Commercial terrorism at Eskom

There are astounding levels of corruption at Eskom and there has to be civil and criminal consequences to the people who are found guilty.

This is the view of Bernard Hotz, director and head of business crimes and investigations practice at Werksmans Attorneys who was speaking to Bruce Whitfield.

News24 reported probes by law firm Bowmans and the Special Investigating Unit (SIU) found problems with Eskom contracts worth more than R178 billion.

“At the heart of the capture of Eskom is a slush fund set up by senior executives into which contractors paid millions of rand to bankroll their luxurious lifestyles,” News24 reported.

As part of these probes the power utility reported 110 criminal matters to the police over the last year. Eskom has also reported 60 cases to the NPA by the SIU.

News24 investigative journalist Kyle Cowan said there are thousands of pages of forensic reports with bank statements regarding corruption at Eskom.

He said they have already spent months sifting through the information, and will spend many more months to fully report on the matter.

Kyle Cowan
Kyle Cowan

Commenting on this investigation, Hotz said the investigation showed what happened at Eskom was nothing short of commercial terrorism.

He said there has to be consequences to the people who were involved in these criminal acts.

“It is good to write articles, but there have to be consequences. If people have done something wrong, there must be civil and criminal consequences,” he said.

To prosecute the criminals, however, is easier said than done.

South Africa’s law enforcement and prosecutorial authority are overwhelmed and under capacitated to deal with crimes of this magnitude.

“It is high time that public-private partnerships are put in place. You have to fight nuclear battles with nuclear weapons,” he said.

“You need to throw money and proper resources at investigating these matters to put the criminals behind bars.”

Hotz added that it is also important to take away the ill-gotten gains from the corrupt Eskom deals.

Ted Blom
Ted Blom

The flagged contracts and tenders totalling R178 billion shocked many people, but energy expert Ted Blom said this was not the full story.

Speaking to Michael Avery on Classic Business, Blom said there is another R800 billion of corrupt tenders and deals which should still be brought to light.

Blom pointed to the Medupi power station tender which was for R34 billion. “The current Medupi cost-to-completing is over R200 billion,” he said.

He added that Kusile was equally corrupt and that there was no tender which resulted in problems right from the start.

Blom said the initial Ingula tender was for R9 billion, but the project ballooned to R40 billion after “Zuma’s friends got their fingers into that pie”.

The nuclear debacle under the Zuma administration also resulted in large bribes, Blom said.

“Certain people, including members of the government, walked away with $2.5 billion,” he said.

He said to comprehensively address the corruption at Eskom, you need an experienced team which knows the company.

“Bowmans came in cold, and they uncovered R178 billion of corrupt deals. The SIU unit is also new, and they do not know what they are looking for,” he said.

Bernard Hotz interview

Ted Blom interview

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Commercial terrorism at Eskom