NEWS

Gupta-Owned Tegeta Could Have To Pay Back The Money

An alleged "corrupt" and "illegal" prepayment of R659 million to Tegeta by Eskom must be repaid as a loan, if Treasury has its way.

21/04/2017 07:51 SAST | Updated 21/04/2017 09:10 SAST
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Jacob Zuma, South Africa's president visits the headquarters of Eskom Holdings SOC Ltd. at Megawatt Park in Johannesburg, South Africa, on Friday, May 6, 2016.

The Gupta-owned company Tegeta could have to pay back the money, after Treasury recommended the R659 million that Eskom paid to the company be converted into a loan.

In her report "State of Capture", former Public Protector Thuli Madonsela flagged the advance payment for a coal tender as possibly being in violation of the Public Finance Management Act.

At a hastily-convened after hours meeting, Eskom approved an advance payment of R659 million to Tegeta, one of the Gupta's coal suppliers, at a time when they desperately needed the money to purchase shares in Optimum Coal Holdings.

Madonsela found that the prepayment was allegedly used to buy OCM from Glencore -- a move that she noted may be corrupt, illegal and a wasteful expenditure.

Madonsela also found that former Eskom CEO Brian Molefe and Ajay Gupta had a close relationship and they called each other many times.

On Friday, Business Day revealed that Treasury, in a draft report into the Gupta's dealings with Eskom, wants the amount to be converted into a loan.

Treasury reportedly says there is no evidence that Tegeta used the money to buy equipment for its mining operations, as it previously stated. Treasury also reportedly wants the payment declared irregular expenditure, and it wants Eskom investigated for failing to prevent irregular, fruitless and wasteful expenditure.

Interest on the "loan" should be determined by an auditing firm chosen by Treasury, the report said.

Parties were reportedly given until Friday to comment on the draft report.

Eskom board spokesperson, Khulani Qoma told Business Day that the report was a draft and could not be seen as final.