the public broadcaster, which has seen so many directors pack their bags that its chairperson is now the only non-executive member left.
On Wednesday, Numsa pointed out that, although the allegations in Madonsela’s report still had to be tested through a Commission of Enquiry, the allegations raised questions about who should be on the boards of state-owned enterprises.
The former Cosatu affiliate, which has thousands of members at Eskom, said that far too many SOEs had become entangled in corrupt activities.
And, frankly, any board of a company that is even tinged with the corruption brush should step down. Call it quits, and take responsibility.
We have enough problems in this country without allowing preventable situations to hobble our economy further.
* Nicola Mawson is the online editor of Business Report. Follow her on Twitter @NicolaMawson or Business Report @busrep.
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