Parliament – Public Enterprises Minister Lynne Brown has instructed the board of the South Africa's power utility Eskom to rescind a decision to reappoint Brian Molefe as chief executive officer.
Brown made the announcement in Parliament at lunchtime on Wednesday.
The decision was taken by the inter-ministerial committee, appointed by President Jacob Zuma, on Wednesday following public outcry over Molefe's return to the power utility a few weeks ago.
"Collectively looking at the facts and in the interest of the country and good governance, I thus directed the Eskom Board to rescind the decision to reinstate Molefe as Eskom CEO. Due processes must be followed in the filling of the role of Eskom Chief Executive. The board must provide me with two names within the executive (at Eskom) to act as CE. I Intend appointing an acting GCE within the next 48 hours to ensure continuity," Brown said.
Molefe returned to Eskom following his short stint as an ANC MP in a few weeks ago.
He had resigned from the company in November 2016 last following the release of the Public Protector's State of Capture report which showed that he had been in constant contact with the Gupta family.
His return was not well received by political party's and civil society.
Brown was forced to defend her role in the saga of Molefe’s controversial return to head the power utility.
But it was the ANC's National Executive Committee meeting at the weekend that took that decision that Molefe's reappointment should be rescinded.
Brown appeared before the Select Committee on Communication and Public Enterprises and conceded that she had “poked my nose into a hornet’s nest at Eskom” when five weeks ago she had instructed the Eskom board to reconsider its proposed pension payout of R30m to Molefe.
Last week Brown announced a probe into procurement at Eskom dating back to 2007, stressing that she wanted it to get to the bottom of allegations of corruption involving the utility’s coal contracts. Brown announced the inquiry two days after she was flayed by Parliament’s public enterprises portfolio committee for allowing the reinstatement of Molefe as CEO of Eskom, and accused by the ruling African National Congress (ANC) of lying to MPs.
On Wednesday, she said: “To say that the consequences of this decision unleashed a storm is to grossly understate the effect. Within moments of publication of the announcement by Eskom chairperson Dr Ben Ngubane that Mr Molefe was to return as Eskom’s Group Chief Executive, the issue was thrust to the centre of societal and political contestation.
“Old allegations have re-surfaced and new ones have been brought to light. These include serious allegations – that are regularly reported, and widely perceived, as fact,” she told the committee.
“Do I regret interfering in the proposed Molefe pension pay-out? Well, I can’t say I enjoy having my integrity questioned. But, in the end, if our state-owned companies are to perform to their true potential at the vanguard of the developmental and transformative state, we must clear the fog of allegations of impropriety that envelop them – one way or the other.”
Giving the select committee feedback on the developments at Eskom, Brown said she was a deployee of the ruling party and was therefore subject to the decisions of the ANC which has urged government to reverse Molefe’s reappointment.
“Since Mr Molefe’s return to Eskom I have briefed the top officials, the Deployment Committee and National Executive Committee of the ruling party on the matter. The ruling party requested Government, led by President Zuma, to resolve the matter.
“The President established an Inter-Ministerial Committee on Eskom led by the Minister of Justice and Correctional Services, the Honourable Michael Masutha and includes the Ministers of Finance, Malusi Gigaba, Minister of Energy Nkhensani Kubayi and I. The IMC has held several discussions and reached consensus.
“I know that members would like me to announce the outcome of these deliberations. But all I can promise is that the announcement will be made soon.”
On a court application brought by the opposition Democratic Alliance, Brown responded by saying: “I have submitted an affidavit, and instructed my legal team to withdraw my opposition to Part A of the relief sought – that I set aside my appointment of Mr Molefe.
“I will abide by the court’s decision on the legality of Mr Molefe’s return to Eskom. This is consistent with my support for Mr Molefe’s return to Eskom on the proviso that his return is legal.”
Brown, in her statement to the committee, defended Eskom by highlighting its successes. “A word or two about Eskom’s performance. It is not all doom and gloom, as some would have it.”
Brown said the company was an important economic driver, was the fourth largest utility company in the world, operated the only nuclear power station on the African continent, employed 46,000 people, had recorded a profit for the 2016/17 financial year, was ahead of schedule on its revised build-programme, and provided more than 90 percent of the country’s electricity.
“These are not green shoots, they are giant trees,” Brown said.
Brown had previously said she had only learnt in April that Molefe did not resign in November but had in fact sought early retirement, hence the board’s proposal to pay him R30 million in a pension settlement.
Molefe was thought to have resigned in the wake of the Public Protector’s report into State Capture in which he was mentioned and Brown initially defended the decision to send Molefe back to Eskom, saying he has not been found guilty of anything since Madonsela’s report was never investigated further.