CAPE TOWN - Eskom’s reinstatement of two executives who have been suspended on serious charges last year, will raise concerns for investors.
In light of the power utility’s announcement on Wednesday that Matshela Koko and Prish Govender were reinstated, there is a reasonable concern on how investors will react to this decision.
Meanwhile, the Democratic Alliance (DA) continues to pursue criminal charges against Koko for misconduct.
The newly-reinstated executive, Koko was accused of awarding contracts to a company, affiliated with his stepdaughter. Fellow executive, Govender faced charges for allegedly playing a role in the Trillian debacle.
The news of the reinstatement surfaced by the memorandum being leaked. This raises further concerns about corporate governance at the state-owned utility, says DA’s Natasha Mazzone.
“The entire board at Eskom is highly compromised. The fact that this memorandum was leaked shows that Eskom had absolutely no intention of informing the public that the two have been reinstated.”
Despite the reinstatements, investors are yet to react to the news, says Energy expert, Chris Yelland.
“An important point is the reaction of the lenders and the financial community to this ongoing, poor governance or absence of governance and complete mismanagement at Eskom.”
Although it will be business as usual for Koko and Govender as they return to work, they will however still have to answer to a parliamentary inquiry, face possible criminal charges and a state capture investigation.
Meanwhile, Koko’s reinstatement will come at a cost to the power utility.
It is “just and equitable” that the cash-strapped Eskom should foot his legal costs, says Koko.
He maintains that the charges against him proved to be invalid.
Eskom seems to agree with the executive, saying that it would foot the bill if it is presented to them.
“We have not been presented with the costs by Koko’s legal representatives but, if and when that happens, Eskom will pay the standard costs that we usually pay for such cases,”, said Eskom spokesperson, Khulu Phasiwe.