The Treasury report has called for Anoj Singh and other Gupta lieutenants involved in the capture of Eskom - among them former acting CEO Matshela Koko - to be investigated.
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The National Treasury faced the alarming prospect of having to raise hundreds of billions of rands after the Development Bank of Southern Africa laid down the law to embattled power utility Eskom, warning it to suspend chief financial officer Anoj Singh.

The ultimatum by the DBSA to recall its R15-billion loan, as well as serious concerns raised by two other top lenders, sent Finance Minister Gigaba scrambling to save the utility, which is at the centre of the raging state capture controversy involving the Gupta family and top officials at Eskom and in the government.

And, in the first indication that the deluge of damning Gupta e-mails could at last be acted upon at official level, a hard-hitting Treasury report is calling for a forensic investigation involving Singh and dubious contracts with Gupta-linked Tegeta. The contracts came to the fore at Eskom's financial results presentation last week, when R3-billion in unauthorised spending was highlighted.

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During a crisis meeting with the DBSA, Gigaba called Public Enterprises Minister Lynne Brown and discussed the importance of suspending Singh as a signal to markets. He was placed on special leave hours later..

A government source on Thursday said: "It's a major sovereignty risk ... It's R350-billion because once DBSA happens it triggers everyone else. If they all pull out it means Treasury must go and find hundreds of billions by tomorrow."

It was in fact R361-billion in debt whose recall would have been triggered by the DBSA recalling its loan. Gigaba's department would have had to fund the R267-billion of this debt that it has guaranteed.

The Treasury report has called for Singh and other Gupta lieutenants involved in the capture of the power utility - among them former acting CEO Matshela Koko - to be investigated.

Gigaba, known for his links to the Gupta family, hinted strongly at a new sense of government urgency to rectify a looming financial disaster at Eskom, saying this week: "The issues being raised are quite grave. They are grave for governance. They are grave for how the investor community, especially the lenders and rating agencies, and the public, views the governance of our state-owned companies."

He said he was worried about the influence of the Gupta family, accusing them of using their friendship with President Jacob Zuma to secure contracts with state-owned companies.

Singh, the Gupta family and Zuma have denied any wrongdoing.

The Sunday Times has had sight of three letters sent to Eskom between Tuesday and Thursday by Rand Merchant Bank, the DBSA and Barclays Africa. They raise grave concerns about Eskom's qualified audit as well as its poor governance. The letters reveal that Eskom earlier unsuccessfully attempted to get the DBSA to amend a covenant requiring a clean audit, three days before it postponed announcing its results.

The DBSA rejected this, saying it was "directed at extricating Eskom from the consequences of its own conduct, with only lip service for the effect on others".

CEO Patrick Dlamini said in a letter: "Indeed it does not appear to the DBSA that Eskom appreciates the significant commercial financial and reputational risks to which Eskom has exposed the DBSA and its stakeholders following on the event of default and the request made by Eskom in its letter dated July 7."

The draft of the Treasury report last year had found, among other things, that Eskom's R659-million prepayment for Tegeta's Brakfontein coal mine should be considered a loan and have interest charged. The report also suggested Singh, Koko, and former CEO Brian Molefe bent over backwards for the Guptas when they ignored several critical breaches by the company in the lucrative contract.

Recent media reports have put the value of the Guptas' coal supply contracts at about R12-billion over the next 10 years.

Forensic investigation

The latest Treasury move against the Gupta-linked cabal at Eskom is contained in a final report on the department's investigation into the supply chain process followed in the appointment of Tegeta Exploration and Resources as a coal supplier to Eskom. The R4-billion 10-year deal was investigated as part of the Treasury's chief procurement officer's investigation into state tenders worth more than R10-million.

The Sunday Times has reliably learnt that new Treasury Director-General Dondo Mogajane approved the first of three recommendations flowing from the report, including that Treasury's chief procurement officer appoint a firm to do a forensic investigation as well as ask law-enforcement agencies to investigate the matter in terms of the Prevention and Combating of Corrupt Activities Act.

The Treasury also investigated Singh's role in shady Transnet contracts.

Gigaba's spokesman, Mayihlome Tshwete, confirmed that the report had been finalised, but said the department "was processing" it.

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