Cyril Ramaphosa urged to appear before state capture probe
Johannesburg - The allegations levelled against President Cyril Ramaphosa by former Eskom chief executive Brian Molefe are serious and place the ANC leader at the centre of decision-making at the embattled power utility.
This is according to political analyst Dr Ralph Mathekga, who urged Ramaphosa to also appear before the Zondo Commission and give his version of events.
This comes after Molefe told the Zondo Commission this week that Ramaphosa had been involved in state capture and the peddling of political influence for personal benefit.
He said Ramaphosa used his position as the country’s deputy president to protect and secure lucrative coal deals for mining giant Glencore after it gave him a stake and appointed him chairperson.
Molefe added that Ramaphosa and Public Enterprises Minister Pravin Gordhan “brought back load shedding” at Eskom when they took over in 2018, saying they defunded and forced out skilled executives as part of a ploy to collapse the power utility and pave the way for its privatisation.
Mathekga said: “If you look at this thing, it has always come out as if we knew the usual suspect but when you hear someone implicating the president things are taking a turn. If the president has got nothing to worry about, he can just go and give his version as he always said he is available. Now he is in the position where he might have to do that.”
Mathekga said Ramaphosa must lead by example. “Those who criticised him have always said he is not beyond reproach. It means that whenever he is trying to put pressure against those who are facing difficulties they end up saying ‘Mr President yourself’ as well. So when you are in a difficult situation where you have to lead by example, you might have to lead all the way because people will be saying you took this responsible position and now that your name comes out you are no longer willing to follow through.”
Mathekga’s views were echoed by another political analyst, Dr Metji Makgoba, who said Ramaphosa should appear before the commission and prove that he is clean. “This tells us that the whole infrastructure of the ANC is rotten because while Ramaphosa preaches on being an anti-corruption and antistate capture, he was also involved in processes of taking advantage of the loopholes of state entities and how they do businesses with the private sector. As a responsible person, he needs to assure the nation that whatever happened concerning how he bought the shares was legal and there is nothing corrupt about the exchange,” said Makgoba.
Molefe, who has been accused of running Eskom to its knees despite being credited with ending load-shedding in the country in 2015, stunned the Zondo Commission when he fingered Ramaphosa for corruption during his brief testimony.
He told the commission that Ramaphosa was brought in by Glencore after it acquired Optimum Coal Mine (OCM), because the multi-national company was looking for political protection.
This was after he stopped Optimum’s attempt to renegotiate its coal supply agreement with Eskom following his appointment as chief executive in April 2015.
In terms of the proposed deal, the cash-strapped Eskom would have paid Glencore an additional R6 billion. Molefe said Glencore bought OCM 2011 without doing due diligence on the company or the historic coal supply agreement.
“Instead of conducting due diligence and understanding how the coal supply agreement worked, they sold 9.64% of the shares in the newly acquired company to Mr Cyril Ramaphosa,6 a political heavyweight, and made him Chairman of the newly acquired company. That was a strategic decision to use the former Secretary General of the African National Congress, former Secretary General of the National Union of Mineworkers and a member of the ANC’s National Executive Committee at the time,” Molefe said.
“They knew that the profitability of the company could only come from a successful renegotiation of the coal price and ignoring by Eskom of the penalties that were accumulating at the time. Mr Ramaphosa was their bet. The profitability of Optimum was therefore dependent on the peddling of (political) influence and the extent to which Glencore would be able to exert pressure on the Eskom directors and management, and not on the fundamentals of the company that they had acquired.”
Molefe said the profitability of OCM was dependent on the peddling of political influence and the extent to which Glencore would be able to exert pressure on the Eskom directors and management, and not on the fundamentals of the company that they had acquired.
“This, in my opinion, was the source of Glencore’s problem. They had made their bed and needed to lie on it. It was unfair and arrogant for them to demand, as they were doing, that Eskom should pay for the irresponsible manner in which they had tied themselves into the proverbial knot.”
Molefe added that Glencore demanded that the power utility increase the price of coal per tonne from R150 to R530, which would mean a transfer of R6 billion to the company over three years, from 2015 to 2018.
“Add to this the R2bn write off of the penalties. The amount that Glencore wanted Eskom to pay for their original mistake of not doing due diligence was R8bn. R8bn! Chairperson,” Molefe said.
He told the Commission’s chair, Raymond Zondo: “Your observation that there was a complete change of attitude on the part of Eskom on the deal that had been proposed and had been supported by various levels of management when I arrived at Eskom, is absolutely correct. I am not ashamed of this change in attitude that occurred when I arrived.
“I was having Eskom’s interests and those of the country at heart. What was happening was wrong on many fronts and was literally going to financially ruin Eskom,” he said.
“The Glencore position would have seen an inequitable situation. The poor and most vulnerable in the country would subsidise the dealings of the rich. There was no way that I could, with a clean conscience, attend public meetings and shout from the rooftops that Soweto residents needed to pay their debts to Eskom when I was allowing international corporates to disadvantage Eskom on many fronts,” added Molefe.
He also told the commission that the utility had a “de facto board” established outside of the company in the form of a war room in the Presidency.
“Management had to report to the war room,” explained Molefe.
He further explained that Ramaphopsa, who was deputy president at the time and was responsible for government business, chaired the war room. “This effectively made him the de facto chairperson of Eskom and put him in a powerful position to pursue Glencore’s agenda at Eskom. Its membership included people like Prof Anton Eberhard from UCT (University of Cape Town), who has never uttered an intelligent academic por sane word about electricity or corporate strategy in my presence,” he said.
Molefe said he later realised that the war room was not about load shedding and turning Eskom around, adding that he stopped attending its meetings because he was uncomfortable with the war room.