Brown ignored warnings to clean up Eskom

Six international development finance institutions warned Public Enterprises Minister Lynne Brown to change Eskom’s board, according to a report in the Sunday Times.

The institutions reportedly delivered the warning in November 2017, and included the World Bank, African Development Bank, European Investment Bank, and German development bank KfW.

Brown was cautioned to not appoint any board members or management tainted by corruption, as Eskom was in danger of being downgraded by ratings agencies.

The institutions reportedly said the appointment of untainted board members was critical for the continued partnership between Eskom and international lenders.

The advice was not heeded by Brown, who re-appointed controversial Eskom executives Matshela Koko and Prish Govender.

Downgrade

News of the warnings follows global ratings agency Moody’s downgrading the long-term corporate family rating of Eskom to B1 from Ba3 this week.

The utility has seen a shake-up at an executive level in the past week, too, with Eskom CFO Anoj Singh resigning.

Telkom chairperson Jabu Mabuza was also recently appointed as chairman of Eskom’s board in an effort by the government to improve the company’s financial situation.

The board will appoint a permanent CEO within the next three months, and the government has recommended former Land Bank CEO Phakamani Hadebe for the position.

Now read: Eskom CFO Anoj Singh resigns

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Brown ignored warnings to clean up Eskom