JOHANNESBURG – President Cyril Ramaphosa recommended to former president Jacob Zuma that Brian Molefe be appointed as chief executive officer at Eskom, he told the Judicial Commission of Inquiry into State Capture on Wednesday.
Ramaphosa’s evidence before the commission dealt with his role as deputy president under Zuma. Molefe was appointed as CEO of Eskom in 2015, after he had served as CEO of Transnet.
Molefe has been accused of having close ties to the Gupta family, and during his time at both companies, contracts were awarded to entities linked to the Guptas and their associates. At Transnet alone, an estimated R40 billion in payments related to state capture were made during Molefe’s term.
Ramaphosa said he had “no clue” about Molefe’s Gupta connections when he recommended his appointment at Eskom, and that it was a coincidence.
He regarded Molefe as an effective CEO, and was “surprised” when Molefe’s Gupta connections emerged. He said he was “concerned” that “someone [he] held in high regard was entangled with the capture of the state”.
Some witnesses at the Zondo Commission previously testified that the four executives were axed to make way for Molefe and chief financial officer Anoj Singh, who reportedly channelled massive contracts to Gupta-associated companies at Eskom, after doing the same at Transnet.
Ramaphosa said despite his position in the Eskom war room, he was kept out of the loop about the suspensions.
Molefe resigned just months later, after then-public protector Thuli Madonsela’s “State of Capture” report revealed that he had been in repeated contact with the Guptas.
Optimum
Previously, Molefe and another former Eskom CEO, Matshela Koko, accused Ramaphosa of seeking out his own interests.
In his testimony at Zondo, Molefe made sweeping allegations regarding Ramaphosa’s association with Glencore’s Optimum Coal Mine, which the president once chaired.
Glencore supplied Eskom with coal through its Optimum Coal Mine. Glencore ended up in a bitter dispute with Eskom over the amendment of the terms of its contract, as well as penalties imposed on it by the power utility.
Koko testified before the commission that Glencore tried to use a distress clause and business rescue process to drive up the price of coal it was selling to the power utility.
Responding to Molefe and Koko’s claims that he sought to meddle in Eskom’s affairs to make the most out of his stake in Optimum Coal, Ramaphosa said he disposed of his holdings in the Optimum Holdings before assuming the position of deputy president.
“While I was in business, I participated in a commercial consortium with Glencore to acquire Optimum in June 2012. I acquired a shareholding in Optimum Holdings and became a non-executive shareholding. In that position I had no operational involvement in Optimum Holdings,” he said.
Ramaphosa also said he took exception to Koko’s allegation that he improperly interfered to “procure his dismissal” from Eskom in January 2018.
“As I detail in my statement to the commission, Eskom was in a severe crisis at the time. Its domestic and international lenders were threatening to call on their loans, in part because of concerns about Eskom’s leadership and its reaction to allegations of corruption.
“Eskom’s predicament threatened its very existence as a going concern. It also threatened the country’s sovereign rating and the country’s ability to access much-needed lines of credit,” he said.
He said his acquisition of shares in Optimum Holdings was a straightforward transaction done in accordance with the rules of the Johannesburg Stock Exchange.
“I was not involved in operational matters, subsidiary companies, particularly their contractual matters with Eskom,” Ramaphosa said.
He denied agitating for Koko’s removal from Eskom and said Koko’s removal in itself is not an indication of an intention to allow state capture in Eskom.
