NEWS

Investors Concerned Over Corruption Allegations At Eskom

Eskom's results announcement was postponed this week, allegedly because lenders and investors had concerns.

13/07/2017 06:35 SAST | Updated 13/07/2017 06:35 SAST
Siphiwe Sibeko / Reuters
An Eskom logo is seen at the entrance of their head offices in Sunninghill, Sandton, February 24, 2016. South Africa's energy regulator Nersa said on Wednesday it had postponed a decision on tariffs charged by state-run power utility Eskom to March 1 from Feb 25 as it seeks further clarity on diesel costs. REUTERS/Siphiwe Sibeko

Concerned investors and lenders reportedly met with Eskom this week over allegations of corruption at the power utility, and this has emerged as one of the key reasons why Eskom cancelled its results event this week, Business Day reported on Thursday.

This week, reports emerged that Matshela Koko, Eskom's former chief executive, will face disciplinary measures over reports that his stepdaughter's company received work from the power utility.

:ocal and international investors who met with Eskom on Monday and Tuesday, expressing their concern about what had been going on at the power utility.

Eskom met some of its bondholders in New Work several weeks ago, in closed-door discussions. While the discussions were confidential, Business Day reported that the bondholders are apparently worried that Eskom may have breached some of its debt covenants.

Eskom cancelled the announcement of its results, scheduled to take place on Tuesday, on Monday night. Eskom said this was due to unforeseen circumstances, and the event was later postponed for another week.

Business Day reported that US lender, City Bank's local representatives and the Development Bank of Southern Africa (DBSA) were among the lenders who met with Eskom this week.

Eskom confirmed that it had met with "investors introduced by Citibank on Monday", while DBSA also confirmed the meeting.

DBSA spokesperson Sebolelo Matsoso told Business Day: "I can confirm that the DBSA did meet with Eskom this week, as in the normal course of business. We are bound by client confidentiality and, therefore, cannot disclose details of the meeting, nor can we disclose details of the loan conditions."

Eyewitness News (EWN) reported on Wednesday that Eskom wanted to meet with stakeholders, particularly unions, before it released its results. But energy expert Chris Yelland told EWN that this explanation did not appear to hold water.

"It really rings hollow that the real reason is that Eskom's own auditors have reported Eskom to an audit regulator in respect of serious irregularities," he reportedly said.