21 reasons why Eskom suspended its procurement boss

Eskom CEO Andre de Ruyter recently submitted an affidavit to Parliament responding to allegations of racism against him by suspended chief procurement officer, Solly Tshitangano.

Tshitangano has claimed that De Ruyter abused his power and subverted protocols in critical developments on the Eskom board, including with employee appointments and the awarding of supplier contracts.

De Ruyter’s affidavit rejected the claims with fervour. He also expressed frustration at having to spend energy on dealing with frivolous allegations.

“This kind of spurious and defamatory accusation does not justify the enormous time and resources wasted in dealing with it.”

“In effect, a simple and straightforward operational issue dealing with underperformance has been elevated to Parliamentary level,” De Ruyter stated.

“Mr Tshitangano’s allegations are entirely without merit and appear to be an attempt to subvert Eskom’s internal disciplinary process.”

De Ruyter said if Tshitangano was of the view that his suspension, or the disciplinary proceedings against him, were improper or linked in any way to his allegations, he was entitled to raise such an argument in Eskom’s disciplinary proceedings, or before a court.

He claimed Tshitangano’s allegations seriously undermined morale in Eskom, while the company sought to establish a culture of high-performance.

Eskom has launched its own investigation into Tshitangano’s claims, the findings of which it will have to provide to Parliament’s Standing Committee on Public Accounts (SCOPA) by early July.

Solly Tshitangano, then deputy director general and acting chief procurement officer at National Treasury, testifies at the Nugent Commission of Inquiry.

21 charges listed

As part of his submission, De Ruyter listed 21 charges brought against Tshitangano as part of his disciplinary proceedings.

Many of these charges relate to Tshitangano’s apparent inability to stop dealings with Econ Oil, a former fuel supplier to Eskom.

A forensic investigation by law firm Bowmans has recommended that Eskom cease dealings with Econ.

According to a report from Bloomberg, citing a copy of Bowman’s report, Econ secured had secured deals worth R15-billion to provide Eskom with fuel at inflated prices by paying inducements, including donations to the ANC.

This was supposedly facilitated by Thandi Marah, then senior manager of business enablement at Eskom, who interfered in the utility’s tender processes.

Econ Oil’s sole director Nothemba Mlonzi allegedly made payments requested by Marah, including a R100,000 contribution to the ANC’s 2014 election campaign.

Despite these findings, Tshitangano had continued to approve and facilitate contracts with Econ to the combined value of R8 billion, De Ruyter has claimed.

According to De Ruyter, the suspended CPO stands accused of:

  1. Failing to take steps to investigate alleged overcharging and corrupt practices by Econ Oil and Energy (Pty) Ltd (“Econ”), a supplier of fuel oil to Eskom, despite being aware of substantial evidence indicating that Econ had engaged in such conduct.
  2. Failing to take steps to suspend Econ from acting as a supplier of Eskom and approving and facilitating the conclusion of further contracts with Econ worth a combined value of approximately R8 billion, despite being aware of this evidence, and despite receiving legal advice that such contracts should not be concluded, and a request from me to heed such legal advice.
  3. Inexplicably delaying an urgent meeting of Eskom’s Supplier Reconsideration Committee, which was to reconsider Econ’s position as supplier to Eskom.
  4. Inexplicably failing timeously to perform the Supplier Reconsideration Committee’s request that Econ be informed of the charges against them and asked to make representations.
  5. Granting Econ an unreasonably long period to respond to the various allegations against it, and granting extensions to Econ on at least three occasions, without consulting the Eskom Legal and Compliance Department and without considering Eskom’s best interests.
  6. On 4 January 2021, and on 22 January 2021, sending letters to Minister Gordhan, which were subsequently widely and publicly distributed, in which Mr Tshitangano falsely alleged, amongst other things, that Econ had not been afforded an opportunity to make representations about its proposed suspension as a supplier of Eskom.
  7. In these letters, disseminating confidential and highly sensitive communications between myself and the Executive: Legal and Compliance, and thereby causing these highly sensitive communications to be shared with Econ and reported on in the media.
  8. Refusing to follow Eskom’s internal Grievance Procedure in respect of his various complaints to De Ruyter.
  9. Through this conduct, exposing Eskom to significant financial and reputational risk.
  10. Failing to co-operate with Eskom’s auditors, which led to Eskom receiving a qualified sustainability audit for the 2019/2020 financial year.
  11. Causing Eskom’s expenditure to be incorrectly reported to its auditors.
  12. Failing to ensure proper records are maintained for auditing purposes.
  13. Misleading Eskom’s Executive Committee when questioned about the abovementioned transgressions.
  14. Delaying the submission of reports relating to irregular expenditure in terms of the Public Finance Management Act (PFMA).
  15. Delaying the submission of information required for audits relating to irregular expenditure in terms of the PFMA.
  16. Failing to timeously take steps to ensure emergency procurement of required services, after the Majuba Power Station takeout conveyor belt caught fire, and its rail coal offloading facility was rendered inoperative.
  17. Through this failure, exposing Eskom to losses of approximately R60 million, and potential losses of approximately R123 million per month.
  18. Failing in his responsibility to ensure that Eskom’s Procurement and Supply Chain Management Department contribute costs savings for the 2019/2020 financial year.
  19. Failing to attend meetings, prepare submissions or discharge his functions as Eskom’s Chief Procurement Officer, including failing to attend meetings of the Eskom Executive Committee, the Boards Social, Ethics and Sustainability Committee, as well as the Board’s Audit and Risk Committee.
  20. Failing to timeously make required submissions to Eskom’s Executive Committee.
  21. Providing Eskom’s Executive Committee with poorly drafted and ill-considered submissions, the contents of which Mr Tshitangano was unable to explain when questioned.

Now read: Pay up, Eskom

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21 reasons why Eskom suspended its procurement boss