Eskom board members had less than 24 hours to individually make a decision on the prepayment of coal procurement at R1.65bn a year from Gupta-owned Optimum coal mine.
Former head of legal and compliance at the power utility, whistle-blower Suzanne Daniels, made the revelation at the state capture inquiry on Monday. The comment left deputy chief justice Raymond Zondo stunned, as he questioned why this had been the case.
Daniels, who was secretary of the entity in 2015, said she was instructed to send documents which sought board members' approval of the R1.65bn prepayment. They were expected to respond via e-mail, the following day at the latest.
“Why was it thought necessary to let a matter involving such a big amount be decided by a way of roundabout, without the benefit of a proper discussion among board members?” he said.
Daniels responded it was a matter of practicality.
“I think at the time, given the time of year, it was practicality, ostensibly, but there was a rush to get a decision, so the instruction was to send out the document,” she said.
Equally stunned, evidence leader Pule Seleka probed whether there had been an explanation or document which was relied upon to determine the urgency.
“There was no explanation other than there was a threat to security of supply,” she said.
Daniels said only two board members raised concern over the urgency.
Providing background to the matter, Seleka said Eskom took some decisions in relation to Optimum coal mine, which in 2014 had been in a challenging position regarding the provision of coal to Eskom. It was seeking to negotiate better deals with the entity.
The then newly appointed CEO Brian Molefe terminated all agreements and negotiations, according to the commission.
“The timing is important because this matter was referred to the board on the 23rd of April 2015, the board did not make a decision on the issue, rather it decided to refer to it to the newly seconded Mr Brian Molefe ... the gains that have been made in the negotiations process with Optimum saw the beginning of the end of that process as Mr Molefe terminated the co-operation agreement, terminated the negotiations agreement and insisted on Optimum continuing to provide coal to Eskom,” said Seleka.
Daniels said a series of e-mails showed the commission that the prepayment in the form of cash was approved by board members back in 2015. The draft of the proposal was later sent to businessman Salim Essa, a Gupta associate.
However, the then CFO Anoj Singh allegedly made a U-turn on this and instead offered a “guarantee” for R659m to another Gupta-linked company, Tegeta ... a decision which was not immediately taken back to the board, according to Daniels.
Probed on why Daniels never asked about the involvement of Essa, she argued she did not want trouble.
Seleka suggested there had been an ulterior motive for the latter, based on evidence from the portfolio committee.
“It would have been issued to assist Tegeta to show that it has the money to pay for the purchase price of OCM [Optimum]," Seleka said.
Zondo remarked it was interesting that the conversation was thought of at the level of execution, which Daniels agreed, saying: “Yes, there was very little questioning from the board.”
Daniels, who first appeared before the commission in September, said she had received numerous threats on her life and that of her family.
“Since making my disclosures I have been maligned, attacked as a disgruntled opportunist seeking some form of redemption. The parties who have set out to crucify and paint me as a villain, are part of the crew who in fact are beneficiaries of the proceeds of state capture.
“What I did not realise is how close being a whistle-blower is to a scapegoat,” she told the commission. She said the nature of the death threats forced her move her daughter abroad.
She accused the commission of ill-treating her, too, which it denied.
“We remain committed to do the best we can to be fair to be everybody as we understand fairness,” argued Zondo.
Daniels is expected to return to the commission on a date yet to be determined.
