POLITICS

Brian Molefe: Ratings Agencies Will Take Note

The reappointment of Molefe as CEO of Eskom will do more than raise eyebrows.

12/05/2017 12:49 SAST | Updated 12/05/2017 12:49 SAST
Waldo Swiegers / Bloomberg via Getty Images
The headquarters of South Africa's state-owned electricity utility, Eskom, at Megawatt Park in Sandton, near Johannesburg, South Africa.

"If I were a rating agency, I would take note of Brian Molefe's reappointment."

This according to economist Mike Schūssler, who agrees with other analysts that the reappointment may bring to light the many the questions around Molefe's alleged R30-million "golden handshake" last year, which was never awarded.

Parties and trade unions called for a reversal of the decision.

Energy expert Chris Yelland said although it is too early for him to comment on Molefe's reappointment, he is waiting for responses from the utility on key questions he previously asked.

Energy expert Chris Yelland said that although it was too early for him to comment on Molefe's reappointment, he is waiting for responses from the utility on key questions that he had asked previously.

Yelland said these questions are important as they investigate whether Molefe was in fact paid the reported R30-million upon his resignation.

"Was this a proposed payment or was it actually paid? If it was paid, will it now be recovered upon Molefe's return? Was this a pension, severance or performance bonus? If it turns out, as currently suggested, that Molefe was paid out, whose account was it paid from?" asked Yelland.

"The Eskom pension fund is an independent organisation from the utility. Did the fund's trustees agree to the payment and did it comply with the fund's rules? If it is a pension payment, what does it have to do with the board? The minister [of public enterprises] is asking for Eskom's board to respond, but unless Eskom itself made the payment, why is the board making decisions of pension?"

"These are the questions we must ask now," Yelland said.

Accountability Now director Paul Hoffman said Molefe's fitness as CEO seems to be a "matter of debate, at the least".

"Molefe's actions last year suggest he was correct to resign, but it's inappropriate for him to be reappointed. His reaction to the State Capture report should be emulated by other government officials," Hoffman said.

Schussler said that if he were a ratings agency, he would take note of Molefe's sudden return to Eskom.

"It may not be the biggest issue, but our public enterprises are not operating properly because of decisions like the chopping and changing of managers and issues of non-transparency. We need to ask ourselves how transparent this process is. We have a right, and Eskom has a responsibility to keep us informed," Schussler said.

"These are the sorts of things that will have investors keeping a close eye on the country."

The Democratic Alliances's Shadow Minister for Energy, Gordon Mackay, said the reappointment of Molefe, who was pro-nuclear, is "deeply concerning" for the future of renewables.

"We see this as a co-ordinated response with President Jacob Zuma's capture of Treasury to place Molefe back at Eskom to push through the nuclear deal," Mackay said.

The ANC were surprisingly quick to condemn Molefe's reappointment, saying they will ask Department of Public Enterprise Minister Lynne Brown about the decision.

The South African Federation of Trade Unions demanded Molefe's reinstatement be reversed, the entire Eskom board be dismissed and that a new "democratically accountable" board be appointed with representatives from Eskom workers and communities.

"It is outrageous that someone who is facing serious allegations in the report of the former public protector can continue to head this vital national enterprise. The excuse that the Eskom board has given ... is utterly preposterous," the union said.

The DA's Shadow Minister for Public Enterprises Natasha Mazzone said Molefe's return to Eskom is a "monumental disaster" for the power utility, which is in a dire state of affairs and surrounded by a "swirling cloud of Gupta-linked corruption allegations" as a result of Molefe's tenure.

She said the DA will write to Chair of Chairs Cedric Frolick to ask that the Public Enterprises committee launch a full-scale parliamentary inquiry into Eskom.

"The return of Molefe to Eskom will see the Gupta hand return to the power utility, and most likely to the forthcoming nuclear procurement deal. This is something which South Africa cannot accept," Mazzone said.

"It was clear in the public protector's damning State of Capture report that Molefe was seriously compromised in his position at Eskom. He, himself, on leaving Eskom, cited the interests of corporate good governance as requiring him to leave."