Legal report defends Eskom’s R500-million Trillian deal

Legal opinion obtained by Eskom found that the power utility’s payment of over R500 million to Trillian Capital partners was justified, according to a report in the Sunday Times.

A report by McCaps Motimele found that despite the lack of a valid contract with the Gupta-linked company, Eskom’s tacit obligation towards Trillian justified the payment.

Motimele’s report raised concerns regarding poor governance and lack of adherence to internal processes at Eskom, but said that all payments to Trillian were justified except for an amount of R460 million.

These findings contradict the Public Finance Management Act, which states that no payment may be made without written agreement.

A source at Eskom told the Sunday Times that the legal opinion also contradicts the company’s internal policies and implies that it is acceptable to conduct business based on a tacit obligation.

“This senior counsel is willing to say – forgetting about the PFMA, PPPF, and the Companies Act – that it’s okay to do business on a tacit arrangement. It’s ridiculous,” said the source.

According to recent reports, Eskom is currently facing major financial challenges and has been wasting billions on power stations despite a shortage of demand.

Additionally, the Gupta-owned Optimum Coal Mine recently threatened Eskom’s coal supply in an effort to be paid a higher price for supplying coal to the power utility.

Now read: Eskom board pushed for appointment of Molefe as CEO

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Legal report defends Eskom’s R500-million Trillian deal