Independent Online

Sunday, August 7, 2022

Like us on FacebookFollow us on TwitterView weather by locationView market indicators

#StateCaptureInquiry: Mabuza says Eskom won't pay back R25bn Huarong loan

Published Feb 22, 2019


JOHANNESBURG - Eskom chairperson Jabu Mabuza told the Zondo inquiry on Friday that Eskom would not be paying back the multi-million rand loan it received from a Chinese asset management company Huarong Energy Africa.

In 2017, Eskom received a U.S.$2 billion (R25 billion) loan from China's Huarong Energy Africa to build or refurbish power stations. 

Story continues below Advertisement

The then interim group chief executive officer (GCEO), Shaun Maritz, was then implicated in a kickback scandal in which he was alleged to have signed off a questionable R400 million payment from Eskom to an unknown Hong Kong bank account. 

Mabuza said Maritz was suspended for going against all legal advice and signing the documentation that would have committed the power utility to a pre-payment of R340 million to Huarong.

"Eskom has taken a view that they we not going to pay R25 billion to Huarong Energy. I recently received a call to have coffee with chairman of Huarong, but I declined," he said.

Beijing-based media group Caixin Globa reported on Friday that Huarong is warning of a slump in 2018 net profits as it is expected to record a 90 to 95 percent year-on-year decrease in net profit due to the depreciating value of its assets and an increase in payments for loans, among others.

Huarong former chief executive and chairman, Lai Xiaomin, has been indicted and is awaiting trial for corruption and other offences.

Meanwhile, Mabuza said after his appointment as board chairperson, he went to Megawatt Park and informed Maritz that he was being removed as the GCEO and that he should continue in his previous post as chief information officer. 

Story continues below Advertisement

As for the the resignation of other board members, Mabuza said George Sebolela had not disclosed his relationship with technology firm EOH and had resigned due to a conflict of interest after the media got with wind of how he was related to a bidder in the IT industry.

Mabuza said when he arrived at Eskom in January last year, the power utility was facing severe liquidity challenges and its funders would not offer any money unless the leadership was changed. He said Eskom was making R45 billion but paying R50 billion in deb-servicing cost

Mabuza said the board initially reported R3 billion of irregular expenses, but the figures increased to R19 billion six months later after further investigation.

Story continues below Advertisement

But he said Eskom has been able recover R1.1 billion from consultancy firm McKinsey and Company, and that the power utility was in the course of recovering R600 million from Trillian Capital Partners.

Mabuza will resume testimony at 9am on Monday.

African News Agency (ANA)

Related Topics: