South African President Jacob Zuma addresses the the nation and the press at the government's Union Buildings in Pretoria, South Africa, Wednesday, Feb. 14, 2018. Zuma resigned on Wednesday in the televised address to the nation, ending a turbulent tenure marred by corruption scandals that sapped the popularity of the ruling African National Congress and hurt one of Africa's biggest economies. (AP Photo/Themba Hadebe)
JOHANNESBURG - Former President Jacob Zuma will forever be linked with the rise of the once unknown Tegeta Exploration and Resources to a multi-billion rand enterprise.

Tegeta flourished on the back of a billion rand worth of tenders from Eskom coal supply contracts.

A flurry of leaked e-mails last year revealed how the Gupta family tightened its grip on Zuma and his family as well as government and key state-owned owned companies (SOEs). The e-mails confirmed information in former Public Protector Thuli Madonsela’s 2016 State of Capture report which alleged that certain state-owned companies dispensed favours to companies linked to the Gupta family.

Tegeta bought Optimum coal mine in Mpumalanga from resources giant Glencore. Glencore had to go into business rescue when Eskom imposed a R2.1billion fine for sub-standard coal. Mineral Resources Minister Mosebenzi Zwane reportedly travelled to Switzerland to seal the deal.

Optimum supplies Eskom’s Hendrina power station. The coal supply contract ends in December this year.

Former Mineral Resources Minister Ngoako Ramatlhodi last year made damning new allegations that former Eskom chief executive Brian Molefe and former chairperson Ben Ngubane had put pressure on him to help Tegeta take over Optimum from Glencore.

Ramatlhodi said when he refused, Zuma fired him. At the time, Duduzane Zuma’s Mabengela Investments was a 28.5percent shareholder in Tegeta.

Madonsela’s probe included finding out whether Zuma had used his position to enrich himself and businesses owned by the Gupta family and his son Duduzane to be given preferential treatment in the award of state contracts, business financing and trading licences.

By the time she released her report, there were allegations that the Gupta-owned Tegeta had benefited from a cosy relationship between the family and certain officials at Eskom.

If the leaked e-mails are to be believed, the cash-strapped Eskom essentially propped up Tegeta.

58 telephone calls

According to Madonsela, senior Eskom executives were batting for the Guptas.

She alleged that Molefe and Ajay Gupta, the eldest of three Gupta brothers, made 58 telephone calls to one another between August 2015 and March 2016.

Eskom handed Tegeta a R587million prepayment for coal, which according to Madonsela might have been in contravention of the Public Finance Management Act.

“Tegeta’s conduct and misrepresentations made to the public with regards to the prepayment and the actual reason for the prepayment could amount to fraud,” said Madonsela.

She said Eskom had acted in a manner that favoured Tegeta.

Prior to the release of Madonsela’s report, a number of financial institutions including banks had cut ties with Gupta-linked companies.

These prompted the Gupta brothers to resign from some of the companies.

In April 2016, Zuma’s son Duduzane announced his resignation from all Oakbay companies. In the resignation, Duduzane implied that he had been victimised.

“I, like any other South African citizen, have constitutionally protected rights. My history and background is no different from that of all previously disadvantaged black people,” he said.

He said that despite efforts to participate meaningfully in the economy, aspersions had been cast on him and his family.