The Time Has Come For Ramaphosa To Account For His Unlawful Decisions At Eskom
PRESIDENT Cyril Ramaphosa will appear at the State Capture Commission on Wednesday and Thursday this week. He will complete his evidence relating to the ANC in his capacity as the current president and former deputy president of the party.
Thereafter he will give evidence and be questioned in his capacity as the president and former deputy president of the country.
Part of the commission’s terms of reference is to investigate and report on whether and to what extent members of the national executive and directors of the boards of state-owned enterprises (SOEs) were improperly influenced in their decision-making. I provided my affidavit to the commission to show that in unlawfully directing Eskom’s board of directors to dismiss me in January 2018, the president, Mr Ramaphosa, not only unlawfully exerted pressure on the board regarding its decision-making, but also acted at the instance of third parties, who had “captured” him.
Mr Ramaphosa responded to my affidavit in an affidavit that he provided to the commission. I am satisfied that, from what Mr Ramaphosa has stated in his affidavit, he has conceded that he acted based on the wishes of third parties in instructing the board of Eskom to dismiss me. By doing so, he unlawfully and irregularly exerted pressure on Eskom’s board to do his and the third parties’ bidding in disregard of my rights as a citizen and as an employee of Eskom.
It was for this reason that Eskom was interdicted by the Labour Court of South Africa from terminating my contract of employment in an unlawful breach of the terms and conditions of my employment contract and or based on a directive issued to it by the Government of the Republic of South Africa in terms of the statement that Mr Ramaphosa put out on Sunday, January 21, 2018, to the effect that: “The board is directed to immediately remove all Eskom executives who are facing allegations of serious corruption and other acts of impropriety, including Matshela Koko…”
What I was faced with at the time was accurately and correctly expressed by my then-attorney, Mr Asger Gani, in a letter that he wrote to Eskom’s acting group chief executive on January 23, 2018. Mr Gani, after fully canvassing the facts, stated that:
“It is unlawful and indeed shocking that the government, the shareholder of Eskom, has publicly recorded that it had issued instructions for employees of Eskom to be dismissed on the basis of allegations alone, with particular reference, moreover, to Mr Koko who, after due process was followed, was exonerated and found not guilty.
“Such instructions to Eskom are in direct conflict with the rule of law that applies in our country and is an unlawful attack on Mr Koko’s rights, including his constitutional right to fair labour practices as protected also by the Labour Relations Act. It is beyond our comprehension that the government of our country can act in this manner so publicly”.
Insofar as Mr Ramaphosa relies on an alleged right of the national executive to interfere in the affairs of the state-owned enterprises, it is deplorable. That is exactly what is at the heart of state capture – government hiring and firing executives of SOEs at whim to achieve hidden purposes and in that manner undermining the capacity of the SOEs to do what they are supposed to do.
It is something that should not be lightly accepted by the commission when the president appears before it on Wednesday and Thursday. This kind of anomalous executive interference has severely damaged the SOEs and compromised their performance. The history of Eskom since 2018 is a good example, but it is not the only one, before or since then.
SOEs such as Eskom exist to serve particular, defined purposes. The members of the boards of directors and senior management of SOEs are supposed to strive towards directing the SOE towards its purpose in accordance with sound principles and rules of governance. The above can not be achieved if they are reduced to the handmaidens of the government, lenders and/or the governing political party, to be hired and fired at whim.
Mr Ramaphosa would want South Africans to believe that Eskom was in crisis and dire straits at the time and that he had to act expeditiously. Failure to act would have “triggered loan recalls”. The loans were subject to government guarantees.
The facts and figures speak strongly to the contrary. I dealt with these facts when I appeared before the commission on December 3, 2020. The facts are that in the Molefe/Koko era, Eskom’s operational improvement was the best since 2001. Eskom itself at the “System Status and Outlook Briefing” presentation to the public that Eskom gave on March 15, 2021, and Nersa in its Multi Year Price Determination Report for the period 2019 to 2022, at page 53 have acknowledged Eskom’s improved performance under our leadership.
Relevant is also that Mr Ramaphosa was chairman of the board of directors of OCH from March 26, 2012, until February 2014. He held a 9.64% shareholding (via the Lexshell company) in Optimum Coal Holding (OCH) and through OCH in its subsidiaries, including Optimum Coal Mine. OCH had provided a parent company guarantee to Eskom to step in if OCM was not able to perform its obligations in terms of the Coal Supply Agreement.
This was the reason for OCH being put in business rescue with OCM in 2015. Mr Ephron, the CEO of OCH and OCM at the time, has stated that Mr Ramaphosa divested his entire interest in OCH on May 22, 2014. At that stage, the Eskom penalties claims against OCM amounted to R1.4 billion.
Also relevant is that Mr Ramaphosa may well have suffered a substantial financial loss arising from the fraught relationship that arose between Optimum and Eskom after Glencore’s takeover in 2012. I refer in this regard to an article that appeared in the Mail & Guardian newspaper titled “The winners and losers in the Guptas’ Optimum Coal deal” on April 28, 2016, that referred to that as fact.
Mr Ramaphosa had had an association with Glencore and its public representatives for several years. He refers to it in his statement to the commission as a long-standing relationship that started in 2005. Mr Molefe and I had thwarted Glencore’s scheme to squeeze a massive price increase for Optimum’s coal from Eskom. He was and is not well disposed towards us.
Also, it is telling that once Mr Molefe and I had left Eskom, Eskom again accorded Glencore preferential treatment. Eskom in 2018 concluded coal supply agreements to the value of R38.24bn. Approximately 17% (R6.6bn) of the supply went to mining operations in the Glencore group. The prices agreed with Glencore’s mines were at prices up to more than double the prices agreed with other suppliers of similar coal.
Mr Ramaphosa was appointed as a director of Optimum Coal Holdings on August 17, 2011, and he remained an active director until February 4, 2014. Optimum Coal Holdings had provided a parent company guarantee to Eskom to step in if OCM was not able to perform its obligations in terms of the coal supply agreement. Mr Ramaphosa divested his 9.64% interest in Optimum Coal Holdings on May 22, 2014. At that stage, the Eskom penalties claims against OCM amounted to R1.4bn.
Optimum Coal Holdings refused to pay Eskom the money. Mr Ramaphosa and his associates at Glencore were obviously aggrieved that I demanded the money from Optimum Coal Holdings. In January 2018, Mr Ramaphosa issued an unlawful instruction to the Eskom Board to dismiss me. My proposition is that Mr Ramaphosa was not well disposed towards to me because I forced Glencore’s Optimum Coal Holdings to pay back the money which they failed to do as required by the coal supply agreement. Instead, they opted to sell Optimum to Tegeta.
The time has come for Mr Ramaphosa to account for his unlawful decisions at Eskom. I look forward to Wednesday and Thursday, 11 and 12 August, 2021, when Mr Ramaphosa appears to present his version to the commission.
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