Parliament, Tuesday, 7 November 2017 – The Portfolio Committee on Public Enterprises continued its inquiry on Eskom into the mismanagement of state funds in state-owned enterprises.
Two witnesses appeared before the Committee, former Eskom CEO Mr Tshediso Matona and Eskom's former Group Executive: Enterprise Development, Ms Erica Johnson.
Briefing the Committee, Mr Matona said that by the time he arrived at Eskom in October 2014 there was significant turmoil within the board and there was fighting over a range of governance issues. The most pertinent matter was around procurement, there was an issue of R43m deal that was signed over to the New Age newspaper.
He indicated that the issues at Eskom rendered the board dysfunctional in many ways. That could be one of the reasons that shareholders decided to change the board in December 2014.
When questioned around his suspension, Mr Matona said the suspension came as a complete shock, “by a board that had just taken office and a board that was still familiarising itself with issues of the company”.
“When a pretext of an investigation into the state affairs of the company, I believe the problems of the company had been well established the financial and operational issues we were in fact working in solving the problems.”
He said: “I expressed my disagreement of a new investigation, an investigation of my removal without any basis of why I had to be removed. At the time I did not know that the same was being proposed for other executives, I was handed a letter of suspension. I believe the action was wrong and I went to the Labour Court and sought urgent relief to indicate that my suspension was unfair and that I should be reinstated.”
He informed the Committee that the matter did not go far but the case was referred to the CCMA (Commission for Conciliation, Mediations and Arbitration). “When the case went to the CCMA I found that Eskom had excluded any possibility of my return to the company in the outcome of the arbitration. I was made an offer to leave the company. I could have fought further but I realised I would have bankrupted myself. I chose to walk away and leave the sorry and sordid episode of my life,” said Mr Matona.
Responding to questions around governance at Eskom, Mr Matona said the challenge of governance and what confronted Eskom was financial performance of the company. “The books were not balancing and there were a number of factors, revenue was under pressure and this was as a result of the economic slowdown at the time. The economic slowdown was becoming apparent at that time. The issue of tariff – as to whether it was sufficient to sustain the balance sheet, the issue of debt with municipalities which was escalating. The long and short of it is that Eskom was in serious financial trouble,” he said.
“The other challenge Eskom dealt with was the supply of electricity without interruptions. Incidents of load shedding started to occur in 2014. As soon as I arrived there, load shedding intensified," he said.
When Ms Johnson presented her evidence and was questioned in her statement, she indicated that she was involved in the New Age deal. She informed the Committee that the rationale given at the time for the deal which the company would pay R1.2m per breakfast event, was to engage with key decision makers and opinion shapers in order to provide an opportunity to engage, promote and discuss the challenges at Eskom at that time. She said if a series of breakfasts with key decision makers and opinion shapers could achieve that, it was considered well worth the investment.
She said the New Age deal was a direct request from the former Acting CEO, Mr Collin Matjila. She said while there was no need for the contract as the company was in financial difficulty, Ms Johnson said she was further requested to change the New Age contract from a year to three years without an exit clause.
Members of the Committee reiterated that a time will come for all individuals whose names are mentioned during the inquiry, to be given a chance to appear before the Committee and explain their side on the issues that came out during the inquiry.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON PUBLIC ENTERPRISES, MS LUNGI MNGANGA-GCABASHE
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