LIVE FEED: State capture inquiry - February 11, 2021
Johannesburg - The Commission of Inquiry into allegations of state capture will on Thursday continue to hear Eskom-related evidence from former board member Mark Pamensky.
Deputy Chief Justice Raymond on Wednesday expressed his disappointment with the Eskom board’ approval of the R1.68 billion prepayment to fund the acquisition of Optimum Coal by a Gupta owned company in 2015.
Two former board members, Professor Pathmanathan Naidoo and Venete Klein, gave evidence at the commission of inquiry about the R1.68bn prepayment.
Naidoo told the commission that the board’s understanding was that Eskom was dealing with the then Glencore-owned Optimum Coal as there was no Gupta-owned Tegeta Resources at the time.
According to Naidoo, the prepayment would ensure security of supply to the Hendrina and Arnot power stations in Mpumalanga as well as save jobs.
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He said the prepayment would also ensure that Optimum Coal would migrate from being under business rescue to becoming a going concern and assist with its liquidity challenges.
Zondo questioned why the board would authorise an agreement with Optimum Coal’s proposed owners.
”You can’t conclude a contract with proposed owners and not the current owners. How could none of the board members say change this submission?” asked the country’s second most senior judge.
Justice Zondo continued: “It is troubling me that members of a board of such an important state-owned entity know that they were being asked to authorise a transaction of a very large amount R1.68bn”.
He said the board was very negligent and that it may well be much more than that.
”It is troubling,” said Justice Zondo.
Naidoo admitted that the change of Optimum Coal’s ownership had not yet occurred and that this was reflected in the submission to the board.
He said the board’s investment and finance committee received an e-mail from former Eskom company secretary Suzanne Daniels for the consideration of the R1.68bn prepayment.
Klein said the Eskom board was facing more critical issues at the time with the country facing rolling blackouts.
Klein described the wording of the submission to the board as quite cunning.
Justice Zondo said the board cannot criticise management because they put in the submission from the proposed owners of Optimum Coal.
”It’s just difficult to understand how it possible that so many people on the board did not pick it up. There probably was a failure on the board’s part if they thought they were authorising payment to another entity when there is documentation showing that it’s, in fact, a different company,” he said.
Klein responded and indicated that she completely concurred with what Zondo said.
She also disputed Eskom’s former acting chief executive Matshela Koko‘s claims that she tried to organise business for her husband Dr Harold Klein and that his refusal to do so was the reason she resented him.
”I refute Mr Koko’s version completely,” Klein told the commission.
Klein, who served on the Eskom board between December 2014 and May 2017, said her husband’s company was on Eskom’s project management panel as he is a civil engineer and that she had asked Koko to intervene in a matter after suspecting fronting following Koko’s appointment as the power utility’s interim chief executive.
She said she could not take the matter to the board as it was operational and asked the commission to go through her declarations to check if there was anything untoward.