Eskom’s announcement that it will implement an independent review of its business relationship with Trillian in view of the R495-million prepayment has raised questions on whether the board has not committed dereliction of its fiduciary responsibility by failing to suspend CFO Anoj Singh.
When asked on what basis Singh remains in his position despite prima facie evidence of financial impropriety, Eskom interim chairperson Zethembe Khoza told the media this morning: “We can’t take action against Anoj Singh because we have to establish the facts. We can’t suspend him now.”
The CFO admitted during the integrated annual results press conference that he personally signed a letter committing Eskom to guarantee R1.6 billion to Tegeta Resources through Absa.
Business Day reports that this guarantee enabled the “Gupta-owned Tegeta Resources … to purchase the operations of Optimum Holdings and forcing out global commodities trader Glencore. Without external help, Tegeta would never have been able to pay the R2.7-billion asking price”.
According to the Tokyo Sexwale-commissioned Budlender investigation report, “on 14 April 2016, Trillian Management Consulting [a 100% subsidiary of Trillian Holding Company] submitted invoice ESK2016-MCO1 to Mr Anoj Singh of Eskom”. Singh has never publicly denied this claim.
The invoice is, according Geoff Budlender SC, stamped as “paid” on the same day. It is for an amount of R30 666 million for services described as “professional fees: Pro-rate share of Eskom Corporate Plan Deliverable”.
The investigation uncovered that two more invoices were “paid” on August 10, 2016, for a combined amount of R235 million for services that included, among other items, “claims” and “Duvha”. In November 2011, the Duvha station coal-fired turbine exploded because of an “operator error”.
The investigation found that instead of dealing directly with the insurer, Eskom had sought the services of a middleman, Trillian, “through arrangements made by Anoj Singh, Dr Wood and the CEO”.
On ‘Eskom Corporate Plan’, Budlender wrote: “In December 2015, Eskom had to prepare a corporate plan in terms of PFMA. Anoj Singh of Eskom asked Regiments [Capital] to assist in this regard.”
The investigation also revealed: “R30-billion loan facility [Goldman Sachs]: The team analysed a proposal by Goldman Sachs and made recommendations to Anoj Singh. Eskom had the capacity to do this – it is what their Treasury did. They were skilled and experienced in the field.”
When McKinsey “due dilligence” flagged Trillian’s shareholder Salim Essa as a “politically exposed person (PEP)”, a former Trillian CEO said he “would discuss the matter with Anoj Singh at Eskom”, and assured his colleagues Singh would appoint Trillian.
In protest, Sexwale, the former chairperson of Trillian, resigned from his nonexecutive position on the board. Budlender expressed the concern in his report that Trillian executives, including Dr Woods, refused to cooperate.
Budlender also stated in his report that their estimated R250 million for work billed for, but never executed, was a fraction of what Eskom paid Trillian. During yesterday’s conference, this claim was corroborated when the Eskom acting chairperson and executives confirmed it was R495 million
When asked how the Gupta-linked company managed to score R495 million from Megawatt Park, Khoza and acting CEO Johnny Dladla both said when searching for the Trillian contract, they could not locate it because it was “subcontracted to McKinsey”. McKinsey outright denied this claim.
Eskom management spokesperson Khulu Phasiwe and board spokesperson Khulani Qoma were sent a list of questions, which included whether the ‘independent review’ will be compromised if it is conducted with the CFO remaining in his position, as most of the allegations are aimed at his division.