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Brian Molefe fingers Cyril Ramaphosa for Eskom's problems

by Staff reporter
15 Jan 2021 at 20:10hrs | Views
Former Eskom CEO Brian Molefe on Friday took aim at President Cyril Ramaphosa, blaming him for having been part of the problems the state-owned power utility faces today.

According to Molefe, when Ramaphosa was appointed chairperson of government's Eskom war room while he was a shareholder at Glencore, which is an Eskom contractor, that was a conflict of interest.

Testifying at the state capture inquiry, Molefe also claimed Ramaphosa was effectively the "de facto chairperson" of Eskom when he was leading the war room.

He said this was because the Eskom board was not getting the management reports Eskom management presented to the war room every Friday. Effectively, Eskom management was reporting to the war room instead of the Eskom board.

Molefe said he was relieved when then president Jacob Zuma disbanded the war room as it was the only time Eskom management could focus on important issues.

"When I arrived at Eskom, a de facto board had been established outside the company in the form of a war room in the presidency," he said.

"Management had to report to this war room every Friday at 7am.

"When I got there, the biggest activity taking place at Eskom was reporting to the war room. From Wednesday we must start preparing for the war room report to make sure they are ready by 7am on Friday. It was an untenable situation.

"What is even more strange is that members of the legitimate and legal board of Eskom were not seeing those war room reports. It gets better because the [then] deputy president, Cyril Ramaphosa, was chairperson of the war room

"He was, in fact, the de facto chairperson of Eskom and de facto chairperson of a de facto board that was outside the company."

Molefe said what made the situation worse was that Ramaphosa was also chairperson of Glencore, which wanted R8bn "unjustly transferred" to it by Eskom.

"When the Glencore deal was done in 2012 and he bought shares, he was made chairperson. In 2014 he became deputy president of the country and chairperson of the war room.

"One would have expected that, as corporate governance requires, there must be a cooling off period. He is a person who has been saying we must renegotiate effectively a R8bn move and becomes the de facto chairperson of Eskom.

"In fact, he sold his shares to Pembani but at the time I arrived at Eskom, when he was deputy president and chairing the war room, the deal (sale of shares) had not gone through. It was awaiting Competition Commission approval, which was granted in August. I suspect there may have been a conflict of interest."

Molefe said his only sin at Eskom was trying to stop Glencore from taking Eskom to financial ruin.

Glencore, he said, had entered into a bad deal when it acquired Optimum Coal Mine, and wanted Eskom to take the financial consequences on their behalf.

To achieve this, Molefe believes, Glencore decided to sell shares to "political heavyweight" Ramaphosa because "the profitability of Optimum was dependent on the peddling of political influence".

He said it was at this stage that Optimum insisted on renegotiating the coal price it had with Eskom from R150 per ton to R530 per ton, which Molefe refused to allow.

"This, in my opinion, was  the source of Glencore's problems. It was unfair and arrogant of them to demand Eskom must pay because Eskom was unfairly excluded by them in the super-profits when times were good," Molefe said.

"Optimum demanded the price of coal be raised to R530 per ton from R150, which would have a meant a transfer of R6bn over three years. Add to this the R2bn write-off they wanted.

"I was having Eskom's interests and those of the country at heart because what was happening was going to financially ruin Eskom."

Source - TimesLIVE

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