24/04/2017 05:56 SAST | Updated 24/04/2017 05:58 SAST

Brown's Decision Not To Pay Molefe R30m In A Pension Payout 'Is Precedent Setting'

"Everything stated by Ms Brown in her reasons to decline the exorbitant payout makes sense" -- Outa.

Waldo Swiegers/Bloomberg via Getty Images

The Organisation Undoing Tax Abuse (Outa) on Sunday applauded Public Enterprises Minister Lynne Brown's decision to turn down Eskom's proposal to give former Eskom CEO Brian Molefe a R30 million pension payout.

Outa said it started to set a precedent of halting the past trend of "incessant and unnecessary golden handshakes".

Brown said on Sunday that she had considered the Eskom board's reasoning in formulating the proposed pension payout, and could not support it.

"I found the argument presented by the board on why the pension arrangement was conceived lacking in legal rationale, and it cannot be substantiated as a performance reward, because Mr Molefe has already been granted a performance bonus for his contribution to the turnaround of Eskom," she said.

"Nor is the proposed pension payout justifiable in light of the current financial challenges faced, not only by state-owned companies (SOCs), but by the country as a whole."

Outa chair Wayne Duvenage welcomed her response.

"Everything stated by Ms Brown in her reasons to decline the exorbitant payout makes sense, in that the Eskom Board's motivation for this payout after Mr Molefe's short tenure, combined with Eskom's current dire financial situation, lacks rational thinking."

He said they would like to see Brown probe why the Eskom board decided to raise the request in the first place, and to hold them accountable.

The Democratic Alliance's public enterprises spokesperson, Natasha Mazzone, also welcomed Brown's decision.

"The DA calls upon the Eskom board to revert to Minister Brown with a new proposal for Brian Molefe's golden handshake to be R0,00," she said.

"Saving over R30m at Eskom would be a boost to the finances of the utility, at a much-needed time."

The DA believed she should now take action on other issues at Eskom.