Storm brews over Treasury's Eskom report
On Friday, Eskom’s head of Group Capital, Abram Masango, was suspended with immediate effect pending an investigation into serious allegations of impropriety against him relating to the construction of the Kusile power station.
A report on a probe commissioned by the National Treasury into procurement procedures at Eskom and logistics firm Transnet has recommended criminal investigations into the conduct of some senior officials between 2012 and 2016.
The Fundudzi Forensic Services report, published by the National Treasury on Friday, details findings of a forensic investigation into the appointment and management of advisory work done by McKinsey and Company South Africa, Regiments Capital Management and Trillian Capital at Eskom and Transnet.
It says the police and the Hawks, should investigate whether officials at Transnet and Eskom, including Anoj Singh, a former group chief financial officer at both utilities, as well as those from McKinsey and Regiments did not receive gratification in terms of the Prevention and Combating of Corrupt Activities Act.
The Treasury asked Fundudzi to probe whether Singh facilitated the appointment of McKinsey, Trillian or Regiment Capital in Eskom and Transnet and whether this amounted to abuse of a position of authority, a breach of trust or violation of the law.
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During the period 2012 to 2016, Transnet appointed McKinsey for advisory services on several projects, including the procurement of 1064 locomotives.
The report finds that McKinsey and Singh compromised the integrity of the procurement process by sharing pointers on a procurement to be initiated prior to the approval of former Transnet group chief executive Brian Molefe who, like Singh, reprised his role at Eskom.
McKinsey and Regiments commenced with work relating to projects before the conclusion of the procurement process, with the former using the “letters of intent” issued by Singh as the basis to commence with the projects.
McKinsey, Regiments and Trillian were paid out-of-pocket expenses despite not producing supporting documents.
The three companies were paid R1.5 billion in respect of the contracts awarded between 2012 and 2016.
The forensic report says there is no evidence that Trillian - a company linked to the Gupta family accused of using its ties with former president Jacob Zuma for financial benefit - performed work in respect of financial structuring advisory services to support an invoice of R11.4m approved by Transnet group chief procurement officer Thamsanqa Jiyane.
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A number of top officials have been implicated after the National Treasury released an explosive forensic report detailing how some senior executives in the company abused their authority and leaked confidential information.
Former Eskom executives Matshela Koko and Suzanne Daniels are among those facing a string of allegations in the report into financial irregularities.
Commenting on the report, Khulu Phasiwe, Eskom’s national spokesperson said: “We are investigating the allegations. Eskom is co-operating with these law enforcement agencies in an effort to get to the bottom of these issues.”
The report concluded that Koko, Daniels and Dr Ben Ngubane may have leaked confidential information which amounted to abuse of their positions of authority, resulting in a breach of trust and violation of a legal duty or a set of rules.
Koko has been implicated in giving Gupta-owned Tegeta preferential treatment at Eskom’s tender committees.
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Responding to the allegations levelled against him in the report, Koko said they were not new.
He said criminal cases had already been opened by Outa and the DA, which were being investigated by the Hawks.
“Treasury should desist from being used by war lords. People keep asking if I’m taking the report for review, I’m not taking this for review. If they have evidence that I did something wrong, they must assist the police with their investigations and also approach the Zondo commission to get to the truth. Also, once you start reading the report you will see that my name has just been parachuted because it does not answer what exactly did Koko do for the coal supply to be unlawful.”
In addition, Koko denied that he had met the Guptas or given preferential treatment to Tegeta.
The 700-page report further alleges that Eskom executives who concluded the coal supply agreement between Eskom and Tegeta did not obtain approval to procure beyond the lifespan of the medium-term mandate from the board.