The South African Federation of Trade Unions has summoned President Cyril Ramaphosa to appear before the state capture inquiry following the allegations labelled against him by Brian Molefe.
The former Eskom CEO focused on Ramaphosa’s position as chair at Glencore-owned Optimum Coal Holdings. Optimum’s attempt to renegotiate its coal supply agreement with Eskom was scuppered by Molefe after he was appointed Eskom CEO in April 2015, pushing it into business rescue, which paved the way for the mine being bought out by Gupta-owned Tegeta Exploration.
Former Eskom company secretary Suzanne Daniels has previously told the commission how the Eskom board agreed to prepay Optimum Coal R1,68-billion to prevent load shedding, but the deal was structured to benefit the Guptas’ acquisition of the mine.
Molefe, who admitted to scuppering the Optimum negotiations when he became Eskom CEO, said Glencore bought Optimum (in 2011) without doing due diligence on the company or on the historic coal supply agreement.
“Instead, they did something extraordinary. They (Glencore) sold 9.64% of shares in the newly acquired company to Ramaphosa and made him chairman.
“They knew profitability could only come from successful renegotiation of the coal price and ignoring by Eskom of penalties accumulating at the time (sic). Ramaphosa was their bet.”
Molefe said Optimum’s profitability “was therefore dependent on the peddling of political influence and the extent to which Glencore would be able to exert pressure on Eskom directors and management and not on the fundamentals of the company they acquired”.
This, he said, was “the source of Glencore’s problems” and they were expecting Eskom to “effectively pay for the irresponsible manner in which they tied themselves into the proverbial knot”.
He said the renegotiated contract would have cost Eskom an extra R6-billion from 2015 until the end of the historic contract in 2018, and were asking Eskom to further write off R2-billion in penalties accrued against their supply contract.
“I found the behaviour of Glencore and Ramaphosa to be revolting,” said Molefe.
“Mr Ramaphosa must have known what Glencore sought to achieve. He was still chair of Optimum when the contract was renegotiated in 2014. He knew he was being used for his political clout.”
Molefe then alluded to a white monopoly capital agenda by saying there was “no way” he would tell Soweto residents to pay their Eskom debts while an international corporation was leading Eskom into financial ruin. Nor would he tell Eskom employees their bonuses would not be paid or freeze their wage increases and so retain the “apartheid wage gap while rich international corporations were unduly exploiting Eskom”.
He went on to rage against the war room established by former president Jacob Zuma in the wake of load shedding, led by then deputy president Ramaphosa, saying they spent Wednesdays and Thursdays preparing reports for the war room’s weekly Friday meetings, leaving only Mondays and Tuesdays to do the work required to prevent load shedding.
The war room, he said, was a de facto board outside of the state utility, yet Eskom board members were not shown the reports prepared for it, and Ramaphosa, who was chair of this “de facto board” had started playing this role directly after being chair at Optimum and while the sale of his shares in the company were still under consideration by the Competition Commission.
“He was engaged in saying we must renegotiate effectively R8-billion, … moves (to deputy president) and becomes de facto chair of Eskom (sic).”
In his statement Molefe went on to disparage Ramaphosa’s appointment of Pravin Gordhan as Minister of Public Enterprises, calling him “smooth-talking and dictatorial” yet presiding over public entities that are failing and on track to be sold to private enterprise.
He claimed that with the “expertise of people like (former Eskom executive Matshela) Koko and others”, load shedding was “defeated in August 2015”, only to return three years later under Ramaphosa’s presidency.
“Yet we are here talking about this meeting or that meeting with a company that did not supply very much (coal to Eskom).”
After Molefe’s statement, which was admitted to the record, Seleka put forward previous testimony placed before the commission which implicated Molefe in the capture of Eskom by the Gupta enterprises. Molefe’s responses were often long-winded and seemed designed to distract from the import of the question. At times his answers bordered on contempt.
Responding to Seleka’s reference to testimony by former managing director of international rail company Hatch that Gupta associate Salim Essa had predicted Molefe would be appointed Eskom CEO, with the question: “How is it he (Essa) knew you and you say you didn’t know him? Molefe replied:
“Yes, chairperson. I was sitting at RocoMamas. You know RocoMamas chairperson? It’s happening there. It’s not a shebeen but, eh, it’s a restaurant that sells very nice hamburgers. And not far from my table there were two Indian ladies. I think they’re sisters from the way that they looked, but I could overhear their conversation, and one of them kept saying that Mr Zondo is going to be the next Chief Justice. I just think it would be unfair to ask you to comment on that.”
Although Justice Zondo laughed off Molefe’s response, on more than one occasion he told Molefe he could answer that he was not party to the conversation mentioned in testimony and thus could not comment on it, or could provide insight into why such conversations might have occurred.
Molefe was supposed to continue on the stand following the lunch break, but Justice Zondo returned from lunch and stated he had been told someone he had been in contact with had tested positive for Covid-19, and thus he would have to adjourn and self-isolate.
He announced former president Jacob Zuma had communicated he would not be appearing before the commission next week, and if possible, arrangements would be made for Molefe to appear before the commission at some point next week.
“Sorry we can’t continue, it is one of those things one has no control over,” said Justice Zondo.
He said two evening sessions that were scheduled would be cancelled and “we’ll talk early next week, maybe Tuesday and see how things look”. DM
Saftu also wants the directors of Glencore-Optimum to appear before the commission.
Main Image: The South African
