22/11/2017 11:33 SAST | Updated 22/11/2017 12:35 SAST

Eskom Shocker: 'Dudu Myeni Intervened With JZ's Blessing'

Zola Tsotsi, the former chair of the Eskom board, shocked MPs at Wednesday's hearings.

President Jacob Zuma.
President Jacob Zuma.

Former Eskom board chair Zola Tsotsi told MPs on Wednesday that he was called to a meeting with President Jacob Zuma in March 2015 by then-SAA chief Dudu Myeni to discuss the suspension of three executives at the power utility.

"I was called by Dudu Myeni. She said that I should avail myself for an audience with the president, and declined to discuss any details over the phone.

"On or about March 7, 2015, I arrived at the Durban presidential residence and was met by Dudu Myeni, her son Talent, and a certain Mr Nick Lennel, who was introduced to me as a lawyer."

Tsotsi said Myeni told him that financial stress and poor technical performance warranted an inquiry at Eskom.

Further, she said that three executives –– acting chief executive Tshediso Matona, group executive for group capital Dan Marokane, and group executive for commercial Matshela Koko –– had to be suspended.

Tsotsi said he had warned that this was a recipe for "inducing instability" at Eskom, but Myeni had retorted that the decline in the utility's performance had made such an inquiry essential, and the suspensions would not create difficulties.

Zuma then entered the room.

"He requested to know what was up for discussion, whereupon Ms Myeni repeated what she had previously stated. The president then enquired if I knew who the executives are who were to be suspended, to which I responded that I would prefer that I consult the HR rules of the company to check if there is provision for recusals, rather than suspensions, to achieve the same objective."

Myeni had then said Lennel had helped her with a similar situation at SAA.

"Mr Lennel then proposed that he draft a resolution for me to present to the board setting out the rationale for the inquiry. The meeting [then] ended."

Tsotsi said that two days later, he convened a board meeting at Eskom, at which he presented the resolution Lennel had drafted.The board was not happy with it, and proposed that Minister Lynne Brown speak to them. This happened on March 11.

"The minister gave her support for the inquiry, as well as for the suspension of the three executives."

The board then resolved to proceed, and mandated Eskom's audit and risk committee (ARC) and people and governance committee (P&G) to prepare for both the inquiry and the suspensions.

"At the inception of the P&G committee meeting following the board meeting, two astonishing events occurred. Firstly, Dr Ben Ngubane stated that the name of the financial director must be added to the list of executives to be suspended. I immediately furiously objected."

Tsotsi said he warned that such a move would generate shockwaves among Eskom's investors and lenders

"Dr Ngubane responded that the minister had instructed that the financial director's name be added. I immediately called the minister raising my concerns, but she rebuffed me."

The second astonishing event had to do with the appointment of those who were to act for the suspended executives.

Hardly an hour after the board meeting that decided on the suspensions, the names of those who were going to act were announced.

"I immediately protested... Once again, Dr Ngubane stated that these names came from the minister."

Tsotsi said that on March 12, he had called a press conference at which he announced the names of the four suspended executives. That afternoon, he had the "most humiliating experience" in his tenure as Eskom board chair.

"The head of Eskom Treasury informed me that our investors and lenders from across the world [would] be calling in to ask for an explanation... indeed, I was on [the] line with around 52 individuals, trying to defend what certainly was an indefensible position."

Tsotsi said that a week and a half later, on March 23, "I was given an ultimatum by the board to resign or be charged with lack of fitness as a director. I resigned under duress."

The termination of the services of the executives occurred after he had left Eskom.