An auditing firm has referred several irregularities in Eskom’s finances to the Independent Regulatory Board for Auditors (IRBA), including the unlawful payment of legal fees for “certain board members”.
This was according to the power utility’s latest condensed group interim financial statements, reviewed by SizweNtsalubaGobodo Grant Thornton.
The document indicates the firm identified several reportable irregularities found in Eskom’s finances, which they referred to the IRBA.
Under reportable irregularities for the six months ended in September 2018, it is noted that “legal fees were paid on behalf of certain board members which were not directly related to their roles as directors of Eskom”.
The report indicates that the board members have since resigned, and that an investigation was pending.
Asked about the probe, Eskom’s media desk indicated it was working on providing answers for The Citizen, while the IRBA could not confirm which authority the matter had been referred to.
It did indicate that the body only investigated auditors and not their clients.
The Eskom report indicated that the matter was still open pending the finalisation of an investigation and a process to recover those monies.
In May, Eskom initiated litigation to get former board member Mark Pamensky to repay about R310 000 in legal fees which were incurred after he resigned in November 2016.
The other irregularity in that same period referred to that of former board member George Sebulela, who failed to declare a conflict of interest and to recuse himself on deliberations involving IT company EOH, an Eskom supplier with which he has ties. The tender process, worth billions, has since been withdrawn.
In October, Eskom released a statement announcing that Sebulela resigned after the board was made aware of certain conflicts of interest.
Yesterday, the ailing state company announced it made an 89% loss since the last financial year. The company’s profits dropped to a meagre R671 million from R6.3 billion.
Chairperson of the standing committee on public accounts (Scopa), Themba Godi, urged the utility to fix its governance issues or face further financial losses. He highlighted the crippling municipal debt owed to the utility as one area it should focus on as a matter of urgency.
“What is ironic is that Eskom has made electricity available to more people, which means that there should be more people paying. But it seems that their revenue and profits are going down so there must be some management issues that must be addressed,” said Godi.