Eskom on Wednesday announced it had successfully recovered the R30m it unlawfully paid to the Eskom Pension and Provident Fund for the benefit of former CEO Brian Molefe.
The fund confirmed repaying the money but said it had been unable to get a portion (about R10m) that it had paid to Molefe.
This was because Molefe had applied for leave to appeal against the judgment passed by the Pretoria high court, which set out amounts that must be repaid by the fund and Molefe.
In January 2018, the full bench of the Pretoria high court declared that any “payment or sum of money” received by Molefe under “any purported pension agreement” between him and Eskom was invalid. It ordered Molefe to repay “such amounts” within 10 days from the date of that order.
When Molefe resigned as Eskom CEO in November 2016, he was employed on a fixed-term contract and therefore disqualified from participating in the Eskom pension fund.
Upon leaving Eskom, Molefe elected to receive one-third of his pension benefits as a lump sum. These benefits were created as a result of a payment of some R30.1m made by Eskom to the Eskom pension fund.
Molefe failed in his bid to appeal against the 2018 judgment, first in the Supreme Court of Appeal and the appeal to the Constitutional Court was dismissed in July 2019.
Despite these failed appeals, Molefe did not repay to the pension fund the amounts he received from the fund. This prompted the fund to approach the high court for relief.
Molefe contended the net amount that he has to repay is R1,490,920.88.
Before the Pretoria high court passed judgment in July this year, even this amount had not been paid.
The court, in its July judgment, ordered that Molefe pay R7,981,727.94.
The amount comprises the R7,796,566.84 pension payout, plus R63,377.94 (a 3% enhancement on his pension from the fund including interest), R26,291.71 (performance bonus pension contributions of R113,019 paid by Eskom to the fund) and R95,491.45 (monthly pension payments paid by the fund).
The court said in addition to the R7.981,727.94, the fund was entitled to recover from Molefe the tax amounts paid on his behalf and not the SA Revenue Service. This was an additional R2.003,812.70.
Though the court had ordered Molefe to repay the amounts of R7,981,727.94 and R 2,003,812.70, it ruled that the fund was entitled to offset the amount due by Molefe, against the net balance of the Transnet Retirement Fund lump sum received on his behalf.
The appeal process means that the fund must await the court’s final decision before it can seek to recover the money. The fund is opposing Mr Molefe’s application to ensure that he adheres to the July court order.
— The Eskom fund
In January 2018, the full bench of the Pretoria high court declared that any payment or sum of money” received by Molefe under “any purported pension agreement” between him and Eskom was invalid.
It also ordered Molefe to repay “such amounts” within 10 days from the date of that order.
When Molefe resigned as Eskom CEO in November 2016, he was employed on a fixed-term contract and therefore disqualified from participating in the Eskom pension fund.
When Molefe left Eskom, he elected to receive one-third of his pension benefits as a lump sum. These benefits were created as a result of a payment of some R30.1m made by Eskom to the Eskom pension fund.
Molefe failed in his bid to appeal against the 2018 judgment, first in the Supreme Court of Appeal and then the Constitutional Court in July 2019.
The court said in addition to the R7,981,727.94, the fund was entitled to recover from Molefe the tax amounts paid on his behalf and not the SA Revenue Service. This was an additional R2,003,812.70.
Though the court had ordered Molefe to repay the fund the amounts of R7.981,727.94 and R2,003,812.70, it ruled that the fund was entitled to offset the amount due by Molefe, against the net balance of the Transnet Retirement Fund lump sum received on his behalf.
When Molefe left Transnet — on the incorrect assumption that he was eligible to be a member of the Eskom fund — he transferred the lump sum he received from the Transnet Retirement Fund to the Eskom fund, which thereafter held and invested it on his behalf.
When Molefe left Eskom, he took R1.6m of his Transnet retirement portion and left R4.169.893.12 with the Eskom fund.
The court also ordered that Eskom pay Molefe the post-tax values of the R1.345,461,79 (Eskom’s employer contributions on behalf of Molefe) and R727,547.64, (the total of Molefe’s own monthly pension contributions) with interest from October 31 2019 to the date of repayment.
The Eskom fund said on Wednesday it has repaid the R30m plus interest in relation to Molefe’s pension matter.
The fund said Molefe had not yet made the repayment of the R10m as ordered by the court as he had sought leave to appeal against the high court decision.
“The appeal process means that the fund must await the court’s final decision before it can seek to recover the money.
“The fund is opposing Mr Molefe’s application to ensure he adheres to the July court order,” the fund said in a statement.
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