How the Guptas took over Optimum coal mine with Eskom
CAPE TOWN - Business rescue practitioner Piers Marsden has explained how and why Optimum coal mine was purchased by the Gupta family in a parliamentary meeting with Cabinet ministers.
The Portfolio Committee on Public Enterprises is currently being briefed on the governance of Eskom and how the Optimum coal mine was purchased by the Guptas.
Marsden took over the leadership role at Optimum in August 2015.
“We knew from the start that Eskom would be a fundamental player in the process,” he said.
“Optimum had a long-term coal contract with Eskom. It was a loss-making mine.”
Optimum and Eskom had a co-operation agreement to create a way forward. For Marsden, Eskom tragically failed to assist in this co-operation agreement and therefore a fine was imposed on the mine.
A R2.1 billion fine was imposed based on historic coal deliveries, provided to Eskom out of spec.
“A variety of engagements were held to keep the mine running for the next two months,” Marsden said. “This engaged the supply of coal.”
By October is became absolutely clear that a pre-negotiated coal contract would be rejected with the current shareholding.
“We tried to pivot to find a potential purchaser,” he said. On October 7, the mine signed a binding term sheet with a third party, Pembani. The agreement was that the third party had to find a solution with Eskom to overcome the onerous supply agreement.
“Towards the middle and latter part of October, that transaction failed,” he said. “We implored Eskom to find a solution to save several thousands of jobs and retain the supply of coal to Eskom.”
Marsden, after watching a Carte Blanche episode in June 2016, then informed the Hawks to investigate after he felt there was something dubious going on.
Tegeta at the time was owned by the Guptas and Duduzane Zuma.
In 2016 Eskom paid Tegeta an R586 million prepayment for coal at the same time as Tegeta revealed to Marsden that they were R600 million short on the R2.15bn deal with Glencore.
“We believed the quantum and timing of that was something that required further investigation”.
It was at this time that Glencore said they would sell its Optimum mine in December 2015, but according to Marsden, the Guptas (Tegeta) did not have the funds to buy the mine outright.
“Tegeta was supposed to pay Glencore on 13 April,” he said. “Two days before the sale was due, (former Oakbay CEO) Nazeem Howa phoned. I was advised that they were R600m short on the purchase agreement.”
“I was asked to approach the banks to fill the shortfall,” he said. “The consortium of banks asked me to advise Howa that they would not fund the R600m shortfall.”
“On 14 April the amount was paid.”
The Carte Blanche episode in June showed that according to suspended Eskom CEO Matshela Koko, Eskom made a prepayment of R586m to Optimum for coal, Marsden then made the realisation that there was something dubious and illegal going on.
According to Marsden, it was basically because of a meeting between Eskom and Tegeta, that happened on the same day, and this R600m shortfall on the purchase agreement that it all became clear.
For Marsden Eskom helped the Guptas buy the mine through the prepayment.
He then called the Hawks.
BUSINESS REPORT ONLINE