NEWS

The Rise And Fall And Rise Again Of Brian Molefe

He should have been one of the best examples of black excellence in his field. His dealings with the Guptas mean otherwise.

20/02/2017 13:43 SAST | Updated 20/02/2017 18:23 SAST

ANALYSIS

The rise

Get used to Brian Molefe's name -- you may be hearing it a lot more often.

Parliament on Friday confirmed that the disgraced former Eskom CEO was nominated to fill a vacancy on the ANC's North West list, and will be sworn in as a Member of Parliament -- despite reports over the weekend that Molefe is not in fact a member of the specified branch in the province.

Indeed, Molefe's comeback as an MP was not only seemingly pushed through at branch level, but announced with much fanfare. New MPs rarely warrant their own press release as Molefe's did.

This has fed into widespread speculation that he will either replace current Finance Minister Pravin Gordhan, or be installed as his deputy to stymie him. Treasury under Gordhan and his predecessor Nhlanhla Nene have frustrated President Jacob Zuma's plans around big projects like nuclear, and are thought by their supporters to be the last bulwark against wide-scale looting.

But who is Molefe and should we really be worried if he lands the top job at the finance ministry -- or near the top?

He'd have the experience for sure. In the early years of his career Molefe worked at treasury for eight years. He began as a director in 1997 and left as a deputy director general for asset liability management in 2003.

It was part of an illustrious period in his career and Molefe has long been considered a rising star, earning plaudits as a civil servant of note.

When he was appointed as the group chief executive of Eskom on October 1, 2015, the announcement was accompanied by a glowing summary of his career, starting with his previous tenure as chief executive at Transnet, where he had achieved something of a reputation already as a Mr Fix-it. The release read:

"At Transnet, he spearheaded the company's groundbreaking Market Demand Strategy, a rolling seven-year R336 billion infrastructure investment programme."

Molefe's work at Transnet earned him an honorary degree of Doctor of Engineering (DEng) from Glasgow Caledonian University (GCU), in Glasgow, Scotland. Before his four years at Transnet, he was CEO for seven years at the Public Investment Corporation (PIC).

At the PIC, he led an unmatched growth in assets under management from R308 billion to just under R1 trillion between 2003 and 2010.

Successes and awards are dot his CV. He was chosen as Chief Executive Officer of the Decade by the Association of Black Securities and Investment Professionals (Absip), was named Africa's "Business Leader of the Year" by Africa Investor in Japan in 2014, and became Infrastructure Investment Champion of the year in 2016, while CNBC Africa honoured Molefe with the Business Success in Africa award.

Graphics24/Fin24

The fall

So what went wrong?

At first, Molefe seemed to live up to his reputation at Eskom, earning praise from his supporters for keeping the lights on and putting an ending to load-shedding.

Business Day's deputy editor Carol Paton has previously noted that Molefe's "achievements were much exaggerated by himself and his colleagues".

She added:

He was helped by a surprise fall in demand for electricity from industry, mining, agriculture and transport — all at lower levels than 2007. Had demand risen in line with projections, load shedding — or the use of diesel to keep the lights on — would not have ended.

But bringing an end to load shedding is where Molefe's success ended. In many other respects, Eskom remains a company with serious challenges and its future has become increasingly laden with risk.

There is the problem of growing debt, yet Eskom under Molefe, and after him, is determined to go ahead with its nuclear project, which is projected to cost more than a trillion rand.

But Molefe may have been able to live that down given his strong track record.

In the end, his fall -- in the public's eyes -- came at the hand of one of the most notorious business families in South Africa, the Guptas.

The brothers, originally from Uttar Pradesh in India, allegedly amassed massive fortunes in South Africa thanks to their connections with government officials, particularly Zuma.

Money for nothing and your coal for free

Accusations around the family improperly benefitting from these connections came to a head with previous public protector Thuli Madonsela's "State of Capture" report released on November 2, 2016. It revealed some creative payment structures at work: Eskom paid almost R1 billion in prepayments to the Gupta's Tegeta Resources & Energy for a coal tender to supply Arnot Power Station. This money was then allegedly used to buy Optimum Coal Mine (OCM) from Glencore, and may be corrupt, illegal and amount to fruitless and wasteful expenditure.

If that wasn't damning enough, the report further laid out evidence that Molefe may have been "captured" by the family, a mark he may never shake. Cellphone records showed Molefe and Ajay Gupta made 58 telephone calls to each other between August 2015 and March 2016, and Molefe visited the Guptas' neighbourhood, Saxonwold, about 19 times between August 5 and November 17, 2015. As some on Twitter noted, it was more contact than many had with their own parents.

Molefe disputed Madonsela's findings but his reputation as civil servant wunderkind had been irrevocably damaged.

An image of a distraught and clearly stressed Molefe wiping tears from his face at an Eskom briefing, shortly after the report, is seared onto South Africans' minds.

And even more so, are his ludicrous attempts at explaining away the evidence.

"My cellphone reflects that I was in Saxonwold 14 times, close to the head of proverbial goats. My cellphone reflects I was in the area," said Molefe.

"There's a shebeen there, two streets away from the Gupta[s]. I will not admit or deny that I've gone to the shebeen.

"But there is a shebeen there," he told reporters.

#SaxonWoldShebeen was the perfect fodder for viral memes. Molefe resigned as Eskom CEO shortly after.

Molefe was lauded for stepping down, but those who take the Gupta family and Zuma seriously should have known that something was plotting in the background.

A complicated rise again

Now it seems Molefe is again headed for an important role in the public sector -- perhaps one of the most important.

Zuma has been vocal about his frustrations with treasury but his previous attempts to install a pliant political head, the unknown Des Van Rooyen, was met with a massive uproar from markets and civil society. He would have more luck with Molefe given his background.

If this is the case, it is an indictment on Molefe. A clearly brilliant man, he was destined for great things. Even if he is our next finance minister, his dealings with the Guptas has marred what should have been, as ANC Youth League leader Collen Maine tried to paint him, "an example of black excellence" in his field.

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