The lawyer leading evidence at the disciplinary hearing of Matshela Koko owns shares in a firm Eskom had planned to do business with.
A copy of the award letter reportedly seen by the Business Day shows that the person with the final say on whether that service provider gets awarded would have been Koko himself.
According to a report this morning, Sebetja Matsaung is a 20% shareholder of FBC and Associates, a lead contractor of a joint venture to which Eskom had planned to award a five-year contract in 2016. The potential value of the entire contract was estimated at about R500 million.
The letter quoted by the Business Day is said to have outlined that the joint venture would be awarded on July 1, 2016, to supply scaffolding and insulation cladding to Eskom’s Grootvlei and Komati power stations in Mpumalanga.
The official who will sign the final award was to be Koko, who was the group executive of power generation and worked as the acting group chief executive officer.
It is reported that Matsaung’s company owns 51% of the joint venture, with the 49% belonging to Johannesburg Scaffolding and Noval Plant Services.
Nova Holdings CEO Bobby Pillay is said to have confirmed receiving the acceptance letter, but was withdrawn shortly afterwards after objections were received from rival bidders. He said it was worth at least “over R100 million a year”.
Pillay also indicated his firm had partnered with FCB because “they supplied the BEE [black economic empowerment]” element, and its owners had contacts with Eskom.
FBC founder Phindulo Fungisani apparently referred all queries to Matsaung, who confirmed he owned a 20% stake in the company. On his legal firm’s website, Matsaung boasts in his bio that he is an “adviser to treasurer-general for ANCYL [Pule Mabe]”.
Matsaung denied conflict of interest to the publication when asked if his company’s efforts to do business with Eskom has a bearing on his current role in Koko’s disciplinary hearing, and reportedly said the transaction was not relevant to the case.
He stressed he had “bought shares and became a director in FBC long after the tender was awarded to FBC”.
“We black lawyers struggle to get business from government, and you are now busy distracting us with something that’s not relevant.”
Matsaung is said to have protested to the Business Day that he demanded to become a director in April after investing “half a bar”.
“… And by the way, the tender is long on hold. No one commenced. And the FBC joint venture has agreed in writing to Eskom to accept a cancellation of the award,” he is quoted to have said.
Several critics had slammed Eskom’s decision to use the services of Matsaung as the evidence leader, citing an opinion from Eskom’s legal division, which allegedly described him as “too junior to chair the inquiry, and [he] lacks the experience and expertise”.