The Zondo Commission has found that President Jacob Zuma, MP Lynne Brown and Eskom’s Matshela Koko actively assisted in the Guptas’ elaborate scheme to capture Eskom.
Volumes III and IV of the latest section (Part 4) of the Zondo Commission’s report into state capture, released on Friday, deals with the capture of Eskom – an extensive operation. This article covers Volume III, which deals with getting rid of executives who asked too many questions, as well as the appointment of a new Gupta-approved board in 2014.
14.08 [Electronic] State Capture Commission Report Part IV Vol I
14.09 [Electronic] State Capture Commission Report Part IV Vol II
14.10 [Electronic] State Capture Commission Report Part IV Vol III
14.11 [Electronic] State Capture Commission Report Part IV Vol IV
The Guptas claimed that Zuma would do as they said. This was supported by testimonies from Themba Maseko, former CEO of the Government Communications and Information Systems (GCIS), and Mcebisi Jonas, former member of the national assembly.
It was also apparent that Zuma removed everyone who did not cooperate with the Guptas, for example, the dismissal of Nhlanhla Nene, the former minister of finance, and the removal of Tshediso Malone, the Eskom group CEO, “at the instance of the Guptas”.
‘Zuma facilitated audacious looting, wanton mismanagement at Eskom’
The looting of Eskom, Transnet and SAA by the Gupta media enterprise
Lynne Brown was working with the Guptas
The commission found that Brown, appointed as the minister of public enterprises (MPE) in May 2015, was working with the Guptas. Evidence shows that several cellphone calls took place between her and Gupta-linked Salim Essa.
Former Eskom board spokesperson Khulani Qoma submitted an affidavit stating that Zethembe Wilfred Khoza, an Eskom board member from December 2014 until January 2018, had told him that “Brown was captured and that she took instructions from the “G-brothers””.
Brown was sent a list of recommended Eskom board appointments by Orateng Motsoai, then the chief director of legal and governance at the Department of Public Enterprises (DPE). Brown appointed all the names on the list.
Deputy Director-General for Energy at the Department of Public Enterprises Simphiwe Makhathini expressed concerns about the skills of the proposed board. Seven appointees were not on the database of the DPE for suitable persons to be considered for SOE boards. Brown did not consider the DPE database.
The commission’s evidence shows that she was part of a scheme to capture Eskom.
Relationships between Eskom board members and the Guptas
- The State Capture report compiled by Thuli Madonsela, then Public Protector, stated that the board of Eskom appointed in December 2014 consisted predominately of individuals with direct or indirect business or personal relations with Zuma, the Gupta family and their related associates, including Essa.
- Zola Tsotsi was chairperson of the Eskom board from 2011 to 2014, and was re-appointed as chairperson of the 2014 board. He was summoned to the Gupta residences in Saxonwold and Cape Town on three occasions. Tsotsi gave evidence that Brown was colluding with the Guptas and Essa in the appointment of the board committees. Brown denied this. The commission has obtained cellphone records that confirm that there were discussions between Essa and Tsotsi in November/December 2014 and between Essa and Brown from November 2014 to March 2015.
- Dr Baldwin Sipho “Ben” Ngubane, a board member from December 2014 until June 2017, had a link with Essa.
- Zethembe Wilfred Khoza, a board member from December 2014 until January 2018, communicated six times with Essa and twice with Tony Gupta. Khoza denied receiving or making any calls to Essa or Tony Gupta.
- Chwayita Mabude was a board member from June 2011 until June 2017. The Shadow World Investigations report identified Mabude as the owner of Innova Management Solutions (Innova), an entity that appeared to have been managed by Essa and Ashok Narayan,
and “monies received from the Free State Department of Agriculture were laundered onto Innova, which then laundered the monies through to Aerohaven and Gateway Limited, both Gupta entities”.
- Nazia Carrim, a board member from December 2014 until July 2016, said that her husband is related to Salim Essa.
- Venete Jarlene Klein, was a board member from December 2014 until 2017. The commission found that a payment of R150 000 had been paid by Saamed Bullion, a Gupta money laundering vehicle for funds derived from corruption, to Centuria 400, an entity owned by Klein.
- Devapushpum Viroshini Naidoo was a board member from December 2014 until 2017, and is the spouse of Kuben Moodley, a known Gupta associate and former advisor to Minister Zwane.
- Mark Vivian Pamensky, a board member from December 2014 until November 2016, is a close associate of Essa, shared a common directorship with him in Yellow Star Trading 1099, and communicated many times with the Guptas. He had expressed his support to Atul Gupta in 2016 “in the face of articles about the family and offering a strategy in this regard”.
- Giovanni Michele Leonardi, a Swiss national, was appointed to the board in May 2015, and resigned in January 2018. The commission said there is no evidence that Giovanni was subjected to a shortlisting, screening and vetting process. The *Fundudzi report had concluded that Kim Davids, the personal assistant to Brown, and [email protected] (identified as Essa’s email) “worked closely together to facilitate the appointment of Giovanni to the Eskom board”.
- Mariam Cassim was appointed to the board in 25 May 2015, and resigned in 2017. She had been in telephonic communication with the Guptas many times. The commission found that there is a strong correlation between Cassim’s contact with the Guptas and the timing of transactions that were initiated to benefit the Guptas.
- Norman Baloyi was on the Eskom board from December 2014 until April 2015, when he was removed by Brown. Baloyi expressed opposition to the suspensions of the four executives (see below) in the board meeting on March 11, 2015, and was removed from the board “in very unusual circumstances”.
Suspension of the four executives
Dudu Myeni and consultant Nick Linnell had been involved in the various Eskom board meetings in early 2015, which led to the suspension of the four executives. Zuma had informed Myeni “about the need to have an inquiry into the affairs of Eskom and the need for the suspension of certain executives at Eskom”.
Linnell told the commission that he provided coordinating services, but was “vague as to the services he actually provided”.
Dudu Myeni the recalcitrant witness
How did an outsider get to call the shots on Eskom?
In March 2015, the Eskom board suspended Tshediso Matona, the group CEO Tsholofelo Molefe, the financial director, Dan Marokane, group executive: group capital.
“The suspension of these executives was a crucial step to pave the way for the capture of Eskom by the Guptas. The evidence uncovered by the commission revealed that the Guptas and their associates and President Zuma were behind the suspension.”
Koko, Eskom’s former group executive: technology and commercial, “who was not someone who would not cooperate with the Guptas”, was the fourth director suspended. He had been told that he would be suspended “and he pretended as if the suspension took him by surprise”. Koko was reinstated at a later date.
The commission said it has evidence that conclusively reveals that Koko “was working with the Guptas or their associates to facilitate the capture of Eskom.
This finding is fundamental to the story of the capture of Eskom by the Guptas with the active assistance of a number of people” including Koko, Zuma, Brown and others.
The board paid the three executives millions of rands to secure their resignation from Eskom. But the board wanted Koko back “in accordance with the instructions of the Guptas and their associates”.
The commission came to the conclusion that the board did not want the three executives back, because they wanted to be sure that the Gupta associates, Brian Molefe and Anoj Singh, could be appointed to strategic positions so they could advance the business interests of the Guptas.
“That is the long and short of it. Indeed, the Guptas succeeded in this in due course and Eskom was captured.”
*Fundudzi Forensic Services was appointed to conduct investigations into allegations at Transnet and Eskom.