WATCH | Inside Eskom’s 11,000% mark-up looting scandal

A mark-up of over 11,000%. This is the percentage increase that Siyabonga Nkosi allegedly charged Eskom for relays with a market price of R450 each ballooning to R50,000 per unit.

With the help of rogue Eskom workers at Matla and Kusile power stations in Mpumalanga, Nkosi allegedly pocketed millions of rand while the power utility suffered a loss of just over R76,5m through inflated invoices.

In a space of two years, Nkosi managed to build himself an empire comprising 10 luxury properties, including land in three provinces, to the value of about R50m. In the same period, 2021 to 2023, Nkosi also bought five supercars, including two Lamborghini Urus.

“Instead of delivering reliable service, Nkosi’s companies delivered invoices.” − SIU spokesperson Selby Makgotho

This information is contained in the preservation order from the Special Tribunal which the Special Investigating Unit (SIU) secured. The order gives the SIU the green light to freeze any sales of Nkosi’s 17 homes and seven cars while it recovers the stolen funds.

The frozen property includes two cars, a Porsche Macan and a Porsche Panamera GTS, and seven houses which he bought before the alleged Eskom fraud.

According to the document, Nkosi accumulated assets which he then transferred to trusts.

He bought the first property, a house in Zimbali, KwaZulu-Natal, in February 2021. The following month, he bought two properties in Zimbali and in Mpumalanga for just over R13,7m.

Two months later, he forked out R5,7m for a fourth house at Molokai Estate in KwaZulu-Natal, and land worth R4,6m in Mpumalanga.

In November 2021, he splashed out R13,5m to buy a penthouse at the luxurious Capital on the Park in Sandown, Gauteng.

SIU spokesperson Selby Makgotho said the purpose of the preservation order is to safeguard the assets so that the state can recover losses if the SIU’s case succeeds.

“The deeds registry has been directed to place caveats on the properties, while the Road Traffic Management Corporation has been instructed to ensure that the vehicles cannot be sold or transferred,” Makgotho said.

Makgotho said Eskom officials at Kusile and Matla power stations turned procurement processes into a “jackpot” which benefited Nkosi’s company.

Between 2021 and 2023, officials approved inflated and irregular purchase orders for relay equipment that is critical to keeping power stations operational.

“Instead of delivering reliable service, Nkosi’s companies delivered invoices. Eskom officials signed off on contracts that priced relays at R50,000 each, when the market price was between R180 and R450,” said Makgotho.

“This manipulation resulted in a direct financial loss of R73.6m to Eskom,” he added.

Makgotho said procurement processes were deliberately bypassed.

“Eskom officials split purchase orders to keep transactions below the R1m threshold, abusing the informal tendering system and bypassing formal procurement processes. False part numbers were uploaded to ensure only colluding vendors could bid,” he said.

Makgotho said costs were inflated for equipment that was never needed and is still unused and lying in stock years later.

The order allows the SIU to institute proceedings within 60 days from the date of the order.

Nkosi is cited both in his personal capacity and as a trustee of the Nkosi Royal Trust, Sibongukukhanya Trust and Siyabonga Kankosi Trust.

“These entities became conduits for laundering Eskom’s procurement money into prime properties and luxury vehicles,” Makgotho said.

Sowetan