Former Eskom company secretary Suzanne Daniels defends R1.68bn guarantee given to Gupta firm

19 February 2021 - 20:40
By Aphiwe Deklerk
The board had authorised Eskom executives to negotiate a prepayment to Optimum Coal for the delivery of coal.
Image: Business Times The board had authorised Eskom executives to negotiate a prepayment to Optimum Coal for the delivery of coal.

Former Eskom company secretary Suzanne Daniels has told the Zondo commission that the questionable R1.68bn guarantee granted to Gupta-owned Tegeta Exploration and Resources was a better deal for the power utility.

Daniels was testifying at the commission on Friday afternoon, being quizzed by evidence leader advocate Pule Seleka on the legality of the deal.

She said the alternative to the deal would have been a prepayment for coal to the same company for R1.68bn.

The Sunday Times first reported about the dodgy deal in 2017 after former CFO Anoj Singh, a known Gupta associate, was placed on special leave.

At the time the newspaper reported that the guarantee had helped Tegeta Exploration and Resources to buy Optimum Coal in December 2015.

The board had authorised Eskom executives to negotiate a prepayment to Optimum Coal for the delivery of coal.

“The issuing of a guarantee, as strange as it may seem, was actually a better risk mitigation factor for Eskom because ... imagine had we paid the money in cash over to the supplier, there would have been greater issues,” said Daniels.

She had supported the decision because it was a better option for Eskom to hold on to the cash at the time.

“We would have given 12 months of cash, actually,” she said.

Seleka, however, questioned the real motives of the guarantee.

“You see, we need to just get facts right. When Tegeta was concluding the sale agreement with Oakbay, the business rescue practitioner says in his affidavit ... that the consortium of banks require Tegeta to show that it has sufficient funds to do the deal ... that's on the one hand.

“Now Tegeta seems to not have had the funds required. What then happens is early on December 10 2015 ... you see that e-mail that comes to 'businessman' and it sets out what essentially became the terms of a guarantee to be issued by Eskom in favour of Tegeta,” said Seleka.

He said based on the facts, the idea of a guarantee did not originate from Eskom but came from outside Eskom to presumably demonstrate that Tegeta had sufficient funds to complete the sale.

Daniels considered this but maintained it was better for the power utility to do the guarantee.

Eskom and the Special Investigating Unit are in court to try to recover monies lost by the power utility due to the deal.

Among others, they have cited Singh, Daniels, former CEO Brian Molefe and former acting CEO Matshela Koko.

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